Supreme Court asks for SG’s Views on Hearing Another Inducement Case

Commil USA v. Cisco Systems (Supreme Court 2014)

In its decision on this case, the Federal Circuit offered three separate opinions, with Judge Prost authoring a majority opinion and Judges Neman and O’Malley each dissenting-in-part (each disagreeing with a different part of the majority opinion). See Jason Rantanen, Commil v. Cisco: Issues of validity “may” negate intent for inducement, Patently-O (2013). Professor Rantanen writes:

The primary issues addressed by the court [involved] a pre-Global-Tech jury instruction [on induced infringement] and the appropriateness of considering validity when determining whether the accused party possessed the requisite state of mind for inducement of infringement.  All three judges on the panel agreed that the jury instruction was both erroneous and prejudicial while Judges Prost and O’Malley agreed that issues of validity may be considered in the intent inquiry.

Both parties petitioned the Supreme Court for review and the high court has now given those petitions a breath of life by requesting that the Solicitor General file an amicus brief providing its views on whether a grant of certiorari is warranted. If certiorari is granted, the case would be heard next term.

Commil (the patentee) asks: 

1. Whether the Federal Circuit erred in holding that a defendant’s belief that a patent is invalid is a defense to induced infringement under 35 U.S.C. § 271(b).

2. Whether the Federal Circuit erred in holding that Global-Tech v. SEB, 131 S.Ct 2060 (2011) required retrial on the issue of intent under 35 U.S.C. § 271(b) where the jury (1) found the defendant had actual knowledge of the patent and (2) was instructed that “[i]nducing third-party infringement cannot occur unintentionally.”

The appellate panel ordered a partial retrial on the issue of induced infringement.  Cisco (the accused infringer who lost the original trial) asks:

Whether, and in what circumstances, the Seventh Amendment permits a court to order a partial retrial of induced patent infringement without also retrying the related question of patent invalidity.

32 thoughts on “Supreme Court asks for SG’s Views on Hearing Another Inducement Case

  1. Especially after the most recent Sup. Ct. decisions, how could one realistically think that this Sup. Ct. is going to let defendants be found guilty of inducing patent infringement if they had an objective and reasonable belief that the patent was invalid?

    So, is this case even adequately ripe for cert with an adequate D.C. fact-finding for the latter issue?

    1. they had an objective and reasonable belief that the patent was invalid

      The presumption of validity exists until adjudicated otherwise, right paul?

      Or are you suggesting that that particular law be disbanded…?

      1. The presumption of validity exists until adjudicated otherwise

        So is all infringement “willful” then? Even if I have a reasonable opinion that the patent is invalid and/or prior art that destroys the claim?

        Just trying to follow your logic here.

        1. Nice dust-kicking Malcolm.

          You do realize that the concept of willfulness has its own particular meaning in patent law, right?

          (think treble damages).

      2. Knowing full well how the examination sausages are made, I can tell you that the presumption of validity is a cruel joke played on the public at large. That said, the presumption of validity is there plain as day in the statute, and so I agree with anon that a mere belief of invalidity shouldn’t absolve someone of intent to induce infringement.

        1. The cruel joke is that those who are PAID to do their Fn jobs keep on making excuses as to why they are not doing their Fn jobs and no one seems to care to pass legislation that actually improves how to do the Fn jobs.

          1. While there may be some slackers here at the PTO, the problem is actually that examining a patent application is an attempt to prove a negative, i.e., that there is no prior art sufficient to render a claim anticipated or obvious. We’re limited not just by time constraints, but also the availability of published art, the intricacies and difficulties of searching, etc. There was a post here not long ago about a USENET post rendering a claim invalid, and most patent examiners would probably not have found it in the time allotted, even if they had thought to look there in the first place.

            When it comes down to it, allowing an application is often less about stamping it with our gold seal of approval, and more about knowing when we have to give up and move on to the next case in order to meet our production requirements.

            1. Sadly your view is part of the problem, and reveals why examination is such a cluster.

              This is not meant as a slam against you personally – hey, I get that you are a cog in the machine. But you blithely accept that your examination effort is tied to production requirements without realizing the banality of what that actually means.

