Commil USA, LLC v. Cisco Systems, Inc.

PETITIONER: Commil USA, LLC
RESPONDENT: Cisco Systems, Inc.
LOCATION: U.S. District Court for the Eastern District of Texas, Marshall Division

DOCKET NO.: 13-896
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT: United States Court of Appeals for the Federal Circuit

CITATION: 575 US (2015)
GRANTED: Dec 05, 2014
ARGUED: Mar 31, 2015
DECIDED: May 26, 2015

ADVOCATES:
Ginger D. Anders - for the petitioner
Seth P. Waxman - for the respondent
Mark S. Werbner - for the petitioner

Facts of the case

Commil USA, LLC (Commil) holds a patent on a method to implement short-range wireless networks. Commil sued Cisco Systems, Inc. (Cisco) and alleged that Cisco performed the patented method and induced its customers to infringe by performing the patented method. Cisco argued that Commil's patent was invalid for indefiniteness, non-enablement, and lack of written description. The district court found for Commil and awarded more than $70 million in damages. Cisco appealed and argued that the trial court erroneously instructed the jury that the standard for inducement was negligence and precluded the submission of evidence of Cisco's good-faith belief that Commil's patent was invalid. The U.S. Court of Appeals for the Federal Circuit reversed and held that the standard for induced infringement is actual knowledge or willful blindness, and therefore that a good-faith belief of patent invalidity was a defense to claims of induced infringement.

Question

Is a good-faith belief that a patent is invalid a defense to a claim of induced infringement?

Media for Commil USA, LLC v. Cisco Systems, Inc.

Audio Transcription for Opinion Announcement - May 26, 2015 in Commil USA, LLC v. Cisco Systems, Inc.

John G. Roberts, Jr.:

Justice Kennedy has our opinion this morning, Case 13-896, Commil USA v. Cisco Systems.

Anthony M. Kennedy:

The classic case of patent infringement involves a company that learns a competitor is making and selling a product that infringes the company's patent, and this is direct infringement.

The respondent here was found liable for directly infringing petitioner's patent, but that's not the major point or thrust of this case, because respondent was also found liable for form of secondary liability known as induced infringement.

This is when an entity induces others to infringe a patent.

The question presented to this court is whether in a suit for induced infringement it is a defense if the defendant shows that it had a good faith belief in the invalidity of the patent?

The patent holder who commenced this action is the petitioner here, Commil USA, LLC. Commil sued Cisco, and Cisco is the respondent.

Commil alleged that Cisco had infringed Commil's patent.

In addition, Commil alleged Cisco had induced others to infringe the patent.

In defense to the charge of induced infringement, Cisco argued it had a good faith belief that Commil's patent was invalid.

It sought to introduce evidence to support that assertion.

But the District Court ruled its evidence inadmissible.

In other words, the District Court held that good faith belief and invalidity is not a defense.

The Court of Appeals for the Federal Circuit disagreed with that and remanded for further proceedings on the point.

This Court granted certiorari.

Today's opinion holds that a good faith belief in invalidity is not a defense to induced infringement.

§271(b) of the Patent Act requires that the defendant actively induced infringement.

That language requires intent to bring about the desired result, which is infringement.

And because infringement and validity are separate issues under patent law, belief regarding validity cannot negate the scienter required for inducement.

To say that an invalid patent cannot be infringed or that someone cannot be induced to infringe an invalid patent is in one sense a simple truth, both as a matter of logic and semantics.

And to be sure if at the end of the day an Act that would have been an infringement or an inducement to infringe involves a patent that is shown to be invalid, then there is no patent to be infringed.

But the allocation of the burden to persuade on these questions and the timing for the presentation of the appropriate arguments are concerns of central relevance to the orderly administration of the patent system.

There are also practical reasons not to create a defense based on good faith belief and invalidity.

Accused inducers who believe a patent is invalid have various proper ways to obtain a ruling to that effect.

For instance, they can seek reexamination of the patent by the Patent and Trademark Office; and in fact, Cisco did that in this case.

And any accused infringer or inducer who believes the patent ensued is invalid may raise the affirmative defense of invalidity.

For these reasons and others set out in the opinion the judgment of the Court of Appeals is vacated.

The case is remanded for further proceedings consistent with this opinion.

Justice Thomas joins Parts 2B and 3 of the opinion for the Court.

Justice Scalia has filed a dissenting opinion, in which the Chief Justice joins.

Justice Breyer took no part in the consideration or decision of this case.