MVS Filewrapper® Blog: Likelihood of confusion at USPTO may be preclusive in litigation

Post by Dan Lorentzen

Although trademarks exist outside of the federal trademark system set out in title 15 of the U.S. Code (the Lanham Act), federal trademark law provides a number of benefits to mark owners who register their trademarks through the United Stated Patent and Trademark Office. In the context of federal trademark law, a trademark owner's rights in a mark, and the validity of that mark, can be tested in two separate types of proceedings: a lawsuit in federal court, or opposition at the USPTO.  The recent Supreme Court decision in B&B Hardware, Inc. v. Hargis Industries, Inc. provides important clarification on how determinations in the two types of proceedings interact.

B&B registered its mark SEALTIGHT in 1993 for "“threaded or unthreaded metal fasteners and other related hardwar[e];namely, self-sealing nuts, bolts, screws, rivets and washers, all having a captive o-ring, for use in the aerospace industry.”  Hargis began producing metal screws for use in building construction using the mark SEALTITE, and sought to register the mark in 1996.  B&B sued Hargis in federal court for trademark infringement and also filed a concurrent opposition to Hargis' registration at the USPTO.  A central question in both proceedings was whether there was a likelihood of confusion between Hargis' SEALTITE mark and B&B's already registered SEALTIGHT mark. 

Before the District Court had ruled on the likelihood of confusion, the Trademark Trial and Appeal Board (TTAB) of the USPTO ruled on the opposition proceeding, determining that Hargis' mark could not be registered because there was a likelihood of confusion with respect to B&B's mark.  Hargis did not appeal the TTAB decision to either a district court or the Federal Circuit.   B&B, in turn, argued to the District Court that as a result of the TTAB's decision, Hargis could not contest likelihood of confusion in the pending court proceeding.  Following Eighth Circuit precedent, the District Court disagreed, reasoning that the TTAB is not a judicial body created by Article III of the Constitution, and so the TTAB decision could not have preclusive effect on the District Court.  The jury ultimately found there to be no likelihood of confusion.  B&B appealed to the Eighth Circuit, which affirmed the District Court on the basis that the TTAB weighs different interests (e.g., the right to register versus the right to use) and applies different factors in determining likelihood of confusion than a district court would. 

On ultimate appeal, the Supreme Court resolved a Circuit-split on this issue and held that determinations of likelihood of confusion at the USPTO could be preclusive for subsequent determinations in litigation.  The Court concluded that an administrative determination, such as by the USPTO, can be preclusive for determinations of the same issue in federal court when the administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate.  The Court further determined that although the specific factors used by the district courts and the USPTO for determining likelihood of confusion may be different, the underlying legal standard is the same for both litigation and registration.  However, the holding is limited to situations where the application/registration at issue in the TTAB proceedings covers goods and services that are "materially the same" as those at issue in the federal court proceeding. 

It is worth noting that the Court's opinion relates to TTAB decisions regarding likelihood of confusion for trademark registration—that is, determinations proceedings such as oppositions where the parties have a chance to "litigate" the pertinent issues.  The same type of preclusion would not apply simply as a result of registration of a mark with the USPTO. 

As a result of this decision, parties considering taking action against a federal trademark applicant or registrant should carefully compare the goods/services shown in the trademark application/registration to the their own goods and services to determine whether they should proceed in the TTAB or a federal court.  Additionally parties trademark applicants/registrants who lose at the TTAB should strongly consider an appeal of that decision because that decision may now have preclusive effect in later federal court cases. 

The full decision is available here. 

MVS Filewrapper® Blog: U.S. Supreme Court Holds Trademark Tacking Is a Question for the Jury

By Jonathan Kennedy

 

The Supreme Court recently released its unanimous decision in Hana Financial, Inc. v. Hana Bank, holding that “when a jury trial has been requested and when the facts do not warrant entry of summary judgment or judgment as a matter of law, the question of whether tacking is warranted must be decided by a jury.”

