There is no doubt that the United States Supreme Court under Chief Justice Roberts has taken a much more active role than previous regimes in shaping our nation's patent laws. The Roberts Court has granted certiorari in a multitude of patent cases and has generally issued decisions that reign in the Court of Appeals for the Federal Circuit's perceived autonomy over intellectual property matters while, at the same time, restricting the rights of patentees.
How active has this Court been? The Federal Circuit formed in 1982 and the Supreme Court decided a total of eight patent cases from 1982 – 2005. Since Roberts joined the Court in 2005, and including cases to be decided this term, the Court will have heard twenty-one cases involving patent rights in less than ten years!
Here, we first look back at key patent cases decided by our nation's highest court since Chief Justice Roberts joined in 2006 (including the most recent decisions from April 2014) and then describe the issues set forth in the cases pending in 2014.
Supreme Court Patent Cases in the Roberts Era
No special treatment for the Federal Circuit despite its patent expertise?
The Federal Circuit is unique among the thirteen circuit courts of appeals in that it has nationwide jurisdiction in a variety of subject areas, including patents. Thus, the Supreme Court does not grant certiorari to resolve splits between the appellate courts. Instead, the Court has repeatedly issued decisions attempting to bring the Federal Circuit in line with the other appellate courts and reminding it that patent cases should not receive special treatment:
In eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), the Court vacated the Federal Circuit's decision and held that a patentee who demonstrates infringement at trial is not automatically entitled to injunctive relief. Rather, courts should grant injunctive relief in patent cases only if the traditional four-factor test for equitable relief is satisfied.
In MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), the Court reversed the Federal Circuit's decision and held that licensees should be permitted to get out of bad license deals by challenging the validity of the underlying patents.
In Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (2007), the Court again reversed the Federal Circuit, holding that Section 271(f) of the Patent Act, which imposes infringement liability for the unauthorized supply of "components" of a patented invention for "combination" abroad, does not cover foreign duplication of software.
In Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011), the Court affirmed the judgment of the Federal Circuit but articulated a stricter "willful blindness" standard for finding liability for induced patent infringement absent proof of actual knowledge of the patent.
In Medtronic, Inc. v. Mirowski Family Ventures, LLC, 134 S. Ct. 843 (2014), the Court reversed the Federal Circuit to hold that the patentee has the burden of proving infringement even in declaratory judgment actions by a licensee in good standing.
In Octane Fitness, LLC v. Icon Health & Fitness, Inc., 134 S. Ct. 1749 (2014), and Highmark Inc. v. Allcare Health Mgmt. Sys., 134 S. Ct. 1744 (2014), the Court took its attack to the Federal Circuit and so-called patent trolls, making it much easier to award sanctions against patent holders that bring meritless suits. In Octane Fitness, the Court rejected the Federal Circuit's rule that sanctions are appropriate only when a case is "objectively baseless" and "brought in subjective bad faith" and instead found that fees may be awarded in any case that "stands out from others." Likewise, in Highmark, the Court rejected the Federal Circuit's rule that fee awards are not entitled to deference and must be reviewed de novo.
In Limelight Networks v. Akamai Techs., -- S. Ct. --- (2014), the Court unanimously rejected the Federal Circuit's recent expansion of the inducement doctrine for method patents to address equitable concerns that a would-be infringer could evade liability by dividing performance of a method patent's steps with another whom the defendant neither directors nor controls. In doing so, the Court replaced the Federal Circuit's lenient standard for proof of induced infringement with a far more rigid one, blaming any inequitable result on the Federal Circuit's strict "single actor" rule 1 set and perhaps signaling the next Federal Circuit rule to fall.
What is patentable?
The Roberts Court has likewise taken a keen interest in patentability issues, and has generally restricted patent holder rights. For example:
In KSR International Co. v. Teleflex Inc., 550 U.S. 398 (2007), the Court held that "the results of ordinary innovation are not the subject of exclusive rights under the patent laws." The Court criticized the Federal Circuit's "teaching, suggestion and motivation" test for obviousness, instead directing courts to employ "common sense," and making it considerably easier for accused infringers to invalidate patent claims.
In Bilski v. Kappos, 130 S. Ct. 3218 (2010), the Court rejected the rule that the "machine or transformation" test was the sole test for determining whether business method claims were patentable subject matter, instead encouraging a less rigid approach focused on the idea that patents are "designed to encompass new and unforeseen inventions."
Recently, in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012), the Court held that the patent at issue was an unpatentable law of nature and that new patents involving correlations between natural phenomena must do more than simply recite the natural correlation and tell the user to apply it.
In Association for Molecular Pathology v. Myriad Genetics, 132 S. Ct. 1794 (2013), the Court found that merely isolating genes in naturally occurring sequences of DNA does not make them patentable; however artificially created cDNA is patent eligible.
In Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014), the Court unanimously struck down the Federal Circuit's long-standing rule that a claim passes the indefiniteness standard set forth in 35 U.S.C. § 112, ¶ 2 so long as it is "amenable to construction" and the claim, as construed, is not "insolubly ambiguous." The Supreme Court instead found that a claim is sufficiently definite where it "inform[s] those skilled in the art about the scope of the invention with reasonable certainty."
In Alice Corp. Pty. Ltd. v. CLS Bank Int'l., -- S. Ct. – (2014), the Court affirmed the Federal Circuit's holding, finding that patents at issue were invalid because the claims were drawn to an abstract idea, and that implementing those claims on a computer was not enough to transform that idea to a patentable invention under 35 U.S.C. § 101.
This is not to say that the Supreme Court never agrees with the Federal Circuit or never finds in favor of patent holder rights. The Roberts Court has issued two opinions that affirmed the Federal Circuit and were favorable to patentees. In Microsoft Corp. v. i4i Ltd. Partnership, 131 S. Ct. 2238 (2011), it upheld long-standing Federal Circuit precedent that patent invalidity defenses must be proven by clear and convincing evidence. Likewise, in Kappos v. Hyatt, 132 S. Ct. 1690 (2012), it held that rejected patent applicants may raise new evidence in district court proceedings, and the courts need not defer to the findings of the USPTO.
Patent Cases Pending Before the Supreme Court
To date, the Roberts Court has reversed the Federal Circuit ten times, vacated its decision four times, affirmed but changed the applicable standard twice, and affirmed four times. Its rulings have had a negative effect on patent rights fifteen times, and either kept the status quo or have had a positive effect on patent rights five times. For those keeping score, the Federal Circuit's winning percentage is only 20%, and patentees' winning percentage is a slightly better 25%.
Will that trend continue under the Roberts Court in future sessions? If the current pattern holds, patent holders are not likely to be happy with the outcome of appeals to the Supreme Court as long as Chief Justice Roberts serves as the nation's top arbiter of the law, and the Federal Circuit will continue to be reminded that despite its supposed expertise in patent law, it will not be given any special treatment.
1. The "single actor" rule was set forth by the Federal Circuit in Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2009.
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