Commil USA, LLC v. Cisco Systems, Inc., No. 13-896, (S. Ct. May 26, 2015) (Kennedy, J.) (Scalia, J., dissenting). Click Here for a copy of the opinion.
Commil sued Cisco for infringement of US Patent 6,430,395, for a method of implementing short-range wireless networks. After two trials, the jury found for Commil on both direct and induced infringement and awarded damages. The district court instructed the jury that Cisco could be liable for inducing infringement if it "knew or should have known" that its customers infringed. The district court also excluded Cisco's evidence of good-faith belief that the '395 patent was invalid.
Cisco appealed to the Federal Circuit, which held that "induced infringement requires knowledge that the induced acts constitute patent infringement." The Federal Circuit also reversed the district court's exclusion of Cisco's evidence, holding that "evidence of an accused inducer's good-faith belief of invalidity may negate the requisite intent for induced infringement."
The issue before the U.S. Supreme Court was "whether a defendant's belief regarding patent validity is a defense to a claim of induced infringement." The Court agreed with the Federal Circuit that "liability for inducing infringement attaches only if the defendant knew of the patent and that 'the induced acts constitute patent infringement.'" Nevertheless, the Court held that a defendant's good faith belief regarding patent validity is not a defense to a claim of induced infringement. According to the Court, infringement and validity are separate issues - they appear in separate parts of the Patent Act and are listed as separate defenses, i.e., they are "alternative grounds" for dismissing the suit. Therefore, a "belief regarding validity cannot negate the scienter required under §271(b)."
In addition, allowing a defense of good faith belief in invalidity would undermine the statutory presumption of patent validity and would "circumvent the high bar Congress is presumed to have chosen: the clear and convincing standard." The Court noted that "invalidity is not a defense to infringement, it is a defense to liability." The Court also raised practical reasons such as an increase in burden on litigation and the availability of alternative routes for the defendant to invalidate a patent. The Court vacated the Federal Circuit decision and remanded the case for further proceedings.
Justice Scalia dissented, with whom Chief Justice Roberts joined. Justice Scalia agreed with the majority that induced infringement requires "knowledge of the infringing nature of the induced acts." However, he argued that (1) "only valid patents can be infringed"; (2) "anyone with a good-faith belief in a patent's invalidity necessarily believes the patent cannot be infringed"; and (3) "it is impossible for anyone who believes that a patent cannot be infringed to induce actions that he knows will infringe it." Therefore, a good-faith belief of invalidity can be a defense to induced infringement of that patent.
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