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Patent Alert - Good Faith Belief of Invalidity is Not a Defense to Induced Infringement

06.23.2015

By Brian R. Volk

The United States Supreme Court decided, as a question of first impression, that to be liable for induced patent infringement, a defendant must have knowledge of an infringed patent and that the induced acts constitute patent infringement.  A defendant's belief regarding the infringed patent's invalidity is not a defense. Commil USA, LLC v. Cisco Systems, Inc., No. 13-896 (May 26, 2015).

Commil owned a patent claiming a method of implementing short-range wireless networks. The patented invention provided improved communications between wireless network base stations and mobile devices moving around within a large geographic area covered by the base stations. Cisco manufactures and sells wireless networking equipment and Commil sued Cisco, alleging that Cisco induced third parties to infringe Commil’s patent by selling Cisco’s infringing network equipment. Cisco defended by arguing that it had a good faith belief that Commil’s patent was invalid, and that, therefore, the patent was not infringed.

Under 35 U.S.C. § 271(b), a party is liable if it "actively induces infringement of a patent" by another party. As opposed to direct patent infringement under § 271(a), which imposes strict liability for infringement, § 271(b) has been interpreted as including the additional requirements that the inducer must have knowledge of the infringed patent and that the induced acts constitute patent infringement.

The question presented in Commil required the Supreme Court to revisit its 2011 holding in Global-Tech Appliances v. SEB S.A. that induced infringement under § 271(b) requires knowledge that the induced acts constitute patent infringement.

In Commil, the Supreme Court found that the defendant's belief regarding the validity of a patent cannot negate the "knowledge" requirement for induced infringement under § 271(b). When patent infringement is at issue, the Court explained, the validity of the patent need not be considered, since "invalidity is not a defense to infringement, it is a defense to liability." By this logic, the Supreme Court swept aside a more difficult question – whether a party can have "knowledge" that it is infringing an invalid patent. This is a point seized on by the dissent written by Justice Scalia, which states pointedly: "It follows, as night does the day, that only valid patents can be infringed. To talk of infringing an invalid patent is nonsense."

The Court set forth several arguments supporting its conclusion. First, holding otherwise would undermine a patent's presumption of validity. Second, those aware of a patent that they believe is invalid have several ways to obtain a ruling of invalidity: a declaratory judgment in district court; inter partes review at the Patent Trial and Appeal Board; or ex parte reexamination before the U.S. Patent and Trademark Office. Third, allowing a belief of invalidity as a defense to induced infringement would increase the cost and complexity of litigation. The Court also cited, in further support of its conclusion, concepts common to contract, property and criminal law, such as ignorance of the law or mistake of law as not being a defense to breaking that law.
 
Thus, the Court's holding in Commil reaffirms its holding in Global-Tech, that a defendant is liable for induced infringement where the defendant knew of the patent and knew that the induced acts constituted infringement. The Court rejected the argument set forth by Commil (and supported by the Government) that the decision in Global-Tech, which included a dissent from Justice Kennedy, only required knowledge of the patent for induced infringement, and not also knowledge that the induced acts were infringing. Justice Kennedy explained in Commil that such an interpretation would “contravene Global-Tech’s explicit holding,” which required “proof that the defendant knew the acts were infringing.”  Accordingly, if a defendant has knowledge of a patent and that the induced acts would infringe that patent, the defendant is liable for induced infringement regardless of its belief that the patent is invalid.

For further information, contact Brian R. Volk of our Patent Practice Group at brv@cll.com; (212) 790-9282.

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