Cisco Argues that the Inducement Mens Rea Should Focus on Knowledge of Wrongdoing Rather than Merely Infringement

by Dennis Crouch

In the pending appeal of Commil v. Cisco, the Supreme Court is further honing-in on the knowledge aspect of induced infringement.  In particular, the court is addressing whether a defendant’s reasonable and good-faith (but ultimately incorrect) belief that a patent is invalid can be used to prove that the defendant did not knowingly induce infringement.

As background, the patent statute indicates that “[w]hoever actively induces infringement of a patent shall be liable as an infringer.”  In its 2011 Global-Tech decision, the Supreme Court ruled that inducement requires that the alleged inducer have acted with knowledge that the induced acts constituted patent infringement.

The patentee, Commil, argues that both statute and tradition distinguish between the doctrines of infringement and validity.  See 35 U.S.C. 282(b). In Commil’s construct, someone might infringe the patent, but not be held liable if the patent is found invalid or otherwise unenforceable.  Applying that distinction directly to Global-Tech knowledge-of-infringement requirement suggests that knowledge-of-invalidity is irrelevant. [I should note that Commil actually suggests that the court should relax its Global-Tech rule to only require knowledge of the patent’s existence and its potential relevance.]

Briefing is ongoing in the case with Cisco having now filed its responsive brief on the merits.  Oral arguments are now scheduled for March 31, 2015. The other patent case of the term – Kimble v. Marvel will also be heard that day.

In its brief, Cisco argues that a  good-faith but incorrect belief of non-infringement should excuse liability for inducement.  [Cisco Merits Brief]. As its central evidence, Cisco points to other language in Global-Tech that provides support for its infringement.  In particular, the Supreme Court noted that the case might turn the “probability of wrongdoing.” Further, the doctrinal statement from Global Tech does not merely focus on knowledge of infringement but instead whether the defendant will be “liable as an infringer.”  That liability element appropriately sweeps in the potential that the patent is invalid or otherwise not enforceable.  For support, Cisco cites to a series of other decisions where the scienter requirement’s purpose is tied to the moral justification of culpability. See, e.g., MGM v. Grokster, 545 U.S. 913 (2005) (copyright inducement).  Cisco plays upon the contemporary Supreme Court’s bent toward patent non-exceptionalism by citing to various tort and criminal inducement doctrines whose scienter requirements turn on belief of wrondoing.

Cisco also argues that the invalidity-belief-defense is good policy — especially because so many patents are actually invalid and because willful infringement already allows such a defense.  And, as might be expected based upon the Cisco CEO’s recent WSJ editorial, the brief also complains about the problem of patent trolls.

But a recent study shows that a record 5,411 patent infringement cases were filed in 2013, with the number of suits brought by nonpracticing entities growing by almost 20% over the previous year. . . . It is unrealistic to believe that inducement suits are not part of this problem and would not dramatically multiply if Commil obtains the change in law it seeks.

Although Cisco’s legal and policy arguments have merit, I suspect that the hundred-billion-dollar company’s attempt to play the victim here will be unsuccessful. At the very least though, this may be the first time in recent memory that the company has agreed that willful infringement is a ‘wrongdoing.’

= = = = =

An important subtext here is that the knowledge requirement becomes a critical defense only when it turns out that the patent actually is valid, enforceable, and being practiced based upon the active inducement of the defendant.  From a practical standpoint, the belief-of-invalidity-defense could short-circuit inducement cases when the defendant has a solid written opinion of counsel.  However, that presumably only saves an inducer from past-infringement and once validity is confirmed, any ongoing acts will lead to liability.

115 thoughts on “Cisco Argues that the Inducement Mens Rea Should Focus on Knowledge of Wrongdoing Rather than Merely Infringement

  1. 19

    Another issue here is the incentives to quickly fix bad patent claims (before possible infringement), rather than 5 to 15 years later.

    The Cisco argument weakens the incentives to quickly fix bad patent claims.

    The patent system will be stronger when there are strong incentives to actually test each “belief of invalidity” with (exparte, etc) action, sooner.

    That way bad patent claims will be killed/fixed more quickly after issue.

