Article by David A. Loewenstein and Clyde Shuman1
In 2001, in Exxon Research and Engineering v. United States, 265 F.3d 1371, 1375 (Fed. Cir. 2001), the Federal Circuit created the "insolubly ambiguous" standard to determine if patent claims complied with the definiteness standard of 35 U.S.C. § 112, ¶22:
"If a claim is insolubly ambiguous, and no narrowing construction can properly be adopted, we have held the claim indefinite."
Prior to that case, no patent case used the term "insolubly ambiguous": no regional circuit decision, no district court case, and no decision from the Court of Patent and Customs Appeals (the Federal Circuit's processor, whose precedent the Federal Circuit announced it would apply3) -- and certainly no Supreme Court decision.
Exactly where the Federal Circuit got that term is unclear.4 What is clear, however, is that test is not consistent with long-standing Supreme Court precedent, nor is it applied uniformly by the Federal Circuit.
A. The Supreme Court's Indefiniteness Test
In United Carbon Co. v. Binney & Smith Co., 317 U.S. 228, 236 (1942), the Supreme Court's most recent case on indefiniteness, the Court set forth the test to determine if patent claims complied with the predecessor of 35 U.S.C. § 112, ¶ 2, and highlighted the rationale for the definiteness requirement (emphasis added):
"[t]he statutory requirement of particularity and distinctness in claims is met only when the [claims] [1] clearly distinguish what is claimed from what went before in the art and [2] clearly circumscribe what is foreclosed from future enterprise."
Under this standard, determining whether a patent claim complied with the statutory requirement for definiteness was relatively straightforward. The claim, as a threshold matter, had to distinguish the prior art, and had to provide notice to the public about what was an infringement, and equally (and perhaps more) importantly, what was not an infringement. Non-infringing activities are significant because they provide an avenue to design around the patented invention and the critical ability to innovate, and also provide a clear path to persons who want to engage in an activity without fear they will be involved in costly litigation. Ambiguity was fatal, and "insoluble ambiguity" did not enter into the judicial lexicon.
In United Carbon, the Court held the terms: "substantially pure," "comparatively small," "approximately one sixteenth of an inch in diameter" were unclear and simply failed to provide notice to the public of what constituted an infringement. For that reason the claims were invalid.
The Supreme Court further held:
"To sustain claims so indefinite as not to give the notice required by statute would be a direct contravention of the public interest which Congress therein recognized and sought to protect." (At 233).
The Court therefore recognized the primacy of the notice function, and subordinated the patentee's right to limit competition to the public's right to be informed of what the patentee claimed to be his protected property.
The United Carbon formulation traces its origins back to the early 1800s, when the predecessor of § 112, ¶ 2 was first enacted. See Miller v. Brass Company, 104 U.S. 350, 354 (1882) (stating that the Act of 1836 included a requirement that patent claims "shall particularly specify and point out the part, improvement, or combination which he claims as his own invention or discovery." Before that, apparently, claims were customary, but were not required).
Following Miller, the Supreme Court repeatedly addressed the definiteness requirement, each time reinforcing the overriding policy considerations that claims must unambiguously define an invention over the prior art, and provide notice to the public.
In Brooks v. Fiske, 56 U.S. 212, 214 -15 (1853), the Court quoted the statutory definiteness language and emphasized the specificity requirement of claims (citations omitted):
"so that the public may know what they are prohibited from doing during the existence of the monopoly, and what they are to have at the end of the term, as consideration for the grant.
The patentee ought to state distinctly what it is for which he claims a patent and describe the limits of the monopoly[.] It is for the purpose of warning an innocent purchaser, or other person, using the machine, of his infringement ..."
Subsequently, in White v. Dunbar, 119 U.S. 47, 51-52 (1886), the Court made its famous "nose of wax" statement concerning patent claims, reiterating that an inventor's patent claims must "define precisely what his invention is," and that ambiguity was "unjust to the public, as well as an evasion of the law."
The following year, in Merrill v. Yeomans, 94 U.S. 568, 570-74 (1887), the Court held patents claims must clearly distinguish the invention from the prior art and must provide notice to the public (emphasis added):
"The act of Congress, therefore, very wisely requires of the applicant a distinct and specific statement of what he claims to be new, and to be his invention. ... This distinct and formal claim is, therefore, of primary importance, in the effort to ascertain precisely what it is that is patented to the appellant in this case. ... [O]ne who proposes to secure a monopoly at the expense of the public ought to describe the thing which no one but himself can use or enjoy, without paying him for the privilege of doing so.
