Supreme Court Eliminates "Good Faith Belief" of Patent Invalidity as Defense to Induced Patent Infringement

May 26, 2015

By: Brian T. Moriarty

Hamilton Brook Smith Reynolds Alert

  • A defendant's belief that a patent is invalid is no longer a defense to a charge of active inducement of infringement
  • A defendant's belief that there is no infringement remains a valid defense to a claim of induced infringement

 

Today, in a 5-3 decision, the United States Supreme Court, Commil USA LLC v Cisco Systems, Inc., issued an important opinion that eliminates good faith belief of patent invalidity as a defense to a claim of active inducement of patent infringement.

Infringement of a patent can be direct or indirect.  Indirect patent infringement can also occur in two ways: (a) by "contributory infringement" under Section 271(c) of the Patent Act or (b) by "induced infringement" under Section 271(b).  The Supreme Court's ruling focused on a defense to induced infringement under Section 271(b). 
 
In its prior decision in Global-Tech Appliance's, Inc. v SEB S.A., the Court ruled that in an action for induced patent infringement, the plaintiff was required to show that the defendant knew of the existence of the patent in question and knew that "the induced acts constitute patent infringement."  Today, the Court reaffirmed that under Global-Tech a plaintiff must present proof that the "defendant knew the acts were infringing" - i.e., that it knew there was actual patent infringement.  In the Commil case, the Federal Circuit considered the Global-Tech holding and ruled that evidence, such as an opinion of counsel, of an "accused inducer's good-faith belief of  patent invalidity may negate the requisite intent for induced infringement."   The Supreme Court disagreed and vacated the Federal Circuit's ruling.

The Supreme Court reviewed various statutory provisions and noted that the standards for showing infringement were very different than the standards for proving patent invalidity and that "infringement and invalidity are separate matters under patent law."  The Court found that creating "a defense of belief of invalidity" would have "negative consequences," such as undermining the relative burdens of proof and making litigation too burdensome.  Accordingly, the Court held that the defendant's belief regarding patent invalidity is not a defense to an induced patent infringement claim.

In sum, under today's ruling a defendant's good faith belief, including any supporting opinion of counsel, that a patent is invalid is inadmissible as a defense to a charge of active inducement of patent infringement.  However, while unstated by the Supreme Court, a defendant's belief that there could be no actual infringement, including any supporting legal opinion, would presumably still remain a valid defense to a claim of induced infringement.

Overview

May 26, 2015

By: Brian T. Moriarty

Hamilton Brook Smith Reynolds Alert

  • A defendant's belief that a patent is invalid is no longer a defense to a charge of active inducement of infringement
  • A defendant's belief that there is no infringement remains a valid defense to a claim of induced infringement

 

Today, in a 5-3 decision, the United States Supreme Court, Commil USA LLC v Cisco Systems, Inc., issued an important opinion that eliminates good faith belief of patent invalidity as a defense to a claim of active inducement of patent infringement.

Infringement of a patent can be direct or indirect.  Indirect patent infringement can also occur in two ways: (a) by "contributory infringement" under Section 271(c) of the Patent Act or (b) by "induced infringement" under Section 271(b).  The Supreme Court's ruling focused on a defense to induced infringement under Section 271(b). 
 
In its prior decision in Global-Tech Appliance's, Inc. v SEB S.A., the Court ruled that in an action for induced patent infringement, the plaintiff was required to show that the defendant knew of the existence of the patent in question and knew that "the induced acts constitute patent infringement."  Today, the Court reaffirmed that under Global-Tech a plaintiff must present proof that the "defendant knew the acts were infringing" - i.e., that it knew there was actual patent infringement.  In the Commil case, the Federal Circuit considered the Global-Tech holding and ruled that evidence, such as an opinion of counsel, of an "accused inducer's good-faith belief of  patent invalidity may negate the requisite intent for induced infringement."   The Supreme Court disagreed and vacated the Federal Circuit's ruling.

The Supreme Court reviewed various statutory provisions and noted that the standards for showing infringement were very different than the standards for proving patent invalidity and that "infringement and invalidity are separate matters under patent law."  The Court found that creating "a defense of belief of invalidity" would have "negative consequences," such as undermining the relative burdens of proof and making litigation too burdensome.  Accordingly, the Court held that the defendant's belief regarding patent invalidity is not a defense to an induced patent infringement claim.

In sum, under today's ruling a defendant's good faith belief, including any supporting opinion of counsel, that a patent is invalid is inadmissible as a defense to a charge of active inducement of patent infringement.  However, while unstated by the Supreme Court, a defendant's belief that there could be no actual infringement, including any supporting legal opinion, would presumably still remain a valid defense to a claim of induced infringement.

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