  2. 18

    Would this work? — a class action against direct infringers, a separate complaint against an inducer who for example, furnished class members software which when used with a fingerprint scanner infringed (en banc Suprema case just argued), where the argument is made that the inducer provides adequate representation for the class.

    The case proceeds and direct infringement of the class is proven. Method claims are involved, and the direct infringers owe millions in past damages.

    Is the inducer liable regardless that the patentee never demonstrated knowledge by the inducer of the patent? — or must the patentee obtain the damages from each member of the class?

    1. 18.1

      I think we covered defendant class actions in LS for maybe 8 minutes in CivPro.

      Don’t think I’ve heard of them in the decades years since then…

      How do you get to the part where “the inducer provides adequate representation for the class”? Don’t the inducer and the class members have disparate legal interests? Under the usual review for class status, I think this would boot it.

      1. 18.1.1

        OK, but on a filing of lawsuit going forward basis, they have the same liability. The damages for pre-suit use or making would not be of issue.

        But would it be conscionable to force the patentee to pursue each defendant individually to collect these past damages while holding the party responsible immune?

    2. 18.2

      Is the inducer liable regardless that the patentee never demonstrated knowledge by the inducer of the patent?

      This is precisely why the alleged inducer can’t possibly provide adequate representation for your defendant class. So no, it won’t work.

    3. 18.3

      The policy behind inducement liability to allow suit to be maintained against the party responsible for the tort and because the direct infringer’s liability might be too small to justify individual suits. The rule that the inducer can avoid liability because they did not have notice of infringement or marking frustrates this policy effectively providing a default rule that notice or marking is required in all cases where small direct infringers are involve.

      But, since the Supreme Court has ruled in Global-Tech, I guess we might have to live with this rule.

      1. 18.3.1

        How is notice or marking at play?

        Do the new paradigms of “website” notice, courtesy of the AIA, change your views?

        1. 18.3.1.1

          Global-Tech did discuss marking and notice, IIRC. The requirement for actual knowledge of infringement seems satisfied by either.

          The government brief is very interesting in that it says that Aro II is controlling. The notice in that case was provided by a letter to the defendant notifying it that the sale of the softtops was contributory infringement of the patentee’s patent.

          Notice or marking. That was the kind of knowledge before the court in Aro II, and that is the kind of notice required. The private beliefs of the party notified are immaterial.

          This case goes beyond the issue of validity — if you read the government brief. It goes to a central error of the Federal Circuit that good faith belief of non infringement can relieve the inducer of liability.

  3. 17

    I wanted to bring to the attention of people on this board a recent article that has me convinced we are not properly framing infringement liability (see, e.g., analogies and references to “strict” liability for direct infringement).

    This article made me question why we assume direct infringement is strict, without actually looking at what that means, and without considering the words of the statute.

    The article can be found here.

    Here is the abstract:
    This article challenges the dogma of U.S. patent law that direct infringement is a strict liability tort. Impermissibly practicing a patented invention does create liability even if the infringer did not intend to infringe or know about the patent. The consensus is that this is a form of strict liability. The flaw in the consensus is that it proves too little, as the same is true of intentional torts: intent to commit the tort is unnecessary, and ignorance of the legal right is no excuse. What is relevant is intent to perform the action that the law deems tortious. So for the tort of patent infringement, the question is whether liability should require that the infringer intended to perform the actions that constitute infringement. The patent statute and the few cases that have broached the question suggest the answer is yes — tortious intent should be necessary. However, patent law currently takes no position at all on tortious intent. The strict liability view is merely a default. This article fills that gap by applying ordinary tort principles to patent infringement. The proposed framework offers a powerful policy lever for important issues implicating the notice function of patents, including divided infringement, claim construction, and inherency. This framework also mitigates the effects of patent assertion on risk allocation in the patent system by differentiating among makers, sellers, and users of patented innovation — a distinction that is economically important but has no principled basis in patent doctrine.

    Having read the article, I am convinced the author is right. To be clear, I am not happy about his conclusions in some respects, but they are coherent and well-supported.

    1. 17.1

      WT, thanks.

