The Supreme Court has ruled that an accused infringer’s good faith belief that a patent is invalid is not a defense to an induced infringement (and presumably contributory infringement) charge. See Commil USA, LLC v. Cisco Sys., Inc., No. 13—986. This ruling will have a significant impact on how accused infringers respond to an allegation that they have induced, or contributed to, the infringement of a patent, in litigation as well as in responding to cease-and-desist letters. While the burden to prove infringement is always on the patentee, now that an accused infringer’s good faith belief that a patent is invalid is insufficient to avoid induced infringement, accused infringers must focus on non-infringement arguments. A patentee must show that the accused infringer both knew of the patent and knew that the acts it had induced constituted patent infringement. Therefore, well-supported non-infringement arguments will give the accused infringer the best arguments for opposing a finding that it knew that the acts it induced infringed the patent.
After a trial in which the district court rejected Cisco’s evidence showing that it had a good faith belief that Commil’s patent was invalid, the jury returned a verdict against Cisco on induced infringement, awarding Commil $63.7 million in damages. The U.S. Court of Appeals for the Federal Circuit reversed, holding in relevant part that evidence of an accused infringer’s good faith belief that the patent-at-issue is invalid may negate the requisite intent element for induced infringement. The Supreme Court reversed.
The Court defined the issue as “whether knowledge of, or belief in, a patent’s validity is required for induced infringement under [35 U.S.C.] § 271(b).” It is well-established that patents enjoy a presumption of validity. Thus, the Court’s construction of the issue in this manner – as opposed to focusing on the accused infringer’s good faith belief of invalidity – leads almost inexorably to the Court’s holding.
The Court based its decision on several factors. First, the Court reasoned that “when infringement is the issue, the validity of the patent is not the question to be confronted,” and that if the Court were to interpret the inducement statute, 35 U.S.C. § 271(b), as permitting a reasonable belief that the patent-at-issue is invalid, such an interpretation would conflate the issues of infringement and validity. Second, the Court concluded that allowing a good faith belief in invalidity would undermine a patent’s presumptive validity, noting that “validity and infringement are distinct issues, bearing different burdens, different presumptions, and different evidence.” Third, the Court noted that accused infringers have other methods available for resolving invalidity issues (e.g., file a declaratory judgement action, seek inter partes review, seek ex parte reexamination, raise invalidity as an affirmative defense). The Court also concluded that creating a defense of belief in invalidity would cause litigation costs to rise, and would place more burden on the jury to separate the defendant’s belief regarding validity from the actual issue of validity. Finally, the Court added that the defense “I thought it was legal” is never a defense.