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U.S. Supreme Court Rules Good-Faith Belief in Patent Invalidity is Not a Defense to Induced Infringement

Posted on May 27, 2015 in Blog

On May 26, 2015, the Supreme Court of the United States, in Commil USA, LLC v CISCO Systems, Inc. in a 6-2 split decision, held that an alleged infringer’s good-faith belief that the patent-in-suit is invalid is not a defense to a claim of induced patent infringement. Justice Kennedy wrote the majority opinion. Justice Scalia and Chief Justice Roberts dissented. Justice Breyer did not take part in the decision.

Commil owns a patent for a method of implementing short-range wireless networks. Cisco was alleged to have directly infringed Commil’s patent by making and using infringing network equipment, and in addition, Cisco was alleged to have indirectly induced others to infringe the Cisco patent by selling the infringing equipment for them to use. Cisco alleged that its good-faith belief that Commil’s patent was invalid precluded Commil’s claim of induced infringement.

The decision discusses the statutory provisions of the Patent Act as it relates to the three forms of patent infringement liability. (35 U.S.C. §271.)

Subsection (a) governs direct infringement and provides:

Except as otherwise provided in this title, whoever without authority makes, uses, offer to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.

For liability under direct infringement, the alleged infringer’s mental state is not relevant. Direct infringement is a strict-liability offense.

Subsection 271(b) governs induced infringement:

Whoever actively induces infringement of a patent shall be liable as an infringer.

As the Court explained, “[L]iability for inducing infringement attaches only if the defendant knew of the patent and that ‘the induced acts constitute patent infringement.’”

Subsection 271(c) deals with contributory infringement:

Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial non-infringing use, shall be liable as a contributory infringer.

The Court explained, “Like induced infringement, contributory infringement requires knowledge of the patent in suit and knowledge of patent infringement.” [Emphasis added.]

As to the specific induced infringement issue raised in Commil, the Court advised: “This case asks a question of first impression: whether knowledge of, or belief in, a patent’s validity is required for induced infringement under §271(b).” Or stated otherwise, is the alleged infringer’s belief that the patent is invalid a defense to a claim of induced infringement? The Court answered “No,” because §271(b) requires the accused to “actively induce infringement,” i.e., to bring about the desired result. Since the result is infringement, validity itself is not the issue. Because infringement and validity are separate issues under the Patent Act, a good-faith belief that the patent is invalid does not negate the scienter required under §271(b) induced infringement. Therefore, when the issue is infringement, validity is not an issue. It is possible for an alleged infringer to prevail by either attacking validity or infringement, but infringement and validity are separate matters under patent law. (35 U.S.C. 282 (b)(1),(2).) Recognizing this, the Court stated, “Were this Court to interpret §271(b) as permitting a defense of belief in invalidity, it would conflate the issue of infringement and validity.”

The Court concluded: “[I]nvalidity 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.” The Court, however, pointed out that if the accused infringer succeeds in proving the patent-in-suit is invalid, there is no liability for induced infringement.

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