United States: The Presumption Of Validity Triumphs Over A Good-Faith Belief Of Invalidity

On May 26, 2015, the Supreme Court decided Commil USA, Inc. v. Cisco Systems, Inc., 575 U.S. ____, (2015), holding that a good-faith belief that a patent is invalid is not a defense to inducing infringement liability under 35 U.S.C. § 271(b) ("[w]hoever actively induces infringement of a patent shall be liable as an infringer."). The Supreme Court reversed the Federal Circuit’s decision holding that "evidence of an accused inducer’s good-faith belief of invalidity may negate the requisite intent for induced infringement." Commil USA, Inc. v. Cisco Systems, Inc., 720 F.3d 1361, 1368-69 (Fed. Cir. 2013).

To prove a claim of induced patent infringement, patent owners already must establish that there is: (1) a direct infringement of the patent; (2) the party accused of inducement knowingly engaged in acts that induced the infringement by the direct infringer; (3) the party accused of inducement knew of the patent at issue; and (4) the party accused of inducement acted with intent to cause a patent infringement. See In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1339 (Fed. Cir. 2012); see also Global-Tech Appliances, Inc. v. SEE S.A., 131 S. Ct. 2060, 2068 (2011); DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1306 (Fed. Cir. 2006).

As the Supreme Court held in Global-Tech, and reaffirmed in Commil, liability "for induced infringement can only attach if the defendant knew of the patent and knew as well that 'the induced acts constitute patent infringement.'" 575 U.S., slip opn. at 6. Knowledge and intention of the accused infringer are thus already built into the burden of a patent holder’s proof. The outcome of the Commil case was quite significant to patent owners, for the Federal Circuit’s rule would have allowed an accused infringer to defeat induced infringement claims based on the accused infringer’s good-faith-but-incorrect-belief of invalidity of the patent, even though the accused infringer knew of the patent and knew that the acts it was inducing constituted infringement. The Supreme Court, however, found that "[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)." 575 U.S., slip opn. at 9. The opinion can be found here.

In 2007, Commil USA, Inc. ("Commil") brought suit in the Eastern District of Texas against Cisco Systems, Inc. ("Cisco") regarding infringement of Commil’s patent relating to an improved way to implement a short-range wireless network such as a WiFi network. As a defense against induced infringement, Cisco argued that it had a good-faith belief that Commil’s patent was invalid. The District Court rejected this defense, ruling that evidence proferred in support of it was inadmissible. The jury ultimately found against Cisco for induced infringement with an award of over sixty million dollars in damages to Commil. Cisco appealed to the Federal Circuit, which found that the District Court erred in ruling that evidence proferred to show a defense of good-faith belief in invalidity was inadmissible. The Supreme Court granted certiorari to decide the question of whether knowledge of, or belief in, a patent’s validity is required for induced infringement under §271(b). 

In the past, the Federal Circuit recognized "that patent infringement and invalidity are separate and distinct issues. Though an invalid claim cannot give rise to liability for infringement, whether it is infringed is an entirely separate question capable of determination without regard to its validity." Pandrol USA, LP v. Airboss Railway Prods., Inc., 320 F.3d 1354, 1365 (Fed. Cir. 2003) (internal citation omitted). The Supreme Court confirmed that "[w]hen infringement is the issue, the validity of the patent is not the question to be confronted." 575 U.S., slip opn. at 9. This is reflected in the structure of U.S. patent law itself in which "the issues of infringement and validity appear in separate parts of the Patent Act . . . [and] noninfringement and invalidity are listed as two separate defenses." Id. at 10. Therefore, interpreting "§271(b) as permitting a defense of belief in invalidity… conflate[s] the issues of infringement and validity." Id.

As the Supreme Court also observed, a defense of belief in invalidity "would also undermine a presumption that is a 'common core of thought and truth' [of U.S. patent law] . . . [that] a patent is 'presumed valid.'" Id.; see, e.g., 35 U.S.C. § 282(a) ("A patent shall be presumed valid. . . . The burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity."). The Supreme Court commented that "if belief in invalidity were a defense to induced infringement, the force of that presumption [of validity] would be lessened to a drastic degree, for a defendant could prevail if he proved he reasonably believed that patent was invalid." Id. Though the patent is presumed valid, accused infringers can challenge that presumption by raising and proving invalidity as an affirmative defense, which, if successful, removes liability for infringement of the patent claims at issue. However, as the Supreme Court clarified, "invalidity is not a defense to infringement, it is a defense to liability. And because of that fact, a belief as to invalidity cannot negate the scienter required for induced infringement." Id. at 11.

The dissent and others advocated creating a defense to inducing infringement liability as a method for combatting frivolous patent litigation. But the supposed cure would have done violence to the traditional distinction between infringement and validity in U.S. patent law and the presumption of validity for all U.S. patents. As the Supreme Court pointed out, accused infringers who believe a patent is invalid have a number of ways to obtain a judgment of invalidity, such as filing a declaratory judgment action, or seeking inter partes review or ex parte re-examination of the patent in suit at the U.S.P.T.O. Id. at 12. On the other hand, enabling a defense of belief in invalidity would create an incentive for any accused infringer to assert such a defense on the basis of any remotely plausible theory of invalidity. This would inevitably increase discovery costs and multiply the issues that a jury must resolve in a patent litigation. Id. The Supreme Court also stressed that district courts retain the authority to ensure frivolous cases are dissuaded by awarding attorney’s fees to prevailing parties in exceptional cases. Id. at 14; see Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. ___, (2014).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Morrison & Foerster LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Morrison & Foerster LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions