The U.S. Supreme Court ruled Tuesday, May 26 that a good-faith belief that a patent is invalid is not a defense to a claim of inducing infringement. Commil USA, LLC v. Cisco Sys., Inc., No. 13-1986 (May 26, 2015). The Supreme Court’s ruling reversed the Federal Circuit’s 2013 decision that a good-faith belief that a patent is invalid is a defense to a claim of inducing infringement. Commil USA, LLC v. Cisco Sys., Inc., No. 2012-1042 (Fed. Cir. June 25, 2013).
The Federal Circuit’s Commil decision had been based on its prior ruling that a good-faith belief of non-infringement is a defense to a claim of inducing infringement. See DSU Med. Corp. v. JMS Co., Ltd., 471 F.3d 1293, 1307 (Fed. Cir. 2006) (en banc). The Federal Circuit’s Commil decision was also based on the Supreme Court’s recent Global-Tech decision, which held that “induced infringement . . . requires knowledge that the induced acts constitute patent infringement.” Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2068 (2011).
In reversing the Federal Circuit, the Supreme Court emphasized the principle that “infringement and validity are separate issues,” referencing “the long-accepted truth—perhaps the axiom—that infringement and invalidity are separate matters under patent law.” Commil, slip op. at 9-10. The Supreme Court de-emphasized the principle that “it is axiomatic that one cannot infringe an invalid patent” that had been emphasized by the Federal Circuit. Commil, Fed. Cir. slip op. at 10.
Justice Scalia’s dissent also rested on this principle: “It follows, as night the day, that only valid patents can be infringed. To talk of infringing an invalid patent is to talk nonsense.” But the Supreme Court reduced this principle to a “simple” truth or matter of “semantics”: “To say that an invalid patent cannot be infringed, or that someone cannot be induced to infringe an invalid patent, is in one sense a simple truth, both as a matter of logic and semantics.” Commil, slip op. at 11.
The immediate consequence of the Supreme Court’s decision is that companies accused of inducing patent infringement will have one less defense available to them. In particular, they will have one less defense that can be useful to defend against the type of software-related patent claims often asserted by non-practicing entities. The Supreme Court raised and addressed this issue in Part III of its opinion, emphasizing the “safeguards” of sanctions and attorney fees available to prevailing parties in frivolous cases. Justice Scalia’s dissent called it out directly: “the Court’s holding . . . increases the in terrorem power of patent trolls.”
The longer-term significance of the decision may be how other patent law doctrines relying on the principle that an invalid patent may not be infringed will be influenced given the Supreme Court’s emphasis on the principle that “infringement and validity are separate issues.”