Good Faith Belief Of Invalidity May Be Defense To Induced Infringement And Opinion Letters May Become Increasingly Important

The Federal Circuit recently denied a request for rehearing en banc in the matter of Commil USA, LLC v. Cisco Sys., Inc., in a 6-5 vote of the participating judges. 2013 U.S. App. LEXIS 21713 (Fed. Cir. Oct. 25, 2013) ("Commil II"). The result is that evidence of a good faith belief of invalidity of a patent is relevant to rebut an allegation of induced infringement, which was the holding of a three judge panel earlier in the year. See Commil USA, LLC v. Cisco Sys., Inc., 720 F.3d 1361, 1368 (Fed. Cir. 2013) ("Commil I"). Despite the protest of five of the Federal Circuit's judges, that decision will not be reheard and reconsidered by the entire Federal Circuit. Furthermore, because the Federal Circuit has previously held that a good faith belief of non-infringement of a patent is relevant to rebut induced infringement allegations, the combination of these holdings means that opinions of counsel may be more important than ever, at least in cases with induced infringement allegations.

To step back, the focus here is on certain types of patent claims that require more than one entity to perform different parts of a process. These are known as "joint" or "divided" infringement situations. They often occur in connection with computer-related patents. For example, the steps in a patent may include separate elements for transmitting, receiving and processing certain data, which often means that one entity performs the transmitting, and a separate entity performs the receiving and processing of the data that was transmitted. For such a method claims, neither of the entities can be liable for direct infringement because no entity performs all the steps. Instead, one of these entities can only be liable on a theory of "induced infringement."

Induced infringement is defined by 35 U.S.C. § 271(b), which provides that "[w]hoever actively induces infringement of a patent shall be liable as an infringer." Courts have determined that the statute has an intent element, and the Supreme Court has stated that inducement "requires knowledge that the induced acts constitute patent infringement." Global-Tech Appliances, Inc. v. SEB, 131 S. Ct. 2060, 2068 (2011). Consequently, as mentioned above, the Federal Circuit has previously held that an accused inducer's good-faith belief of non-infringement is relevant to prove that it lacked the intent required to be held liable for induced infringement. See, e.g., DSU Medical Corp. v. JMS Co., Ltd., 471 F.3d 1293, 1307...