Published 12/10/2021 by CIONCA IP TEAM (SE)
Commil USA, LLC (“The Petitioner”) was a holder of patents on methods of implementation of short-range wireless networks. The Petitioner instituted an action against Cisco Systems, Inc (“The Respondent”), a maker and seller of wireless networking equipment.
The Petitioner claimed the Respondent infringed upon the patents on its networking equipment, and by so doing, the Respondent induced other companies to infringe upon the Petitioner’s patents. As a result, the Petitioner brought the suit before the Federal District Court.
At the trial, the Respondent argued that the Petitioner’s patent was invalid for indefiniteness, especially considering the patent’s non-enablement and lack of written description.
After two trials, the District Court held the Respondent liable for direct and induced infringement of the Petitioner’s patent. On the induced infringement, the Respondent raised the defence of good faith belief, stating that it believed in good faith that the Petitioner’s patent was invalid. However, the District Court found the Respondent’s evidence to support this argument inadmissible.
Thus, the District Court awarded $70,000,000 (seventy million dollars) in damages against the Respondent. Dissatisfied, the Respondent appealed to the United States Court of Appeal (the “Federal Circuit”).
Before the Federal Circuit, the Respondent argued that the District Court erroneously instructed the jury, which led to the preclusion of evidence on the belief of good faith regarding the Petitioner’s patent. The Respondent also argued that the District Court erred in holding that the standard for inducement was negligence. Accordingly, the Federal Circuit affirmed the District Court’s judgement in part and vacated it in part.
The Federal Circuit reversed the District Court’s decision and held that the standard for induced infringement was actual knowledge or willful blindness. Hence, the Respondent’s good faith belief was a plausible defence to the patent’s invalidity.
The Petitioner then appealed to the Supreme Court. At the Supreme Court, six out of nine Justices had the majority opinion, and two dissented while the last one failed to give his opinion. Justice Kennedy led the majority opinion. The Supreme Court held that even though precedent required knowledge for induced infringement, infringement and validity were separate matters. Hence, the knowledge requirement did not apply to the patent’s validity or otherwise.
Also, the Supreme Court stated that the defence of good faith belief would not apply because allowing the defence of good faith would burden the Supreme Court regarding the patent’s invalidity.
Justice Scalia led the dissenting opinion. He opined that good faith belief in a patent’s invalidity was a defence to induced infringement as that knowledge of infringement was a requirement for induced infringement liability. Therefore, there could not be an infringement of an invalid patent without knowledge.
From the nine Justices that sat on the case, only Justice Breyer failed to give his opinion on the issues for determination.
Flowing from above, the Supreme Court declared that belief in patent validity could not be a valid defence to an induced infringement claim. The Supreme Court expressly relied on 35 USA section 271 (b) in giving its decision.
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