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Supreme Court Invokes Common Law Principles in Largely Pro-Patent Decision: Good-Faith Belief of Invalidity Is Not a Defense to Induced Patent Infringement

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The Supreme Court decided today in Commil USA, LLC v. Cisco Systems, Inc. that an accused infringer’s good-faith belief that a patent is invalid, standing alone, is not a defense to induced infringement.  As discussed in greater detail in our earlier post, the Federal Circuit reversed the district court’s ruling that prohibited Cisco from presenting evidence of its good-faith belief that Commil’s patent was invalid, as a defense to induced infringement.

Among other things, the Court reasoned that a different result would contravene the presumption that a patent is valid. To overcome that presumption, a defendant must provide clear and convincing evidence of invalidity.  But if a defendant need only show a good-faith belief that a patent is invalid to avoid inducement liability, “the force of that presumption would be lessened to a drastic degree, for a defendant could prevail if he proved he reasonably believed the patent was invalid.”  (Emphasis added.)

Invoking common law torts of tortious interference with contract and trespass, as well as criminal law concepts of ignorance or mistake of law, the Court also observed, “In the usual case, ‘I thought it was legal’ is no defense.”  In the same vein, held the Court, belief in the patent-in-suit’s invalidity should not bar liability for inducing infringement.

While it appears that the majority and the dissent agree on the pro-patent nature of this decision, the Court rejected the argument—advanced by Commil and the Solicitor General—that inducement liability requires only knowledge of the patent, and not knowledge as well that the induced acts constitute infringement.  In so holding, the Court reaffirmed its holding in Global-Tech Appliances, Inc v. SEB S.A.: in an action for induced infringement, the plaintiff must show that the alleged inducer “knew of the patent in question and knew the induced acts were infringing”; proving negligence or recklessness is not sufficient (see also our prior treatment here).

In dissent, Justice Scalia argued that the majority holding “increases the in terrorem power of patent trolls.”  He argued that the majority seemingly acknowledged this consequence, where the Court emphasized that “district courts have the authority and responsibility to ensure frivolous cases are dissuaded.”

Commil raises some interesting questions for treatment in future cases.  One is how “knowledge” under the reaffirmed Global-Tech standard will be determined after Commil, considering validity and infringement issues often are mixed—with one another, and with claim construction issues.  A related issue is what evidence of that “knowledge” will be admitted into evidence, and whether or not it should be accompanied by a limiting instruction.

Finally, nothing in Commil changed the reality that if the patent-in-suit is adjudged invalid, then there is no liability—for direct infringement or for induced infringement.