Legitimate mental state attribution requires a fact of the matter about what states a system is in, independent of our predictive interests (Nagel's objective standpoint requirement).

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Fact of the matter(whether there is a definitive fact determining correct interpretation): An objective truth that exists independently—something that is actually the case, rather than a matter of opinion or interpretation.
Mental state attribution(as used in philosophy of mind): The act of assuming that another being has thoughts, beliefs, or desires going on in their mind.
Objective standpoint requirement(Nagel's specific philosophical requirement): Nagel's idea that in order to truly know something is real (like a mental state), there must be a perspective independent of our own personal wants or needs—a view from the outside rather than based on what helps us predict things.
Predictive interests(contrasted with objective facts in the statement): Our practical goals or desires to forecast what will happen next; what we want or need to predict based on our own purposes.

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