In August of this year, the Federal Circuit issued an opinion in Commil USA, LLC v. Cisco Systems, Inc. The Court’s decision dealt in relevant part with inducement of infringement under 35 U.S.C. § 271(b). According to the statute, “[w]hoever actively induces infringement of a patent shall be liable as an infringer.” The Supreme Court has interpreted the word “actively” as requiring that “the inducement must involve the taking of affirmative steps to bring about the desired result” and that the accused infringer must have “knowledge that the induced acts constitute patent infringement.” Global-Tech. Appliances, Inc. v. SEB S.A., 131 S.Ct. 2060, 2065-2068 (2011). Inducement of infringement can occur in various scenarios including supplier-purchaser relationships (e.g., a product produced and sold for a particular purpose), web-based platforms and commerce, and pharmaceutical sales (e.g.,, where the direct infringer is the consumer who purchases a product labeled for a specific use).
In the opinion, the majority of the panel (Judges Prost and O’Malley) held that “a good faith belief of invalidity may negate the requisite intent for induced infringement.” Commil, 720 F.3d at 1368. According to the Court, “[i]t is axiomatic that one cannot infringe an invalid patent.” Id. Thus, “one could be aware of a patent and induce another to perform the steps of the patent claim, but have a good faith belief that that patent is not valid” and “[u]nder those circumstances, it can hardly be said that the alleged infringer intended to induce infringement.” Id. Judge Newman, the third judge on the panel, dissented-in-part, stating that “[n]o rule eliminates infringement of a valid patent, whether the infringement is direct or indirect.” 720 F.3d at 1373.
The Commil decision is important because it provides another avenue for avoiding a finding of induced infringement. (A good faith belief in non-infringement is also relevant evidence tending to show that an accused infringer lacked the intent required for induced infringement. See DSU Med. Corp., 471 F.3d 1293, 1306 (Fed. Cir. 2006) (en banc).) Companies aware of a patent that might raise an issue of indirect infringement should now consider obtaining an opinion from counsel opining that the patent is invalid. Such an opinion, especially if formalized in writing, can be highly relevant to establishing in any subsequent litigation that the company had “a good faith belief that the patent is not valid.”
It is also noteworthy that at the end of October, the Federal Circuit denied a petition for rehearing en banc, refusing to rehear the case before all of the judges of Court. The order denying the petition was joined in by 6 of the 11 judges (the other 5 judges dissented and would have granted rehearing en banc). This close decision is an indication that the issue is likely to be taken up by the Court again.