 

The case involved use of the "Hana Bank" mark by a Korean financial service provider, which has been known as “Hana Bank” since 1991. However, in 1994 it established a service called “Hana Overseas Korean Club” which was advertised in the United States. In 2000, “Hana Overseas Korean Club” was renamed to “Hana World Center” and finally began operation in the United States as “Hana Bank” in 2002.  The petitioner, Hana Financial, is a California company established in 1994 and also in the field of providing financial services. In 1996, after a year of use in commerce, Hana Financial obtained a federal registration for its logo appearing with the name “Hana Financial.” Suit was brought in 2007 by Hana Financial, alleging trademark infringement on the basis that the use of "Hana Bank" infringed the rights in the "Hana Financial" trademark. In response, the respondent invoked the tacking doctrine to assert earlier rights.  The tacking issue was ultimately decided by a jury, with the district court denying motions for judgment as a matter of law.

 

The tacking doctrine recognizes that trademark owners and users should be allowed to make certain changes to their marks over time without losing their claim of priority. Lower courts have traditionally found that tacking is available when the original and revised marks are “legal equivalents” which have the same, continuing commercial impression when viewed through the eyes of the consumer.

 

Justice Sotomayor delivered the opinion of the Court and noted that it has long been recognized across doctrinal lines that when the viewpoint of an ordinary person is in question, the jury is generally the decision maker. However, the Court distinguished that holding when warranted by the facts, a judge may decide the question of tacking on a motion for summary judgment or for judgment as a matter of law. Furthermore, the Court noted that even if tacking was to be considered a mixed question of law and fact due to the “legal equivalence” requirement, typically these mixed questions are still left to the jury with carefully crafted jury instructions as to the legal standard.

MVS Filewrapper® Blog: Teva Decision Clarifies Standard of Review for Claim Construction

Post by Paul S. Mazzola

 

In Markman v. Westview Instruments, Inc., decided in 1996, the Supreme Court held that the construction of a patent should be decided by a judge and treated as a question of law.  Since Markman, the federal district courts have used pretrial hearings, commonly called "Markman hearings," to interpret appropriate meanings of key relevant words in patent claims.  Based on the language of the Markman opinion and perceived instruction contained therein, the United States Court of Appeals for the Federal Circuit has reviewed findings from Markman hearings, including the underlying factual findings, de novo.  The de novo review of all facets of claim construction is in tension with Federal Rule of Civil Procedure 52(a)(6), which states a court of appeals "must not . . . set aside" a district court's "[f]indings of fact" unless they are clearly erroneous."  To resolve the tension, the Supreme Court decided Teva Pharmaceuticals, Inc. v. Sandoz, Inc. on January 20, 2015.

 

In Teva, the factual dispute involved interpretation of the term "molecular weight," the calculation (and resulting value and meaning) of which can be achieved by multiple methods; three were considered by the Court.  Based on three possible meanings of "molecular weight," Sandoz argued the claim was indefinite under 35 U.S.C. §112, paragraph 2, as recently interpreted in Nautilus, Inc. v. Biosig Instruments, Inc.  The dispute required extrinsic evidence in the form of testimony and expert opinion.  With competing extrinsic evidence, the United States District Court for the Southern District of New York found that a skilled artisan at the time of the invention would interpret "molecular weight" as calculated by one of the three possible methods, and particularly the one method consistent with Teva's position.  Therefore, the district court held the claim was not indefinite.

 

The Federal Circuit held to the contrary and invalidated the patent.  Couched in a "de novo review of the district court's indefiniteness holding," the Federal Circuit "conclude[d] that (Teva's expert's) testimony does not save [] claims from indefiniteness."  The court did not provide further analysis regarding the same.  In essence, the Federal Circuit reviewed the underlying factual findings of the district court de novo.

