On May 26, 2015, in a six-to-two decision, the Supreme Court rejected the proposition that a good-faith belief that a patent is invalid could be used as a defense to a claim of inducing patent infringement. In Commil USA, LLC v. Cisco Systems, Inc., No. 13-896 (May 26, 2015), the Court re-affirmed the elements required to prove inducement, and rejected the notion that a good-faith belief of patent invalidity could be used as a defense. The Court was clear, “[t]he scienter element for induced infringement concerns infringement; that is a different issue than validity . . . And because infringement and validity are separate issues under the Act, belief regarding validity cannot negate the scienter required under §271(b).” Commil USA, LLC, No. 13-896, slip op. at 9.
Commil, the owner of a patent covering a method of implementing short-range wireless networks, accused Cisco of both direct and induced infringement for the manufacture and sale of wireless networks. Id. at 1-2. After two trials, Cisco was found liable of both; in the second trial, Cisco raised the defense to inducement of a good-faith belief of patent invalidity, and the District Court found evidence of such a good-faith belief inadmissible. Id. at 1-3.
After that second trial, but before judgment was entered, the Supreme Court issued its opinion in Global-Tech regarding inducement. Id. at 3. InGlobal-Tech, the Court held that induced infringement requires “the plaintiff to show that the alleged inducer knew of the patent in question and knew the induced acts were infringing.” Id. at 3, 6. Based upon that case, Cisco asked for reconsideration of the jury instruction concerning inducement and the District Court denied that request. On appeal the Federal Circuit held that “‘evidence of an accused inducer’s good-faith belief of invalidity may negate the requisite intent for induced infringement.’ The court saw ‘no principled distinction between a good-faith belief of invalidity and a good-faith belief of non-infringement for the purpose of whether a defendant possessed the specific intent to induce infringement of a patent.’” Id. at 4.
The Supreme Court disagreed rejecting the notion that a good-faith belief of invalidity is a defense to inducement. The Court noted that “Section 271(b) requires that the defendant ‘actively induce[d] infringement.’ That language requires intent to ‘bring about the desired result,’ which is infringement. And because infringement and validity are separate issues under the Act, belief regarding validity cannot negate the scienter required under §271(b). When infringement is the issue, the validity of the patent is not the question to be confronted.” Id. at 9-10. “[I]nvalidity is not a defense to infringement, it is a defense to liability. ” Id. at 11. “[I]f belief in invalidity were a defense to induced infringement, the force of [the presumption that a patent is valid under §282(a)] would be lessened to a drastic degree . . . That would circumvent the high bar Congress is presumed to have chosen: the clear and convincing standard.” Id. at 9-11.
Besides the dichotomy of infringement and invalidity, the Court also noted that there are “practical reasons not to create a defense based on a good-faith belief in invalidity” given that a defendant can file a declaratory judgment action, seek an inter partes review, seek ex parte reexamination, or assert an affirmative defense, which if successful on invalidity, will result in immunity from liability. Id. at 12. Plus, a court’s power to sanction attorneys for frivolous lawsuits or award attorney’s fees, “militate in favor of maintaining the separation expressed through the Patent Act between infringement and validity.” Id. at 14.