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[The] exclusive rights conferred by it [the patent system], leave no excuse for ambiguous language or vague descriptions. The public should not be deprived of rights supposed to belong to it, without being clearly told what it is that limits these rights. The genius of the inventor, constantly making improvements in existing patents, -- a process which gives to the patent system its greatest value, -- should not be restrained by vague and indefinite descriptions of claims in existing patents from the salutary and necessary right of improving on that which has already been invented. It seems to us that nothing can be more just and fair, both to the patentee and to the public, than that the former should understand, and correctly describe, just what he has invented, and for what he claims a patent.
The Court made the additional point that, as the patent system matured, not only was notice of infringement an important requirement of the claims to avoid liability, but the so-called "negative incentive" of encouraging others to innovate and to design around patents was also implicated by the clarity of patent claims. Ambiguity, of any kind, therefore was not permitted.
Forty-four years later, the Court addressed the issue again, holding that the predecessor of § 112, ¶ 2 required patents:
"to inform the public of the limits of the monopoly asserted, so that it may be known which features may be safely used or manufactured without a license and which may not."
Permutit Co. v. Graver Corp., 284 U.S. 52, 60 (1931).
Seven years later, the Court revisited the question of claim indefiniteness in General Electric Co. v. Wabash Appliance Corp., 304 U.S. 364, 373 (1938) ("GE"). There, the Court had held that claims were indefinite because the specification failed to define the crystal grain size used in the claimed light filament. Again, the Court struck down the claims as a violation of the then-extant definiteness requirement. No person reading the claims could discern their scope with sufficient precision to avoid infringement. The Court held (at 369, footnotes omitted; emphasis added):
"Patents, whether basic or for improvements, must comply accurately and precisely with the statutory requirements as to claims of invention or discovery. The limits of a patent must be known for the protection of the patentee, the encouragement of the inventive genius of others and the assurance that the subject of the patent will be dedicated ultimately to the public. The statute seeks to guard against unreasonable advantages to the patentee and disadvantages to others arising from uncertainty as to their rights. The inventor must 'inform the public during the life of the patent of the limits of the monopoly asserted, so that it may be known which features may be safely used or manufactured without a license and which may not.'"
The twin purposes of the patent claims were explained to be: (1) notice to the public; and (2) differentiation from the existing bank of knowledge -- with the public as the ultimate beneficiary. The Court had no tolerance for claim ambiguity -- "insoluble" ambiguity certainly would not have passed muster. It was incumbent on patentees to state their inventions clearly.
Again, "insoluble ambiguity" did not enter the picture. Rather, the question was whether the claims provided sufficient notice to the public, including the ability to design around the patent, which is one of the principle rationales for the patent system. Merrill, supra.
Over and over again, the Supreme Court has emphasized the importance of patent claims' notice function. More recently, for example, in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. 535 U.S. 722 (2002), the Court held (at 730-32; emphasis added):
"The monopoly is a property right; and like any property right, its boundaries should be clear. This clarity is essential to promote progress, because it enables efficient investment in innovation. A patent holder should know what he owns, and the public should know what he does not. For this reason, the patent laws require inventors to describe their work in 'full, clear, concise, and exact terms,' 35 U.S.C. § 112, as part of the delicate balance the law attempts to maintain between inventors, who rely on the promise of the law to bring the invention forth, and the public, which should be encouraged to pursue innovations, creations, and new ideas beyond the inventor's exclusive rights. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 150, [] (1989).
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If competitors cannot be certain about a patent's extent, they may be deterred from engaging in legitimate manufactures outside its limits, or they may invest by mistake in competing products that the patent secures. In addition the uncertainty may lead to wasteful litigation between competitors, suits that a rule of literalism might avoid."
Festo, consistent with the long line of Supreme Court precedent, re-emphasizes that ambiguity cannot be tolerated, in any form. Further, Festo explains the public interest in the patent system is paramount. The "good" that comes from it is not solely the monetary compensation that flows to patentees. Rather, the public is given valuable information in the patent and is implicitly instructed what the next steps in the inventive process should be. And, when the patent expires, the inventive contribution is donated to the public (perhaps an antiquated notion considering the current speed of innovation; it is doubtful that an innovation retains any value 20 years after the filing of the application in today's internet-paced world).
The Federal Circuit's "insolubly ambiguous" standard minimizes these critical incentives by focusing instead on the presumption of clarity that is integrated in the presumption of validity of all issued patents, and all but eviscerates the statutory definiteness requirement. The "insolubly ambiguous" standard by definition permits some ambiguity (albeit not of the insoluble type); regardless of the verbal formulation, the Federal Circuit's test is not consistent with Supreme Court's insistence that "clarity is essential."
