Commil USA, LLC v. Cisco Systems, Inc.

SCOTUS Docket No. 13-896
May 26, 2015

Supreme Court of The United States

Brief Summary: FC decision “that the trial court erred in excluding Cisco’s evidence of its good-faith belief that Commil’s patent was invalid” incorrect; SCOTUS concludes “defendant’s belief regarding patent validity is not a defense to an induced infringement claim.”

Summary: Cisco was previously found liable for direct and induced infringement of Commil’s patent relating to short-range wireless networks. The DC refused to admit Cisco’s evidence a good-faith belief the patent was invalid. The FC found the DC erred in exluding that evidence (Commil, FC 2013 (“it is ‘axiomatic that one cannot infringe an invalid patent…evidence of an accused inducer’s good-faith belief of invalidity may negate the requisite intent for induced infringement.” (Judge Newman dissented))) The opinion reviewed direct infringement (§271(a), strict liability, defendant’s mental state irrelevant), inducement to infringe (§271(b), defendant must know of the patent and that “induced acts constitute…infringement” (Global-Tech, US 2011; Aro, US 1964 (“Aro II”)), and contributory infringement (§271(c), knowledge of both the patent in suit and patent infringement). Under Global-Tech, the Court first explained, induced infringement requires “proof the defendant knew the acts were infringing”. And it explained that “[t]he scienter element for induced infringement concerns infringement; that is a different issue than validity” (“When infringement is the issue, the validity of the patent is not the question to be confronted.” (Cardinal Chemical Co., US 1993); “infringement and invalidity are separate matters under patent law” (citing Pandrol, USA, CA Fed. 2003); “the issues of infringement and validity appear in separate parts of the Patent Act”). The Court wrote that “this new defense” would be contrary to the presumption of patent validity and “a defendant could prevail if he proved he reasonably believed the patent was invalid”, thereby “circumvent[ing] the high bar Congress is presumed to have chosen: the clear and convincing standard” (Microsoft, US 2011). “An accused infringer can, of course, attempt to prove that the patent is suit in invalid” and, if achieved, “there is no liability” (and “accused inducers…have various proper ways to obtain a ruling to that effect” (DJ, inter partes review, ex parte reexamination, affirmative defense)). Thus, the FC decision was vacated and the case remanded. In the final section of the opinion, the Court addressed the “industry…in which firms use patents not as a basis for producing and selling goods but, instead, primarily for obtaining licensing fees” (eBay, US 2006), although “[n]o issue of frivolity [was] raised by the parties in this case” (“nor does it arise on the facts presented to this Court”), noting that “district courts have the authority and responsibility to ensure frivolous cases are dissuaded” (“it is within the power of the court to sanction attorneys for bringing such suits”). Justice Scalia’s dissent argued that “a patentee’s exclusive right to practice his claimed invention” may only be provided by valid patents since “only valid patents can be infringed” (“To talk of infringing an invalid patent is to talk nonsense.”)