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U.S. SC shoots down Federal Circuit's test in case over broad patent claims

By Jessica M. Karmasek | Jul 9, 2014

WASHINGTON (Legal Newsline) - The U.S. Supreme Court last month overruled the federal court in charge of handling all U.S. patent appeals, rejecting its test for determining whether a patent claim is sufficiently "definite."

In Nautilus Inc. v. Biosig Instruments Inc., the nation's high court said the U.S. Court of Appeals for the Federal Circuit's formulation, which tolerates some ambiguous claims but not others, does not satisfy the federal Patent Act's definiteness requirement.

The dispute between Nautilus and Biosig arose in the 1990s, when Biosig allegedly disclosed the patented technology -- a heart monitor used with exercise equipment -- to StairMaster Sports Medical Products Inc.

The patent in dispute, U.S. Patent No. 5,337,753, was issued to Dr. Gregory Lekhtman in 1994 and then assigned to Biosig.

Previous heart-rate monitors, the patent asserts, were often inaccu­rate in measuring the electrical signals accompanying each heartbeat, or electrocardiograph or ECG signals.

The inaccuracy was caused by electrical signals of a different sort, known as electromyogram or EMG signals, generated by an exerciser's skeletal muscles when, for example, he or she moves his or her arm or grips an exercise monitor with his or her hand.

These EMG signals can "mask" ECG signals and thereby impede their detection.

Lekhtman's invention claims to improve on prior art by eliminating that impediment.

Biosig, in its lawsuit originally filed in the U.S. District Court for the Southern District of New York in 2004, alleged that StairMaster, without ever obtaining a license, sold exercise machines that included the patented technol­ogy and Nautilus continued to do so after acquiring the StairMaster brand.

Nautilus argued that the claims were vague and ambiguous.

The Supreme Court, in its June 2 opinion, sided with Nautilus, saying patent claims must be clear.

In particular, the court said the Federal Circuit's standard was wrong, in that it would create "powerful incentives to inject ambiguity" into claims.

"In place of the 'insolubly ambiguous' standard, we hold 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," Justice Ruth Bader Ginsburg wrote in the unanimous 14-page ruling.

"Expressing no opinion on the validity of the patent-in-suit, we remand, instructing the Federal Circuit to decide the case employing the standard we have prescribed."

Wayne Bolio, SVP, Law and Human Resources, for Nautilus, said the company strongly believes that the patent system is best served when patent claims are "precise, definite and certain."

"Ambiguous and indefinite patents stifle competition and encourage unnecessary litigation," he said, following the ruling.

"We are gratified that the Supreme Court issued an opinion that addresses these concerns, which will benefit not only Nautilus Inc., but also numerous other companies facing similar circumstances."

Bolio continued, "We believe this will, in turn, encourage innovation, whereas vaguely written patents encourage patent trolls and unnecessary litigation."

Nautilus CEO Bruce Cazenave agreed.

"This ruling is long overdue and will foster innovation across all industries," he said. "It will help protect both Nautilus Inc. and all other companies from increasing, unnecessary and costly patent litigation that is taxing our already overburdened court system."

The Electronic Frontier Foundation, a San Francisco-based digital watchdog group that filed an amicus brief in the case, noted that the "reasonable certainty" test should invalidate many more patents -- in particular, many of the vague and overly broad patents asserted by so-called patent "trolls."

Generally speaking, a patent troll, or non-practicing entity or patent assertion entity, purchases groups of patents without an intent to market or develop a product.

In some cases, but not all, the entity then targets other businesses with lawsuits alleging infringement of the patents it bought.

EFF said it was happy to see the high court "corral" the Federal Circuit and "restore some sense" to patent law.

"But more work needs to be done, and we hope the Federal Circuit and district courts get the message: it is time for a more balanced system," the group said.

From Legal Newsline: Reach Jessica Karmasek by email at patents@legalnewsline.com.

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