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  • Posts by Heather B. Repicky
    Partner

    Heather B. Repicky is a partner in the Litigation Department and a member of the firm’s IP and Patent Litigation practice group. She focuses her practice on civil litigation, with an emphasis on IP and complex commercial ...

Before the Supreme Court’s 2006 decision in eBay Inc. v. MercExchange, L.L.C., it was axiomatic that, upon a showing of a likelihood of success on the merits, a trademark owner was entitled to a presumption of irreparable harm when moving for preliminary injunctive relief. But after eBay, there was no such presumption in patent cases, leaving the question open whether the presumption would apply in trademark cases. Just a few weeks ago, on October 6, 2014, the Supreme Court denied certiorari in Herb Reed Enters., LLC v. Florida Entm. Mgmt., Inc., in which the Ninth Circuit held that trademark owners are not entitled to a presumption of irreparable harm simply by making a preliminary showing of a good case on the merits. Accordingly, the Supreme Court has left it to the circuits to resolve the presumption question in trademark cases, at least for now, causing litigants to query what evidence will suffice to establish irreparable harm without the presumption and to consider the prevailing law in the various circuits when choosing a forum.

Today the United States Supreme Court issued two opinions addressing patent law issues—Limelight Networks, Inc. v. Akamai Technologies, Inc. and Nautilus, Inc. v. Biosig Instruments, Inc. In both cases, the nation’s highest court unanimously reversed the Federal Circuit. In doing so, the Court simultaneously raised the bar for patentees with respect to patent infringement and lowered the bar for alleged infringers with respect to invalidity.

Active Inducement of Infringement

The Patent Act provides that “[w]hoever actively induces infringement of a patent shall be liable as an infringer.” 35 U.S.C. § 271(b). In Limelight Networks Inc. v. Akamai Technologies, Inc., Limelight was alleged to have actively induced infringement of a method patent by carrying out some steps of the claimed method and encouraging its customers to carry out the remaining steps. For purposes of this case, the Supreme Court assumed that infringement of all the method steps could not be attributable to a single party, either because Limelight had not actually performed the steps or because it did not direct or control others who performed them. Accordingly, the Supreme Court reversed the Federal Circuit and found that Limelight could not be liable for active inducement of infringement. In doing so, it reinstated the principle that liability for induced infringement must be predicated on direct infringement. The Court, however, made specific note that the Federal Circuit on remand will have the opportunity to revisit the question of direct infringement by Limelight under 35 U.S.C. § 271(a). For today, however, Limelight has escaped a finding of liability by dividing the performance of method steps between more than one party.

Indefiniteness

In addition to reversing the Federal Circuit’s holding concerning active inducement of infringement, the Court in Nautilus, Inc. v. Biosig Instruments, Inc. set forth a new test for patent definiteness. Patent claims can be found invalid for indefiniteness under 35 U.S.C. § 112. In Nautilus, Inc., the Court held that “a patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.” This new standard replaces the Federal Circuit’s long-standing “insolubly ambiguous” test, which directed lower courts to invalidate claims only if they are not “amenable to construction,” meaning that claims should survive so long as a court could “ascribe some meaning” to them. In overturning that standard, the Supreme Court found that it “can leave courts and the patent bar at sea without a reliable compass.”

Because the Court remanded the case back to the Federal Circuit with the instruction to apply the new standard to the claims at issue, the application and breadth of the newly pronounced indefiniteness standard are uncertain. While the Court found that the old standard was too lenient toward ambiguous claims, it cautioned that “[s]ection 112 … entails a ‘delicate balance’” that “must take into account the inherent limitations of language,” and allow for “[s]ome modicum of uncertainty,” while also requiring claims to “be precise enough to afford clear notion of what is claimed.” The Court also pointed out the importance of viewing the claims from the point of view of a person skilled in the art, and that such an investigation “may turn on evaluations of expert testimony.” Thus, the new standard appeals to a rule of reason, and its application likely will involve an intense factual investigation. In addition, the Court restricted its holding to the 2006 version of the Patent Act, which was in effect prior to enactment of the America Invents Act in 2012. It will thus be left to future cases to determine whether the Supreme Court’s new standard will be applied to patents filed after September 16, 2012.

This advisory was prepared by James C. Hall and Heather B. Repicky, members of the IP Litigation practice group at Nutter McClennen & Fish LLP. For more information, please contact Jim, Heather, or your Nutter attorney at 617.439.2000.

This advisory is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.

Posted in Branding, Trademarks

After banging your head against the wall for weeks or even months, your team finally has come up with a name for your new product line. You can see it now—in big lights…on a billboard…in Times Square! Fire up the marketing team, call the printer, order t-shirts, fly banners.

