Tuesday, May 26, 2015

Cisco loses at Supreme Court in case involving Commil USA LLC

The US Supreme Court vacated the CAFC decision in a case involving Cisco and Commil. This action makes life a bit tougher for accused infringers who believe the asserted patents are invalid.

For the question before the Supreme Court, note the text of a prior IPBiz post:

The question is whether an accused company [here Cisco, accused of inducing infringement] can defend itself by arguing it had a good-faith belief the disputed patent was invalid because the invention was obvious, vague or insufficiently novel.

The CAFC had stated as to inducement of infringement:

It is axiomatic that one cannot infringe an invalid patent. [] Accordingly, one could be aware of a patent and induce another to perform the steps of the patent claim, but have a good-faith belief that the patent is not valid. Under those circumstances, it can hardly be said that the alleged inducer intended to induce infringement. Thus, a good-faith belief of invalidity is evidence that may negate the specific intent to encourage another’s infringement, which is required for induced infringement. Several district courts have considered this question and come to the same conclusion.[]

We now hold that evidence of an accused inducer’s good-faith belief of invalidity may negate the requisite intent for induced infringement.

*** Reuters noted on 26 May 2015:

The high court ruled in an opinion by Justice Anthony Kennedy that Cisco's belief that the patent was valid [sic: invalid (?)] was not a legitimate defense.

Justice Antonin Scalia wrote a dissenting opinion in which he was joined by Chief Justice John Roberts.


In a brief filed at the invitation of the high court, the U.S. government had warned that companies accused of inducing patent infringement were likely to raise the "good faith" defense in most cases, if not all of them.

The case was closely watched by Silicon Valley and biotechnology firms alike to see whether such a defense would be endorsed by the high court.

The case is Commil v. Cisco, U.S. Supreme Court, No. 13-896.

link: http://www.cnbc.com/id/102695108

***The majority referenced Judge Newman of the CAFC:

Judge Newman dissented on that point. In Judge
Newman’s view a defendant’s good-faith belief in a patent’s invalidity
is not a defense to induced infringement.
She reasoned that “whether there is infringement in fact
does not depend on the belief of the accused infringer that
it might succeed in invalidating the patent.” Id.,
at 1374 (opinion concurring in part and dissenting in part).

***Within the dissent of the Supreme Court case, one has the text

The Court makes four arguments in support of the
contrary position. None seems to me persuasive. First, it
notes that the Patent Act treats infringement and validity
as distinct issues.
Ante, at 9–10. That is true. It is also
irrelevant. Saying that infringement cannot exist without
a valid patent does not “conflate the issues of infringement
and validity,”
at 10, any more than saying that water
cannot exist without oxygen “conflates” water and oxygen.
Recognizing that infringement requires validity is entirely
consistent with the “long-accepted truth . . . that infringe-
ment and invalidity are separate matters under patent
law.” Ibid.


Next, the Court says that “invalidity is not a defense to
infringement, it is a defense to liability.” Ante, at 11.
That is an assertion, not an argument. Again, to infringe
a patent is to invade the patentee’s right of exclusivity.
An invalid patent confers no such right. How is it possible
to interfere with rights that do not exist?


That brings me to the Court’s weakest argument: that
there are “practical reasons not to
create a defense based
on a good-faith belief in invalidity.”
Ante, at 12 (emphasis
added); see also ibid.
(“Creating a defense of belief in
invalidity, furthermore, would have negative consequences”
(emphasis added)). Ours is not a common-law court.
Erie R. Co. v. Tompkins, 304 U. S. 64, 78 (1938). We do not, or at least should not,
create defenses to statutory liability—and that is
not what this dissent purports to do.
Our task is to interpret the Patent Act, and to decide
whether it makes a good-faith belief in a patent’s invalid-
ity a defense to induced infringe
ment. Since, as we said in Global-Tech, supra,
the Act makes knowledge of infringe-
ment a requirement for induced-infringement liability;
and since there can be no infringement (and hence no
knowledge of infringement) of an invalid patent; good-
faith belief in invalidity is a defense. I may add, however,
that if the desirability of the rule we adopt were a proper
consideration, it is by no means clear that the Court’s
holding, which increases the in terrorem power of patent
trolls, is preferable.

***In terms of the conservatives of the court, Justice Alito aligned
with the majority; Justice Thomas joined only parts II-B and III, and Justice
Scalia dissented.

If hypothetically the conservatives Thomas and Alito had aligned with Scalia, the vote would have been 4 to 4, and the decision of the CAFC would have stood.

link to Supreme Court text: http://www.supremecourt.gov/opinions/14pdf/13-896_l53m.pdf


Of PatentlyO text:

This is a split decision for patentees. On the one hand, it pushes away an entire set of defenses to inducement. But, on the other hand, the court solidifies a high wall by requiring proof that an accused inducer have known that the induced acts would constitute infringement of the asserted patent claims

In the "patent troll" cases involving broad claims, there is usually little doubt that there is infringement, with the question being whether the broad claims are valid.


Post a Comment

<< Home