 

The Supreme Court adjudged the Federal Circuit's analysis deficient.  The Court held that the ultimate question of proper construction of the patent remains a question of law subject to de novo review.  The underlying factual disputes, however, like all other factual determinations, remain under the province of FRCP 52(a)(6), subject to review for clear error.  In doing so, the Court analogized a patent to other written instruments, pointed to precedent, and cited practical considerations, most notably, the comparative advantage for the district court judge, who has presided over the entire proceeding, to render a proper finding.  The Court found unconvincing the argument that it would be unduly difficult for appeal courts to separate factual from legal matters.

 

To summarize, the ultimate claim construction is a question of law reviewed de novo; when the district court reviews only evidence intrinsic to the patent (i.e., patent documentation and any prosecution history of the patent), the district court's determination will amount solely to a determination of law reviewed de novo; and when a district court reviews extrinsic evidence, the subsidiary factfinding must be reviewed for clear error.

 

The practical effect of the decision remains to be seen.  Admittedly, in the Teva case, the specific finding of fact of the district court was essentially, if not completely, dispositive of the question of law (i.e., the finding that a skilled artisan would interpret "molecular weight" as calculated by one of the three possible methods rendered the claim definite).  One could envision, however, as contemplated by the Court, numerous examples where the district court's factual finding is much less central to the question of law, thereby permitting the Federal Circuit to adopt the factual finding but reach a different claim construction and/or conclusion of law. See Teva, supra ("In some instances, a factual finding will play only a small rule in a judge's ultimate legal conclusion about the meaning of the patent term.").

 

Therefore, even when the findings of fact are incorporated in toto, the Federal Circuit itself, in reviewing the claim construction de novo, is free to decide how much relative weight to give to the findings of fact versus its own, perhaps competing, analysis of the very same facts.  Thus, if the Federal Circuit disagrees with the district court's claim construction, even if the findings of fact support the same, the Federal Circuit could adopt said findings of fact while giving them little weight in its overall analysis.  Thus, in instances where the underlying factual dispute may be only mildly or moderately impactful of the ultimate question of law (e.g., indefiniteness, allowable subject matter, novelty, obviousness, etc.), the standard of review, for practical purposes, could arguably return to de novo review.

 

From a legal practice standpoint, the decision may prove valuable to filter out weaker appeals.  Prior to the Court's clarification in Teva, a losing litigant, who has already endured significant expense in district court, would be apt to appeal to the Federal Circuit to "relitigate" the claim construction and potentially receive a favorable result.  Now, a practitioner must analyze the likelihood of success at the Federal Circuit in light of the findings of fact of the district court; unless, of course, the litigant has a persuasive argument for clear error of the factual findings.  The net result may be a decrease in appeals based solely on an unfavorable claim construction.

MVS Filewrapper® Blog: New Supreme Court Decision Alters Review of Claim Construction Decisions

Post by Dan Lorentzen

 

The Supreme Court has issues a decision in Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., holding that appellate review of a district court’s decisions relating to subsidiary factual matters made in the course of its patent claim construction must be for  “clear error,” not a de novo standard of review.  Before this decision, all aspects of claim construction were reviewed by the Federal Circuit under the de novo standard, giving no deference to the determinations made by the trial court. 

 

The decision was authored by Justice Breyer, joined by Chief Justice Roberts and Justices Scalia, Kennedy, Ginsburg, Sotomayor and Kagan joined.  Justices Thomas and Alito dissented. 

 

A more detailed analysis of the decision will be forthcoming.  The full decision can be found here.

 

MVS Filewrapper® Blog: Shifting Pre-Trial Strategy in the Wake of Alice and Ultramercial

Post by Paul S. Mazzola

 

Four recent Supreme Court cases involving patentable subject matter under 35 U.S.C. § 101 (Bilski v. Kappos, Mayo Collaborative Services v. Prometheus Laboratories, Inc., Ass'n for Molecular Pathology v. Myriad Genetics, Inc., and Alice Corp. v. CLS Bank International ) have had the practical effect of heightening the standard for patentability.  However, these cases may also be altering the way patent cases are handled in their early stages.