This week the Federal Circuit again raised the bar for succeeding on claims of active inducement of infringement, holding that an alleged infringer’s “good-faith belief of invalidity may negate the requisite intent for induced infringement.” In doing so, it created an additional reason for companies to obtain opinions from counsel on the validity of competitors’ patents.

Posted in Litigation, Patents

August 11, 2009

After more than fifteen years of ad hoc formulations that differed more or less from the familiar four-part test for issuing preliminary injunctions, the Federal Circuit has brought some much-needed clarity to its confused standard for preliminary injunctions in patent cases with its decision in Titan Tire Corp. v. Case New Holland, Inc. Following Titan, it will be harder for alleged infringers to fend off meritorious preliminary injunction motions. A mere “whiff” of invalidity will no longer suffice.  Instead, the alleged infringer will be unable to escape an injunction without showing that it has a likelihood of success on the merits of its invalidity defense in light of the clear and convincing burden of proof it bears at trial.

Since the early 1990s, the Federal Circuit has used the unique phrase “substantial question” of invalidity to describe what an alleged infringer must show to overcome the patentee’s likelihood of success on the merits (the first prong of the traditional four-part test that also includes a showing of irreparable harm, balancing of the equities, and a look at the public interest). This seemingly innocuous “substantial question” standard has created confusion among district courts regarding the amount of evidence needed for an alleged infringer to defeat a preliminary injunction. The Federal Circuit has compounded that confusion by employing the phrases “vulnerability” and “casting of doubt” in its attempt to explain the meaning of its “substantial question” phrase.

Some district courts have interpreted the “substantial question” standard as allowing an alleged infringer to show something less than a fifty percent chance of success on the issue of invalidity. Such a result makes nonsense of the very concept of “likelihood of success” and disregards the Supreme Court’s 2006 decision in eBay, Inc. v. MercExchange, LLC, which held that the traditional four-part test for injunctive relief applies in patent cases as in all other cases.

In Titan, the Court finally made some headway in explaining that “substantial question” of invalidity is simply a re-articulation of the “likelihood of success on the merits” factor of the preliminary injunction test. The Court began by confirming that there is no special preliminary injunction standard for patent cases per eBay. The “substantial question” analysis simply acts as a tool for evaluating the primary issue at the preliminary injunction stage—has the patentee established a “likelihood of success” on the merits?:

Asking whether the challenger has raised a substantial question of invalidity in the manner we have described may be a useful way of initially evaluating the evidence, but the ultimate question regarding the first preliminary injunction factor remains that of the patentee’s likelihood of success on the merits.

When analyzing whether there is a “substantial question” of invalidity, a trial court is therefore making a substantive determination as to the likelihood of prevailing on the validity/invalidity issue. While the patentee bears the burden of showing it is likely to overcome any validity challenge, the alleged infringer bears the ultimate burden of showing it is likely to prove invalidity at trial. That is, the burden does not just rest with the patentee to overcome any possibility of invalidity conjured up by the alleged infringer. Instead, the trial court “must determine whether it is more likely than not that the challenger will be able to prove at trial, by clear and convincing evidence, that the patent is invalid.”

In short, the Court explained that “substantial question of invalidity” is simply another way of expressing the requirement that a patentee establish a likelihood of success on the merits with respect to validity in order to obtain an injunction. Such a demonstration, in turn, means that the alleged infringer has not established a likelihood of success on the merits with respect to invalidity. This follows because the issue of validity/invalidity sums to zero:  there can be only one likelihood of success on the merits of this issue and, thus, only one winner.

Titan’s holding that “substantial question” equals “likelihood of success” should eliminate any debate about the evidence of invalidity an alleged infringer needs to muster to defeat an otherwise meritorious preliminary injunction motion. This holding favors patentees because it should make it more difficult for alleged infringers to use flimsy invalidity challenges to avoid preliminary injunctive relief.

To read more about the history of “substantial question” and its interpretation by different courts, see the article calling for the Federal Circuit to abandon the standard published by Nutter attorneys in the Summer 2009 ABA Intellectual Property Newsletter.

This advisory was prepared by Heather Repicky of Nutter’s Intellectual Property Litigation Practice Group. For more information, please contact Heather or your Nutter attorney at 617.439-2000.

This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising. 

Maximizing the protection and value of intellectual property assets is often the cornerstone of a business's success and even survival. In this blog, Nutter's Intellectual Property attorneys provide news updates and practical tips in patent portfolio development, IP litigation, trademarks, copyrights, trade secrets and licensing.

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