B. The Federal Circuit's Inconsistent Application Of The United Carbon Test
In the six years since the Federal Circuit announced its novel "insolubly ambiguous" test, approximately 70 District Court cases have applied the standard in patent cases, presumably with some difficultly, trying to determine where the line between soluble and insoluble ambiguity exists (to the extent it exists at all). To complicate matters, the Federal Circuit has inconsistently applied the preexisting Supreme Court standard and its own test.
In Datamize, LLC. v. Plumtree Software, Inc., 417 F.3rd 1342, 1347 (Fed. Cir. 2005), the Federal Circuit, struggled with the facially ambiguous term "aesthetically pleasing", quoted the United Carbon standard cited above, but also mentioned the Exxon "insolubly ambiguous" test. Ultimately, the Court held the claims indefinite, but under which standard is unclear. The term at issue was fatally ambiguous, regardless of which test was applied.
In Marley Moulding Ltd. v. Mikron Industries, Inc., 417 F.3d 1356, 1359 (Fed. Cir. 2005), three days after Datamize, the Federal Circuit held:
"The statute [35 U.S.C. § 112, ¶ 2] is satisfied if a person skilled in the field of the invention would reasonably understand the claim when read in the context of the specification."
That panel did not cite Exxon or United Carbon, but instead went back to a CCPA case, In re Moore, 439 F.2d 1232 (CCPA 1971), for the proposition that claims were definite when they: "' circumscribe a particular area with a reasonable degree of precision and particularity.'" In Moore, the CCPA had also emphasized that definiteness must "always" be determined "in light of the teaching s of the prior art ..."
In Amgen Inc. v. Hoechst Roussel, Inc., 314 F.3d 1313, 1342 (Fed. Cir. 2003), the Federal Circuit cited Exxon and the "insolubly ambiguous" standard, but also stated that claims must enable a person to "determine whether an accused product comes within the bounds of a claim..."
Later, in Honeywell International, Inc. v. ITC, 341 F.3d 1332, 1338-39 (Fed. Cir 2003), the Federal Circuit said the definiteness requirement focuses on whether the claims "adequately perform their function of notifying the public ..." That panel went on to cite Exxon and it "insolubly ambiguous" test. Ultimately, the Court held the claims invalid.
In an earlier Amgen case (Amgen, Inc. v. Chugia Pharm. Co., 927 F.2d 1200 (Fed. Cir. 1991), insoluble ambiguity was not mentioned (not surprising because the Federal Circuit had not yet invented the phrase). The Court held "at least about 160,000" was indefinite because they did not "'reasonably apprise those skilled in the art' as to their scope and [was not] 'as precise as the subject matter permits.'" Although the Federal Circuit did not cite any Supreme Court cases, it did recognize the importance of notice function.
In another pre-2001 decision, Morton International, Inc. v. Cardinal Chemical Co., 5 F.3d 1464, 1469-70 (Fed. Cir. 1993), the Federal Circuit held the claims invalid, citing Amgen (1991) and held claims must be "sufficiently precise to permit a potential competitor to determine whether or not he is infringing [,]" essentially the Supreme Court standard. Similarly, in The Standard Oil Co. v. American Cyanamid Co., 774 F.2d 448 (Fed. Cir. 1985), the Court held the term "partially soluble" invalid because it was "too vague" to satisfy the requirements of paragraph of 2, section 112. Whether "partially soluble" is "insolubly ambiguous" is doubtful. The claim term, however, failed to satisfy the notice requirement because different levels of solubility might have avoided infringement.Recently, in Young, the Federal Circuit held "near the ungual crest" (a feature on a cat's toe) was "not insolubly ambiguous" because it meant "at or close to" (another facially ambiguous term). That definition is not in the patent and was one that had been arbitrarily selected by the patentee's lawyer from a host of potential dictionary definitions. Aside from using the wrong test, the Federal Circuit also improperly relied on a dictionary definition, use of which it had condemned two years ago. See Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005)(en banc), discouraged using dictionaries to provide the meaning of disputed claim terms ("The main problem with elevating the dictionary to such prominence is that it focuses the inquiry on the abstract meaning of words rather than on the meaning of the claim terms within the context of the patent.").
Most recently, in her dissenting opinion in Pharmastem Therapeutics, Inc. v. Viacell, Inc., 2007 U.S. App. LEXIS 16245; 83 U.S.P.Q.2D (BNA) 1289 (Fed. Cir. July 9, 2007), Judge Newman reminded her Federal Circuit colleagues of the notice function required of the claims (at *83):
"Section 112 requires that ... 'one skilled in the art would understand the bounds of the claim when read in light of the specification.' Miles Laboratories, Inc. v. Shandon, Inc., 997 F.2d 870, 875 (Fed. Cir. 1993) ('If the claims read in light of the specification reasonably apprise those skilled in the art of the scope of the invention, § 112 demands no more.')."