 

The Federal Circuit recently decided the case of Ultramercial, Inc. v. Hulu, LLC for a third time.  The case was originally filed in the Central District of California in 2009. Initially, the district court granted the defendant's pre-answer motion to dismiss under Rule 12(b)(6), finding the patent at issue did not claim patent-eligible subject matter.  In the first appeal, the Federal Circuit reversed the district court, and the Supreme Court vacated the decision of the Federal Circuit for further consideration in light of Mayo. On remand, the Federal Circuit again reversed the district court, finding it was improper to dismiss the suit by granting a Rule 12(b)(6) motion.  To that end, the court made several compelling statements regarding the interplay between such motions and the § 101 analysis.  The court stated, "[I]t will be rare that a patent infringement suit can be dismissed at the pleading stage for lack of patentable subject matter."  The court reasoned that issued patents are presumed to be valid, and "the analysis under § 101, while ultimately a legal determination, is rife with underlying factual issues." Adding that claim construction should be required if there are factual disputes, the court succinctly stated, "Rule 12(b)(6) dismissal for lack of eligible subject matter will be the exception, not the rule."

 

After a second petition for certiorari was filed with the Supreme Court, the Court decided Alice.  The holding in Alice—that an abstract idea is not patent eligible subject matter if "merely requires generic computer implementation"—was squarely relevant to the patent at issue in Ultramericial, leading the Supreme Court to again vacate the decision of the Federal Circuit for further consideration in light of Alice.

 

In applying Alice to the patent at issue in Ultramericial, the Federal Circuit held that the claims do not recite patent-eligible subject matter under § 101, but affirmed the motion to dismiss under Rule 12(b)(6).  In doing so, the court deviated sharply from the decisive language from its previous decision, but dedicated no discussion to reconcile why a motion to dismiss is the appropriate mechanism to dispose of a suit involving an issued patent in an infringement suit presumably "rife with underlying factual issues."  However, the concurring opinion of Judge Mayer was almost entirely devoted to this issue.  "First, whether claims meet the demands of 35 U.S.C. § 101 is a threshold question, one that must be addressed at the outset of litigation.  Second, no presumption of eligibility attends to the section 101 inquiry."  Describing section 101 as a "gateway" and a "sentinel" akin to establishing jurisdiction, Judge Mayer forwarded three benefits of resolving any issue of patentable subject matter at the outset of litigation: conserving judicial resources, thwarting vexatious infringement suits, and protecting the public. In addressing the district court opinion, Judge Mayer stated, "No formal claim construction was required because . . . no 'reasonable construction would bring the claims within patentable subject matter.'"  Regarding the presumption of validity for issued patents requiring clear and convincing evidence to the contrary, Judge Mayer noted "the PTO has for many years applied an insufficiently rigorous subject matter eligibility standard." Thus, Judge Mayer found, "[T]he district court properly invoked section 101 to dismiss Ultramercial's infringement suit on the pleadings."

 

Given the apparent shift by the Federal Circuit toward resolving issues of patent-eligible subject matter at the pleadings stage, defendants of infringement suits involving uncertain subject matter eligibility are more likely to use a motion to dismiss to try to avoid costly discovery and claim construction.  The opportunity for an alleged infringer to undercut an infringement suit at the pleadings phase may also impact litigation strategy, including whether such a motion should be pursued in conjunction with other mechanisms such as post-grant proceedings before the Patent Trial and Appeal Board.

 

 

 

MVS Filewrapper® Blog: Is the Supreme Court Re-Aiming Markman?

