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Supreme Court Weighs in on Belief of Patent Invalidity and Induced Infringement

June 24, 2015
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Under 35 U.S.C. § 271, a party can be held liable for infringement of a patent under in a number of different ways. The most common liability is for direct, literal infringement of the patent, meaning that accused party actually practices every element of the asserted patent claim(s). The statute also includes provisions for liability based on importation products (§ 271(g)); contributory infringement (§ 271(c)); filing an Abbreviated New Drug Application (§ 271(e)); and induced infringement (§ 271(b)). Induced infringement under § 271(b) attaches to "[w]hoever actively induces infringement of a patent." The question of how a party actively induces infringement has been the subject of a significant amount of litigation, and has recently come back to the forefront with the Supreme Court's decision inCommil USA, LLC v. Cisco Systems, Inc.

In Commil, the Court confirmed that liability for induced infringement requires a showing that the accused inducer had (1) knowledge of the patent, and (2) knowledge that the induced acts constitute infringement. However, the Court further held that an accused infringer cannot use a good-faith but incorrect belief regarding invalidity of the patent to rebut that knowledge component of infringement.  

The patents at issue relate to Wi-Fi networks, and particularly to methods of providing faster and more reliable communications between devices and base stations on Wi-Fi networks. The patent owner, Commil, accuse the defendant, Cisco, of both direct infringement and of inducing infringement by selling network components that the customer could then use to infringe. During trial on the specific issue of induced infringement, Cisco attempted tointroduce evi­dence that it had a good-faith belief that Commil's patent was invalid, but was not permitted to do so by the court. Cisco was ultimately found liable for induced infringement, despite renewed objections over not being permitted to introduce the evidence of good-faith belief. However, before the district court issued its final judgment the Supreme Court handed down its decision inGlobal-Tech Appliances, Inc. v. SEB S. A., which held that a plaintiff attempting to prove induced infringement has to show that the alleged infringer had knowledge of the patent and that the induced acts were infringing. Cisco argued that the Global-Tech decision made it clear that the district court had erred, but the district court denied Cisco's motion and entered judgement for Commil. 

On appeal, a three-judge panel of the Federal Circuit reversed the district court, holding that there is "no principled distinction between a good-faith belief of invalidity and a good-faith belief of non-infringement for the purpose of whether a defendant possessed the specific intent to induce infringement of a patent." Judge Newman dissented from the decision, concluding that a good-faith belief in a pa­tent's invalidity is not a defense to induced infringement, and the Federal Circuit declined to rehear the case en banc, despite the fact that five of the judges would have granted rehearing to consider this specific question.

The Supreme Court granted took up the case on appeal to particularly address the issue of whether a defendant's good-faith belief in a pa­tent's invalidity can be a defense to induced infringement. The Court confirmed the holding of Global-Tech that liability for induced infringement requires a showing that the accused inducer had (1) knowledge of the patent, and (2) knowledge that the induced acts constitute infringement. However, the Court further held that an accused infringer cannot use a good-faith but incorrect belief regarding invalidity of the patent to rebut that knowledge component of infringement "becauseinfringement and validity are separate issues under the Act, [and therefore] belief regarding validity cannot negate the scienter required under §271(b)."


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