Commil USA, LLC v. Cisco Systems, Inc.

Docket No. 2012-1042

October 22, 2013

Brief summary: Petition for rehearing en banc was denied but the two dissents argued that this denial “expressly [held] that evidence of an accused inducer’s good-faith belief of invalidity may negate the requisite intent for induced infringement” and “adds uncertainty to the law and its application”.

Summary: Commil’s petition for rehearing en banc was denied. Judges Reyna, Rader, Newman, Lourie and Wallach joined in a first dissent. Judges Newman, Rader, Reyna and Wallach joined in a second dissent. The first dissent argued that “[t]he Commil majority established a substantive, precedential change in patent law by expressly ‘hold[ing] that evidence of an accused inducer’s good-faith belief of invalidity may negate the requisite intent for induced infringement’” (“no principled distinction between a good-faith belief of invalidity and a good-faith belief of non-infringement for the purpose of whether a defendant possessed the specific intent to induce infringement of a patent.”) However, the first dissent also argued that “[n]either the statute nor its legislative history provides that one who knowingly and successfully induces another to engage in conduct that infringes a valid patent can escape liability by showing it held a good faith belief that the patent was invalid” and that, under this holding, “an accused inducer that is deriving a benefit by knowingly and intentionally inducing an unsuspecting third party to directly infringe patent rights can itself escape liability based on a belief that the patent is invalid while the unsuspecting third party cannot.” It also argued that “infringement and invalidity are separate issues under the patent code and our precedent” (“there is no reasonable basis to impute questions of invalidity or liability into § 271(b) through the term ‘infringement’”), “wrongly conflates the defense of noninfringement with the defense of invalidity”, and “ignores the statutorily-mandated presumption of validity, see § 282(a), in that it sets up all patents as invalid, at least in the mind of the inducer” (striking “at the very heart of the presumption of validity by eroding patent rights that have been duly granted by the PTO based solely on an erroneous—albeit good faith—belief”). This dissent characterized the holding as providing “an escape hatch from liability of infringement that is not now in the statute” and concluded by comparing the holding to “waking up and unexpectedly finding that the sky is now green.” The second dissent argued “the full court’s majority refusal of en banc review of the panel’s ruling adds uncertainty to the law and its application.”

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