Dennis Crouch's Patently-O: Commil v. Cisco: Opening Briefs on Escaping Inducement Liability

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Commil v. Cisco: Opening Briefs on Escaping Inducement Liability Posted: 02 Feb 2015 08:01 AM PST by Dennis Crouch The patent statute identifiers “infringers” as those who make or use a patented invention without permission of the patentee. See 35 U.S.C. 271(a) (make, use, sell, offer-to-sell, or import).  The statute goes-on to also create joint-liability for inducting infringement.  35 U.S.C. 271(b) (“Whoever actively induces infringement of a patent shall be liable as an infringer.”).   In Commil v. Cisco, the Supreme Court is focused on inducement and the question of whether “a defendant’s belief that a patent is invalid is a defense to induced infringement” even when the patent is ultimately found valid and the belief proved unfounded.   The Federal Circuit held such a belief to be sufficient – if in good faith – to excuse allegations of inducement.  Commil challenges that new rule of law.  In its opinion, the Federal Circuit wrote that “[i]t is axiomatic that one cannot infringe an invalid patent” and thus one cannot induce infringement of a patent [wrongly] believed to be invalid. The first round of merits briefs have been with the Supreme Court. In its brief, Commil does a good job of characterizing the case: This case presents the question of whether a defendant may know about a patent, know that the patent is potentially relevant to its commercial activities, intentionally cause its customers to act in a manner that directly infringes the patent, and then avoid all liability because it subjectively—but incorrectly—believed that the patent was invalid. Cases in which the defendant's belief of invalidity was correct, of course, will never implicate this question, as in those cases the patent will be invalidated and a finding of invalidity moots the infringement question. [Commil Brief]. A core issue in the case is what the court meant in last term’s Global Tech decision when it held: “induced infringement under § 271(b) requires knowledge that the induced acts constitute patent infringement.”  Here, Commil seems to have the best historical argument based also upon Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476 (1964) ("Aro II"). In its brief, Commil also does not let go of the sideshow that throughout the trial “Cisco's counsel used religious references and played on stereotypes about Commil's owner and inventors, who are Jewish and reside in Israel.”  [See Patently-O] A number of entities have filed briefs in support of Commil. Writing for the IPO, Paul Berghoff explains: This new defense is unsupported by the text of Section 271(b), which nowhere mentions validity. Indeed, the patent statute lists noninfringement and invalidity as separate and distinct defenses in Section 282(b). Infringement and validity are independent questions and, although invalidity may preclude a defendant's liability in a patent suit, it does not preclude a finding of infringement. In practice, the Federal Circuit's decision in Commil renders inducement wholly ineffectual as a patent enforcement tool. [IPO Brief in Support of Commil]. AIPLA largely agrees with the IPO – arguing that the new defense will “significantly undermine the ability of patent owners to enforce their rights against indirect infringers, which is sometimes their only realistic mechanism for enforcement against infringing competitors.” [AIPLA Brief] Filing its own amicus brief, the U.S. Government (SG) also agrees with Commil – and takes a position that would re-invigorate inducement as a cause of action. Namely, the U.S. Gov’t argues that inducement only requires receipt of the patentee’s viewpoint that the conduct is infringing. See Aro II.  The Government’s point here is that the Federal Circuit is way off-base because its premise – that a non-infringement-belief avoids infringement – is wrong. [U.S. Gov’t Brief]. Several industry briefs explain the negative impact of the decision on their industry. Gilead Sciences: Treatment method patents are all-but lost. Abbvie: The pharmaceutical industry depends on patents that may only realistically be enforced against indirect infringers. PhRMA: These new uncertainties may chill research. One of the more interesting briefs was filed by the Medical University of South Carolina (MUSC). [T]he Federal Circuit's new rule directly conflicts with the presumption of validity awarded to patents under 35 U.S.C. § 282 and with this Court's holding in Microsoft v. i4i (2011) that § 282 requires an invalidity defense to be proven with clear and convincing evidence. Furthermore, the Federal Circuit's new rule will require courts to develop an expansive new body of case law for induced infringement, contrary to this Court's guidance in Limelight v. Akamai (2014). [MUSC Foundation amicus]. [Further reading]

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