High-Tech Companies Want Justices' Heads in the Cloud Before Aereo

Whether it's the future of cloud computing or patent trolls lurking behind the scenes, there is more than meets the eye to the IP cases the U.S. Supreme Court will consider this April.

The justices will hear arguments in the highly anticipated copyright case, ABC v. Aereo, Inc., and also Nautilus, Inc. v. Biosig Instruments, Inc., which asks the justices to take a closer look at the problem of vague and ambiguous patents.

Two amicus briefs filed in these cases effectively illustrate the types of collateral issues the court must be mindful of when deciding highly technical cases.

First, in Aereo, a March 3 brief filed by SCOTUS veteran Andrew J. Pincus of Mayer Brown LLP, Washington, on behalf of BSA | The Software Alliance, describes perceived threats to the ever-expanding cloud computing industry. BSA "is an association of the world's leading software and hardware technology companies," including Adobe, Apple, Dell, IBM, Intel, McAfee, Microsoft, Oracle, Rosetta Stone and Symantec.

Cloud computing "is the future of information technology," the brief's argument begins. In 2013, spending on public cloud computing services reached $47.4 billion, and that number is expected to reach $107 billion by 2017, it says.

However, the court's treatment of two issues in Aereo could derail the growth of the cloud computing industry, the brief argues. First-counter to the petitioners' argument-"transmissions between a computer network and an individual user," even when aggregated with other transmissions of the same content, should not be enough to trigger copyright liability, BSA says.

Second, whether a cloud computing service stores multiple, user-specific copies of the same content, or whether it decides to store a single, master copy of a file uploaded by more than one user, should have no effect on copyright liability, BSA argues.

In Nautilus, an amicus brief also filed on March 3 by a group of well-known technology companies warns the court of the price to be paid in growth and innovation should the court make the wrong decision.

The brief, filed by John Thorne of Kellogg, Huber, Hansen, Todd, Evans & Figel, Washington, on behalf of Amazon, Cisco, Dell, Garmin, Google, Netflix, Verizon and other companies, implores the court to crack down on vague and ambiguous patents by reversing the "insolubly ambiguous" standard employed by the Federal Circuit, and adopting a regime where patents are enforced only if "an ordinarily skilled artisan, reading the patent," can discern exactly what it covers.

Among other things, the brief points to a woefully undermanned Patent and Trademark Office-where, the brief says, an average of only 18 hours is spent examining each patent-as a reason for a dramatic increase in patents issued (see the chart below, taken from the brief), many of which are painfully ambiguous when it comes to the claimed invention.

Number of Live Patents by Year - Nautilus v. Biosig

This explosion of less-than-clear patents, the brief says:

  • Deters new innovation in adjacent areas; and
  • Increases litigation by patent-assertion entities, commonly known as "patent trolls."

"The increase of PAE litigation goes hand-in-hand" with the Federal Circuit's "insolubly ambiguous" standard of review, the brief says. An uncertain claim allowed under that standard "allows for more brazen litigation positions and creates greater threats of uncertainty while the courts struggle to discern some meaning in an ambiguous claim," the brief argues.

In other words, every vague patent that makes it out of the PTO and gets blessed by the Federal Circuit adds another lane to the bridge over patent trolls' heads, the amici argue.