Post by Alex Christian

The 1996 United States Supreme Court decision in Markman v. Westview Instruments established a landmark change for claim construction in patent infringement cases.  That case established that the meaning of the claim language of a patent is a matter of law for a judge to decide, and not a matter of fact that should be determined by the jury. Since the decision, what is now known as a "Claim Construction Hearing" or a "Markman hearing" is now common place in patent infringement cases.  Nearly two decades after the Markman decision, the Supreme Court has taken a case with the potential to dramatically alter this aspect of patent litigation.

The Markman hearing has become one of—if not the single—most important events in a patent infringement case.  In a Markman hearing, the Court is required to interpret any claims at issue in the case brought forth by the parties.  This usually includes extensive briefing, expert reports, expert testimony, and oral arguments before the Court. Markman hearings are so important and so influential that often the party who prevails in the Markman hearing will go to be the successful party—whether by trial or by settlement—in the case.

On October 15, 2014, the Supreme Court heard arguments on the case of Teva Pharmaceuticals v. Sandoz.  The case is centered on the question of what appellate rules should apply to claim construction decisions.  Currently, there is tension between the Federal Circuit case law and the Federal Rules of Civil Procedure regarding the way in which a district court's factual findings relating to claim construction are treated on appeal. The specific issue presented to the Supreme Court is:   

Whether a district court's factual finding in support of its construction of a patent claim term may be reviewed de novo, as the Federal Circuit requires (and as the panel explicitly did in this case) or only for clear error, as Federal Rule of Civil Procedure 52(a) requires.

Among the issues addressed during oral arguments, a significant amount of the debate dealt with the framework through which to view patent claims: similar to statues, which receive a de novo review; or like contracts, for which the district courts are given deference for underlying conclusions. You can find the transcript to the oral arguments here.

This particular case highlights the complexities Markman hearings have introduced into patent litigation, and the potentially tenuous ground upon which patent litigation has settled in the last several decades.  Perhaps the most complex issue that could be raised by the Supreme Court's eventual decision in this case, is that Markman hearings are considered by some as a violation of a plaintiff patent-owner's 7th Amendment right to a jury trial.

For additional background on the Markman decision, see Ed Sease's article, "Markman Misses the Mark, Miserably" available here.

MVS Filewrapper® Blog: Supreme Court Determines Internet Service Violates Copyrights

The Supreme Court has issued its much anticipated decision in American Broadcasting Co., Inc. v. Aereo, Inc.  The Court held that an internet service provided by Aereo—which allows subscribes to watch television programs over the internet contemporaneous with the programs as they are broadcasted over the air—violates of a copyright owner's exclusive right to perform a work publicly under the 1976 Copyright Act.  This decision represents an interesting historical development in copyright law. 

 

Amendment of the Copyright Act in 1976 was motivated, at least in part, in response to previous court decisions relating to systems very similar to the one at issue in Aereo. Specifically, in the 1968 case Fortnight Corp. v. United Artists Television and in the 1974 case Teleprompter Corp. v. Columbia Broadcasting System, Inc. the Supreme Court held operations such as reception and rechanneling of broadcast TV signals for simultaneous viewing to be "viewer functions," and not within the purview of the public performance right.  The 1976 Copyright Act subsequently clarified that to "'perform' an audiovisual work means 'to show its images in any sequence or to make the sounds accompanying it audible.'" Thus, under the 1976 Copyright Act, services that allow subscribers to view television shows contemporaneous or nearly contemporaneous with the broadcasting constitute a performance. 

 

Aereo argued that rather than performing the work in violation of the Copyright Act, it is merely an "equipment provider." The Supreme Court did acknowledge a technological difference between Aereo's services and the services at issue in Fortnight Corp. and Teleprompter—Aereo's service is "inert" until a subscriber chooses a program, whereas with the cable systems in Fortnight Corp. and Teleprompter transmitted constantly.  However, the Court was not persuaded that this difference mattered, and notably also found Aereo subscribers to constitute "the public" under the Act.

