In win for tech industry, Supreme Court overturns two more patent rulings

The Supreme Court issued two 9-0 decisions on Monday that will make it harder for companies to assert vague patents and rejected a “divided infringement” theory that had alarmed potential defendants.

The unanimous rulings come as the latest black eye for the country’s beleaguered patent appeals court, and as good news for companies like Google(s goog) and Microsoft(s msft), which had filed briefs arguing for the rulings to be overturned.

The first case involved Akamai Technologies(s akam) accusing Limelight Networks, a rival in the business of internet content delivery, of violating its patent under an unusual legal theory. Justice Samuel Alito offered a harsh rebuke of the patent court for accepting that theory:

our case law leaves no doubt that inducement liability may arise “if, but only if, [there is] . . . direct infringement.” One might think that this simple truth is enough to dispose of this appeal […]

The Federal Circuit’s analysis fundamentally misunderstands what it means to infringe a method patent. A method patent claims a number of steps; under this  Court’s case law, the patent is not infringed unless all the steps are carried out.

For practical purposes, this means that companies no longer have to worry about patent owners assembling a group of defendants whose actions, taken together, amount to patent infringement — a prospect that would have been both unfair and extremely costly.

The other case involved a dispute over a circuit design for a heart rate monitor, in which the patent covered a “spaced relationship” between electrodes. Despite the defendant’s objections that such a description was hopelessly vague, the lower court said a patent owner could still assert the patent so long as a judge could make out some of the claim.

The Supreme Court swatted down that reasoning, with Justice Ruth Bader Ginsburg writing for the court that:

To tolerate imprecision just short of that render­ing a claim “insolubly ambiguous” would diminish the definiteness requirement’s public-notice function and foster the innovation-discouraging “zone of uncertainty,”

The language about “innovation-discouraging” patent interpretaions is likely to please Amazon(s amzn), Yahoo(s yhoo), and other tech companies as well as groups like the Electronic Frontier Foundation, all of whom filed briefs in the case to argue that the patent was too vague.

Monday’s decision marks the fourth time this term that the Supreme Court has overruled the patent court 9-0. The high court has still to rule in a fifth case, known as Alice, which concerns the patentability of software and is considered to be the most important of the five cases. Today’s rulings may also encourage supporters of patent reform who suffered a major defeat two weeks ago when Democrats spiked a key bill in the Senate.

For more on Monday’s ruling, see Professor Dennis Crouch’s comment on Akamai, and Ars Technica’s detailed background on both cases.