“Supreme Court Holds that an Accused Infringer’s Belief Regarding Patent Validity is Not a Defense to Induced Infringement”May 27, 2015
On May 26, 2015, the Supreme Court issued a decision, 6-2, vacating the Court of Appeals for the Federal Circuit’s 2013 judgment in Commil USA, LLC v. Cisco Sys., Inc., 720 F.3d 1361 (Fed. Cir.), reh’g denied, 737 F.3d 699 (Fed. Cir. 2013) (order), and concluding that an accused infringer’s belief regarding a patent’s validity is not a defense to an induced infringement claim under 35 USC § 271(b), which states that “[w]hoever actively induces infringement of a patent shall be liable as an infringer.” The decision is important because it removes a defense to patent infringement liability that businesses often pleaded, and it further clarifies the Court’s 2011 decision in Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011).
In Global-Tech, the Court held “that induced infringement under §271(b) requires knowledge that the induced acts constitute patent infringement.” In Commil, the Court reiterated that the accused inducer must know of the patent and know that its induced acts infringe. The Court acknowledged the simple truths that an invalid patent cannot be infringed and that someone cannot be induced to infringe an invalid patent. However, the orderly administration of the patent system requires courts to address “‘[v]alidity and infringement [as] distinct issues, bearing different burdens, different presumptions, and different evidence.’” Conflating the two issues in permitting an accused inducer to plead its belief that the patent is invalid as a defense to an allegation of infringement would, according to the Court, undermine the patent’s presumption of validity and relieve the accused inducer from having to prove the patent is invalid by clear and convincing evidence. Accordingly, the Court refused to permit the defense.
The Court also explained three practical reasons why the defense is unsound. First, accused inducers who believe a patent is invalid may attempt to prove as much in federal court as well as through reexamination and inter partes review in the Patent Office. Second, the defense would unduly complicate patent litigation, offering accused inducers with incentives to craft invalidity theories that would not have to be proven correct in court, increase discovery costs, and multiply and complicate issues a jury may have to decide. Third, the Court stated that its decision mirrors uncontroversial laws regarding tortious interference with a contract, trespass, and criminal prosecution, where “I thought it was legal” is no defense.
Even though the dispute in Commil was not frivolous, the Court went out of its way to state that district courts have the “responsibility to ensure frivolous cases are dissuaded” by sanctioning attorneys for bringing such cases and awarding attorney’s fees to the prevailing party in exceptional cases, consistent with its decision last year in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014). Those safeguards against frivolity combined with the numerous ways in which an accused inducer may demonstrate the patent is invalid counsel the Court against permitting the accused inducer from defending an induced infringement claim on the basis of its belief the patent is invalid.
Those interested in the decision or its impact may contact an attorney at Marshall, Gerstein & Borun.
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