 

Also notable was the statement by the Court, in the body of the decision, that it does not believe this decision will discourage the emergence or use of different technologies. This seems to signal the Court's understanding that as technology continues to advance, while the Copyright Act remains the same, it will be increasingly important for courts to ensure that the Act does not tread on innovation and artistic creation, but rather to promote their progress as required by Article I, Section 8, Clause 8 of the United States Constitution. 

 

The full opinion is available here.

MVS Filewrapper® Blog: Generic Computer Implementation Cannot Save Patent-Ineligible Abstract Idea

On June 19, 2014, the Supreme Court issued its much-anticipated opinion in Alice Corp. v. CLS Bank Int'l.  The Petitioner, Alice Corporation ("Alice Corp.") is the assignee of the four patents at issue which disclose method, system, and media claims related to a computerized scheme for mitigating "settlement risk."  Respondents CLS Bank International and CLS Services Ltd. ("CLS") operate a network that facilitates currency transactions.  In 2007, CLS filed claims against Alice Corp. seeking a declaratory judgment that the claims at issue were invalid, unenforceable, and not infringed.  The parties filed cross-motions for summary judgment as to whether the asserted claims were patent-eligible subject matter under 35 U.S.C. § 101.  The District Court held that the claims were patent ineligible for failing to meet the requirements of section 101.  On appeal, a divided panel of the Court of Appeals for the Federal Circuit originally reversed the decision of the District Court however, after a rehearing en banc, the Federal Circuit affirmed the opinion of the District Court.

 

Alice Corp. appealed the decision of the en banc panel of the Federal Circuit to the Supreme Court.  The Supreme Court utilized the two-step framework set forth in Mayo Collaborative Servs. v. Prometheus Laboratories, Inc. in order to determine whether (1) the claims at issue are directed to a law of nature, natural phenomenon, abstract idea, or otherwise patent ineligible concept and (2) if so, the elements of the claim both individually and "as an ordered combination" add elements such that the patent ineligible concept was "transformed" into a patent-eligible application.

 

At the first step, the Supreme Court cited its precedent in Bilski v. Kappos in analyzing the claims at issue.  The Court wrote, "Petitioner's claims involve a method of exchanging financial obligations between two parties using a third-party intermediary to mitigate settlement risk. . . . On their face, the claims before us are drawn to the concept of intermediated settlement, i.e., the use of a third party to mitigate settlement risk."  The Court then compared these claims to the "risk hedging" in Bilski in determining that "intermediated settlement, like hedging, is an 'abstract idea' beyond the scope of § 101."   Citing Bilski, the Court rejected Alice Corp.'s argument that the abstract idea category is confined to "'preexisting, fundamental truth[s]' that '"exis[t] in principle apart from any human action.'"  As such, the Court held that the claims are "squarely within" the realm of abstract ideas and, thus, directed at patent-ineligible subject matter.

 

At the second step of the Mayo analysis, the Court reviewed its decisions in Gottschalk v. Benson, Diamond v. Diehr, Parker v. Flook, and Mayo in once again confirming that the "mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention."  The Court found the use of the computer in the claim elements was "purely conventional" and amounted to nothing more than "an instruction to apply the abstract idea of intermediated settlement using some unspecified, generic computer." The Court further found that neither the system nor the media claims were different in substance and simply "recite a handful of generic computer components configured to implement the same idea."

 

Accordingly, the Supreme Court affirmed the decision of the Federal Circuit, finding the method claims to be patent ineligible and "[b]ecause petitioner's system and media claims add nothing of substance to the underlying abstract idea, we hold they too are patent ineligible under § 101."

MVS Filewrapper® Blog: Supreme Court Holds Induced Infringement Requires Direct Infringement

This week the U.S. Supreme Court issued its decision in Limelight Networks, Inc. v. Akamai Technologies, concluding that an act of direct patent infringement must be present for a claim of inducement of infringement. The decision unanimously held that a defendant may not be liable for inducing infringement of a patent under 35 U.S.C. Section 27(b) when no one has directly infringed the patent under Section 271(a) or any other statutory provision. 