              You get what you measure, and if all that you are measuring is how much paper you push, then that is all that you are going to get.

              Bottom line: if you are not a part of the solution, you are a part of the problem.

            2. if you are not a part of the solution, you are a part of the problem.

              Fascinating.

              So with respect to people who the PTO want to hire a lot more high quality Examiners and create far better infrastructure so that the searching of prior art is greatly improved “part of the solution” or “part of the problem”?

            3. Nice strawman Malcolm.

              Again you want to try to paint “those” as being anti-patent, and yet, I do not EVER recall anyone here actually fitting the description of your “those.”

              It’s like you conjured up this being just to knock him down.

    2. The trend away from strict liability that the ’52 Act unintentionally introduced into patent law in 271(c) has to be stopped.

      We should really should start thinking about amending 271 along the lines of the following:

      “With respect to infringement under this section, knowledge of the patent or that one’s acts constitute patent infringement shall not be required.”

      1. The trend away from strict liability that the ’52 Act unintentionally introduced into patent law in 271(c) has to be stopped.

        Was the inclusion in 271(c)’s of “knowing the same to be especially made or especially adapted for use in an infringement of such patent …” unintentional?

        1. Rich came up with the language, but there is no hint in anything he said in advance of the enactment that knowledge of the patent was what he was talking about. What he was rather that one must know that the combination that ultimately was found to be an infringement going to happen. That is what the law required before ’52.

          There is no hint that Congress intended to change the default law for any reason. It was intended as an enactment only.

          Take a look at fn. 8 of Aro II (Richard H. Stern was on the government brief for Aro I. I wonder if he was clerking on the court for Aro II. Richard?) which lays out the case for the 4-judge minority view.

          The Aro courts split 5-4. Burger, Black, Douglas, Clark and White, yes. Harlan, Brennan, Stewart and Goldberg no.

          link to scholar.google.com

    3. In Grokster, the Supreme Court cited with approval Gershwin Pub. Corp. v. Columbia Artists Management, Inc., 443 F. 2d 1159, 1162 (CA2 1971), cited by the Supreme Court:

      “A person who has promoted or induced the infringing acts of the performer has been held jointly and severally liable as a “vicarious” infringer, even though he has no actual knowledge that copyright monopoly is being impaired.”

        1. anon, but the SC did cite it with approval. Inducement in copyright does not require knowledge that the acts induced were cover by the copyright laws. Read the case.

  2. My word, are we not taking the mistake (5-4) of Aro I to an extreme? Thank you Judge Rich for screwing up patent law by codifying indirect infringement but not being careful when you did it.

    1. Ned,

      Your anti-Rich rants are not helpful. He is gone and we would be better off talking about measures that involve the current set of actors.

      1. anon, then blame the SC.

        How can it be that the direct infringer is strictly liable and the person who caused him to infringe not be strictly liable?

        Aro was wrongly decided, but it was the lack of care in drafting 271(c) that is the problem.

        1. Isn’t that how the common law works for inducement in other areas where copyright isn’t codified? For example, see MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) in the copyright context.

          I believe the same is true in the trademark context. See Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 855 (1982).

          Maybe I need to read Aro again, which you reference, but it seems like the current law is correct.

          1. Interesting view, but see, Gershwin Pub. Corp. v. Columbia Artists Management, Inc., 443 F. 2d 1159, 1162 (CA2 1971), cited by the Supreme Court:

            “A person who has promoted or induced the infringing acts of the performer has been held jointly and severally liable as a “vicarious” infringer, even though he has no actual knowledge that copyright monopoly is being impaired.”

            Grokster did not have a case before it where that involved the question of whether inducer knew that the act induces involved copyright infringement or not. Would Grokster been let off the hook had it a mistaken, but good faith, belief that digital copying was not infringement?

            1. Keep in mind my earlier admonition concerning the use of the Grokster case – the party in that case was clearly tainted with unclean hands (and appeared in court eager to offend the sense of “justice” then prevalent). They effectively advertised their guilt and their was zero chance that they could even have attempted to get off the hook by pointing to some “mistake.”

