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Jun 2014
09
June 09, 2014

Supreme Court Rulings Impact Patent Holders


The Supreme Court, in continuing its trend of hearing an increased number of patent cases, recently relaxed numerous standards for defendants in patent infringement litigation. These relaxed standards provide additional tools to accused infringers, particularly in relation to recovering attorney fees from unsuccessful plaintiffs and invalidating asserted claims.
 
Attorney Fees: The Supreme Court recently issued two opinions relative to the award of attorney fees to prevailing defendants: 
 
  • The Patent Act provides that courts may award reasonable attorney fees to the prevailing party in “exceptional” cases (35 U.S.C. § 285). The Federal Circuit traditionally employed a rigid test, typically requiring a case to be objectively baseless and brought with subjective bad faith, in determining the “exceptional” nature of the case.  The Supreme Court rejected this rigid test in Octane Fitness v. Icon Health, and held that “an ‘exceptional’ case is simply one that stands out from the others with respect to the substantive strength of a party’s litigating position . . . or the unreasonable manner in which the case was litigated.”  The Supreme Court also rejected the Federal Circuit’s rule requiring clear and convincing evidence before any award of attorney fees, which greatly increases the discretion of the courts.
  • In a companion case to Octane Fitness, the Supreme Court also rejected in Highmark Inc. v. Allcare the idea that determinations as to the “exceptional” nature of a case are to be reviewed de novo on appeal. Instead, the court held that the standard should be whether the district court abused its discretion. 
 
Together, these cases provide increased opportunities for prevailing defendants to be awarded attorney fees in patent infringement cases, and make such awards increasingly difficult to reverse on appeal. These new standards provide increased protections from “patent trolls,” or non-practicing entities, which have less leverage in threatening litigation.
 
Indefiniteness: The Patent Act requires claims to be definite so as to put others on notice as to the metes-and-bounds of the claimed invention. Failure to particularly point out and distinctly claim an invention renders a claim unpatentable and invalid for being indefinite. 
 
Defendants in patent litigation commonly contend that asserted claims are invalid for being indefinite. However, the Federal Circuit has held that a patent claim is definite so long as the claim is “amenable to construction” and not “insolubly ambiguous,” which makes establishing indefiniteness quite difficult. 
 
The Supreme Court found this threshold to be both amorphous and rigid and, in Nautilus v. BioSig, held that a claim is invalid if it fails to inform with reasonable certainly those skilled in the art about the scope of the invention in view of the specification and prosecution history.
 
This case lessens the burden on accused infringers in establishing invalidity for being indefinite of asserted claims, which provides an additional tool for accused infringers in litigation. Further, patent practitioners must be cognizant of this new standard in drafting claims to maintain validity.
 
Contact Randall J. Peck (248.784.5045 or rpeck@wnj.com) or any other intellectual property attorney at Warner Norcross & Judd for more information.

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