 

The dispute between the parties arose over a patent assigned to the Massachusetts Institute of Technology, claiming a method of using a "content delivery network" (CDN) for the delivery of electronic data, of which Akamai is the exclusive licensee. Akamai, using a CDN, allows its clients to store on its servers certain components of their website, which are designated through a "tagging" process. Limelight also operates a CDN and carries out several steps of the patent in question, but requires their users to do their own tagging process. Initially, Akamai won the suit in District Court, however after the jury returned its verdict, the Federal Circuit decided Muniauction, Inc. v. Thomson Corp. which held that "direct infringement requires a single party to perform every step of a claimed method" but is satisfied if a single defendant exercise control or direction over the entire process. In light of this decision, Limelight moved for reconsideration of its motion for judgment as a matter of law, which the District Court then granted. The Federal Circuit granted en banc review and reversed. The Federal Circuit held that steps taken by multiple parties can result in induced infringement, but expound on its decision stating, “To be clear, we hold that all the steps of a claimed method must be performed in order to find induced infringement, but that it is not necessary to prove that all the steps were committed by a single entity.”

 

The Supreme Court reversed the Federal Circuit, holding that a defendant may not be liable for inducing infringement unless there is at least one underlying instance of direct infringement. The Court concluded that all of the claimed steps would have to be attributed for a single actor for direct infringement to occur under the Muniauction decision, but because Limelight did not undertake all of the steps claimed in the patent and cannot be held responsible for all those steps, there was no infringement.

  

The complete opinion can be found here.

MVS Filewrapper® Blog: Supreme Court Defines Scope of Definiteness Required in Patent Claims

Today the U.S. Supreme Court issued its decision in Nautilus, Inc. v. Biosig Instruments, Inc. defining the standard for definiteness necessary to meet the requirements of 35 U.S.C. Section 112, second paragraph.  The decision unanimously rejected the "insolubly ambiguous" standard previously employed by the Federal Circuit to determine whether patent claims meet the statutory requirement to "particularly point out and distinctly claim the subject matter which the applicant regards as the invention."

The dispute between the two exercise equipment manufacturers Nautilus Inc. and Biosig Instruments Inc. related to heart rate monitors patented by Biosig in 1994. Biosig accused Nautilus of infringing its patented heart rate monitors in exercise equipment (such as treadmills). Nautilus alleged the Biosig patent was invalid due to "indefiniteness" of its claims. The U.S. Court of Appeals for the Federal Circuit ruled in favor of Biosig finding its patent to be valid, concluding the claimed term "spaced relationship" of electrodes measuring a user's heart rate was sufficiently described as to be understood by a person of ordinary skill in the art to which the invention pertains. The U.S. Supreme Court reversed this decision, finding the Federal Circuit's standard for permitting vaguely written claims—so long as they are not "insolubly ambiguous"to be insufficient for informing skilled artisans about the scope of an invention when reviewing claim language. The dispute between the companies has now been remanded back to the Federal Circuit for reconsideration; however, it is unclear whether the outcome of the infringement decision will ultimately change upon application of the definiteness standard set forth by the Court. 

The test set forth by the Court to determine whether a patent is invalid for indefiniteness is as follows: a claim is indefinite if, when read in light of the specification of the patent (and the prosecution history) "fails to inform, with reasonable certainty, those skilled in the art about the scope of the invention." (Emphasis added). Therefore, the standard for meeting the written description requirement mandates that claims provide "reasonable certainty" to skilled artisans. This overturns the standard previously employed by the Federal Circuit which only required that a claim is "amenable to construction" and is not "insolubly ambiguous."

The decision provides clear incentive for patent drafters to eliminate 'zones of uncertainty' or ambiguity from patent claims. Such incentive is provided in the form of the Court's criticism of drafting and patent examination that results in ambiguity relating to claim terms or scope.

A complete copy of the opinion can be found here.

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