High court limits lawsuits over patents

  • Article by: GREG STOHR and SUSAN DECKER , Bloomberg News
  • Updated: June 2, 2014 - 8:31 PM

 

– The U.S. Supreme Court ruled against patent holders in two cases Monday, rejecting a legal theory used to sue technology companies and requiring patents to be written with more specific language.

The rulings come in a Supreme Court term heavy with patent cases as the justices look for ways to curb what companies such as Google and Cisco Systems say is rampant abuse by some patent owners.

Some technology companies and retailers say they are frequently the target of suits demanding payment by patent owners whose sole mission is to extract royalty revenue.

Though today’s cases don’t involve such companies, the rulings “can be used as tools” against them, said Brad Wright, a patent lawyer with Banner & Witcoff in Washington who wasn’t involved in the cases.

One decision, involving exercise equipment maker Nautilus, “could be used to strike down vaguely worded patents, a problem that many technology companies complain about,” Wright said. “It is this vagueness that sometimes gives rise to gray areas in the law, allowing questionable claims to go forward. This might allow courts to rein those in more.”

The stakes are high for the companies and the broader economy. Industries with revenue tied the most to patent protection — including drugmakers, technology companies and certain manufacturers — generated $763 billion, or 5.3 percent, of the 2010 U.S. gross domestic product, according to a Commerce Department report in 2012.

During the past eight years, the Supreme Court has limited patent owners’ ability to block non-competitors from using their inventions.

In the other case Monday, the justices said companies can’t be sued for inducing someone else to violate a patent unless there has been direct infringement.

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