              Contrast that case with the Betamax case, in which the video player providers won by co-opting some of those whose shows were being copied, and who approved of such copying (you know, wink wink, for time delayed purposes).

            2. The whole point here, anon, is that induced copyright infringement does not require knowledge that the acts induced were covered by anyone’s copyright.

              But that case was not before the Grokster court, so they never had to even address that issue. But they did cite Gershwin with approval.

            3. Ned,

              You aren’t reading Gershwin correctly. Note the word “vicarious” in that quote. Vicarious liability has other limitations. For example, the court in Gershwin goes on to talk about the employee-employer relationship, and also that one could be vicariously liable “if he has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities.” This isn’t the inducement that we are talking about. (It seems possibly more akin to joint liability / direction and control under Muniauction in the patent context.) Recent 2nd Circuit cases are in accord. See Arista Records, LLC v. Doe 3, 604 F.3d 110 (2nd Cir. 2010).

              More importantly, Gershwin further states: “Similarly, one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a ‘contributory’ infringer.” 443 F.2d 1159, 1162 (2nd Cir. 1971). Note the “with knowledge” portion of the sentence. This is the inducement that we are talking about.

              Respectfully, I think you are wrong on this. The case law does not support your position.

              See the following quote from Belmont v. MB Inv. Partners, Inc.
              708 F.3d 470 (3d Cir. 2013):

              To begin with, the Investors’ contention that they need only prove recklessness because § 20(a) liability is “secondary and not primary” is contrary to the general principle that, when liability is secondary or derivative, a more culpable mens rea, not a lesser one, is required. See, e.g., MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 930, 125 S.Ct. 2764, 162 L.Ed.2d 781 (2005) (noting that secondary liability for copyright infringement requires intentional inducement of direct infringement); Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854, 102 S.Ct. 2182, 72 L.Ed.2d 606 (1982) (holding that secondary liability for trademark infringement arises when a manufacturer or distributor intentionally induces another to infringe); Vita–Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317, 1328 (Fed.Cir.2009) (noting that secondary liability for patent infringement requires a showing that the defendant “knowingly induced the infringing acts” with “a specific intent to encourage another’s infringement of the patent”); Decker v. SEC, 631 F.2d 1380, 1387 n. 12 (10th Cir.1980) (noting that many courts have concluded that secondary liability for securities law violations requires either intent to aid and abet or knowledge of the underlying violation).

              See also Dream Games of Arizona, Inc. v. PC Onsite, 561 F.3d 983 (9th Cir. 2009); Bridgeport Music, Inc. v. WM Music Corp.
              508 F.3d 394 (6th Cir. 2007); CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544 (4th Cir. 2004).

            4. anonymous, two points:

              1. Gershwin was about liability without knowing that the act induced was copyright infringement.

              2. The direct infringer is has no defense of lack of mens rea. In a trial, how do you justify imposing liability on a totally innocent party, the party induced, without imposing liability on the party at fault. To me, this is morally repugnant and it cannot be right.

            5. Like the “innocent infringer” discussion, Ned – you perhaps presume too much with your notion of ” totally innocent party.”

        2. was the lack of care in drafting 271(c) that is the problem.

          How many problems of the future will circle back to the drafting of the AIA?

          One wonders…

          …who to blame, who to blame.

          1. Anon, we already have numbers of examples of problems with the AIA, from the 314(d)/315 interface, to the conduct of IPR trials and what the statutory burden of proof means on the petition means in point of fact as examiners always had 132 to rely on, to

            “otherwise available to the public.”

            That phrase is going to launch 100 years of uncertainty in the law as to exactly what it means. We have come up with plenty of scenarios that illustrate that it would be entirely unfair to American inventors to have their patents invalidated just because somebody, somewhere may know something that might be relevant. The potential for abuse is astounding and what is the whole point of this? Why did we shoot ourselves in the foot in this way?

            1. Do you really need to ask that question, Ned?

              Look at who pushed heavily for the AIA: Big Corp.

              Don’t act so surprised as to the effects obtained.

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