Supreme Court Rejects Belief Of Invalidity Defense For Inducement In Commil v. Cisco

On May 26, 2015, the Supreme Court held in Commil USA, LLC v. Cisco Systems, Inc., No. 13-896 ("Commil"), that a good-faith belief that an asserted patent is invalid is not a defense to inducement of infringement of that patent. "[A] belief as to invalidity cannot negate the scienter required for induced infringement."1

INDUCED INFRINGEMENT

A party that induces infringement by another is liable for that infringement.2 Inducement occurs when the defendant "knowingly induce[s] infringement and possess[es] specific intent to encourage [another party's direct] infringement."3 Accordingly, to induce infringement, a defendant must both (i) know of the patent in question and (ii) know the induced acts infringe that patent.4

COMMIL IN THE LOWER COURTS

In Commil, Commil sued Cisco, alleging infringement of patents relating to wireless networks. At trial, Cisco argued it should not be liable for inducing its customers' infringement because it believed in good faith that Commil's patents were invalid. The Eastern District of Texas disagreed with Cisco, but the Federal Circuit reversed, ruling that "evidence of an accused inducer's good-faith belief of invalidity may negate the requisite intent for induced infringement."5

THE SUPREME COURT'S RULING

In an opinion by Justice Kennedy, the Supreme Court reversed the Federal Circuit. The Court held that a good-faith belief in patent invalidity is not a defense to induced infringement: "[B]elief regarding validity cannot negate the scienter required for [induced infringement]."6 The Court noted that in Global-Tech Appliances, Inc. v. SEB SA, 563 U.S. __ (2011), it had held that to induce infringement, a defendant must both know of the patent in question and know that "the induced acts constitute patent infringement."7 In Commil, the Court rejected the argument advanced by Commil and the solicitor general that Global-Tech "should be read as holding that only knowledge of the patent is required for induced infringrement." 8 The Court instead reaffirmed Global-Tech's "clear" rule that a defendant may not be liable for inducement absent "proof the defendant knew the acts were infringing."9

The Court, however, rejected Cisco's argument that, by analogy, there should be no inducement liability when the defendant believes in good faith that the patent was invalid. The Court's decision rested on the "axiom . . . that infringement and invalidity are separate matters under patent law."10 Noninfringement and invalidity...