Judge Newman also cited Marley and Exxon parenthetically for the insolubly ambiguous standard. The majority opinion did not reach indefiniteness.
What seems to have happened is that the Federal Circuit has moved away from the Supreme Court standard it routinely applied pre-2001, to the more difficult and internally ambiguous one used after that, and consequently has made it more difficult to invalidate patent claims -- which in the end overcompensates patent owners, and may help explain the popular perception that patent owners have received financial rewards that are disproportionate with any inventive contribution (a problem the Supreme Court, in a recent string of reversals, is remedying). See e.g., Ebay Inc. v. Mercexchange, L.L.C., __ U.S. __, 126 S. Ct. 1837, 1842 (2006) (Kennedy, J., concurring) ("An industry has developed in which firms use patents not as a basis for producing and selling goods but, instead, primarily for obtaining licensing fees.").
C. Pragmatic Concerns
The threshold requirement under § 112, ¶2 is an important check on trivial patents, which the Supreme Court's recent decision in KSR International v. Teleflex, Inc., __U.S. __,127 S. Ct. 1727 (April 30, 2007) highlighted. Indefiniteness, a question of law, is generally far easier to prove (perhaps at a Markman hearing stage) than more complex fact-intensive inquiries associated with anticipation and obviousness. As is all too well known, patent litigation is unusually expensive, a fact that non-manufacturing plaintiffs have skillfully exploited. Cutting litigation off at an early stage without searching for prior art, finding corroborating evidence to support prior uses, expert discovery and reports, etc. and evidence relating to what a hypothetical person of ordinary skill knew, or did not know, years earlier when a patent application was filed, can be avoided by a clear and predictable application of the law on indefiniteness. Resolving these fact-based or mixed fact and law issues is highly subjective and the costs of resolving them is great. It is uniformly agreed that clear demarcations of patent claims is the overriding goal of all infringement and invalidity inquires. Those objectives simply cannot be fulfilled with the "insolubly ambiguous" standard. That construct, itself ambiguous, effective writes the definiteness requirement out the statute. Ambiguity alone, which was sufficient grounds to strike patent claims for almost two centuries, is no longer sufficient -- now the disputed claim term must be insolubly ambiguous.
Unfortunately, this is another instance where the Federal Circuit has gone astray and has not followed clear Supreme Court precedent. Cf. Festo at 738 (see below). Moreover, the Federal Circuit has advanced no sound reason for departing from that simple and more easily understood precedent.
The Supreme Court's criticism of the Federal Circuit in Festo is apropos here (at 739):
"The Court of Appeals ignored the guidance of Warner-Jenkinson, which instructed that courts must be cautious before adopting changes that disrupt the settled expectations of the inventing community. ... Fundamental alterations in these rules risk destroying the legitimate expectations of inventors in their property."
Here, the Federal Circuit has plainly departed from long and consistent Supreme Court precedent. That precedent required patent claims to be sufficiently clear to establish boundaries that distinguished the prior art and provided notice to the public about the scope of the claims. Effectively the Federal Circuit has engaged in judicial legislation by erecting a barrier of "insoluble ambiguity" that makes it all but impossible to prove patent claims are invalid as matter of law. One of the many consequences of the Federal Circuit's activism, as the Supreme Court warned in Festo, will be "wasteful litigation" on unclear patent claims.
Footnotes
1. David Loewenstein is a Partner, and Clyde Shuman is a Senior Associate with the firm Pearl Cohen Zedek Latzer in New York and argued for the appellee in Young v. Lumenis Inc., ___ F.3d __, Slip-Op 06-1455 (Fed. Cir. June 27 2007), a case where the Federal Circuit applied the "insolubly ambiguous" standard.
2. Section 112 paragraph 2 of the Patent Act requires that a patent specification conclude with one or more claims "particularly pointing out and distinctly claiming subject matter which the applicant regards as his invention."
3. South Corp. v. United States, 690 F.2d 1368 (Fed. Cir. 1982) (en banc).
4. In Doyle v. Ohio, 426 U.S. 610, 617 (1976), The Supreme Court used the term "insolubly ambiguous" to describe a defendant's silence following his Miranda warning, holding that post-arrest silence did not demonstrate the defendant's exculpatory testimony at trial was necessarily inconsistent with that silence.
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