      As Rich said in testimony before Congress that knowledge of the infringing nature of the acts was not required to infringe a patent. But he must intend to do the acts that constitute infringement.

      1. 17.1.1

        Right, the conclusion the author draws is that direct infringement is much more akin to an intentional tort and calling it “strict liability” is improper. I agree.

        1. 17.1.1.1

          Thank you for the reference – I will read it this evening.

          Food for thought though until then, from Black’s Law Dictionary:

          Intentional tort: A tort committed by someone acting with general OR specific intent.

          General intent: The state of mind required for the commission of certain common-law crimes not requiring a specific intent OR not imposing strict liability.

          Strict liability: Liability that does not depend on actual negligence or intent to harm, (but that is based on the breach of an absolute duty to make something safe).

          Apart from the safety aspect then, which of the above accords best with the nature of the patent right?

        2. 17.1.1.2

          First read through and he work is plainly a crock of C R P, with the author fully making up new policy drivers to reinvent the existing law.

          I will go through it again, but this is serious fantasy land stuff.

          1. 17.1.1.2.1

            It does sound like just another judicial activist’s attempt to weaken the system. They are coming out of the woodwork at this point. I wonder if Lemley had anything to do with getting him his job. Lemley has spawned itself and created a whole host of Lemley’ite professors.

  4. 16

    Assume for the following examples that no one has knowledge of the patent. Assume in every case that there is a direct infringer. Can anybody reliably tell me whether the other party, not the direct infringer, is liable?

    1. Master-servant. The master orders the servant to do the things that are in infringement. Is the master liable?
    2. Principal-agent.
    3. Employer-employee.
    4. Employer-independent contractor.
    5. Prime contractor-subcontractor.
    6. Architect-contractor.
    7. Corporation – wholly-owned subsidiary.
    8. Corporation – controlled but not wholly-owned subsidiary.
    9. Partnership-partner.
    10. Parent – child.
    11. Priest – congregation.
    12. Co-conspirators.
    13. Joint tortfeasors.

    Where is the dividing line if there is one between imposing and not imposing liability on the indirect actor? What is the policy of the law here?

    1. 16.2

      Consider Keplinger v. De Young, 23 U.S. 358, 6 L. Ed. 341, 6 S. Ct. 341 (1825). link to scholar.google.com

      In this case, the defendant had a contract with another to manufacture chains, agreeing to buy the entire production output for a period of time. The machine used by the supplying party was in infringement of the patent owner’s patent.

      The Supreme Court ruled that simply purchasing the output of a infringing machine without more was not in infringement. However, the court suggested in dicta that if the contract was not the whole story, for example if the contracting party owned the machine in whole or in part, then the result would have been different.

      Thus the principle seems to be laid down here that an owner or part owner of the machine is liable for “use” of the machine if he rents it to others and they use the machine.

      How can it be that the owner of a machine can escape liability for infringement if he does not know of the patent, where the direct user is liable.

      There are many cases holding a contractor liable for infringement for providing plans to another to build and infringing machine. Are we to say these cases are overruled by Global Tech to the extent that the contractor does not know of the patent?

      1. 16.2.1

        “How can it be that the owner of a machine can escape liability for infringement if he does not know of the patent, where the direct user is liable.” That is the Global-Tech rule articulated by the Supreme Court. Unless it is shown that the inducer knew about the infringement, the direct infringer is liable and the inducer is not. The rule puts a burden on plaintiffs to uncover potential inducers and send them a letter before filing suit.

        1. 16.2.1.1

          Nor, I agree that that is what it does. The direct infringer is liable without notice if the patent is a process patent, but the person who causes the infringement, who benefits from it financially is not liable?

          There is a problem here with ethics. The law should not be interpreted to provide an injustice.

  5. 15

    Parties don’t decide if a patent is invalid. Only courts and the PTO have that power. Until a court or the PTO finds a patent invalid, the patent is presumed valid, and any opinion before then is illusory.

    1. 15.2

      Peter,

      A parallel argument can be made on the infringement front. As the supreme court recently held, a patent is presumed not-infringed and it is the patentee’s burden to prove infringement. See Medtronic, Inc. v. Mirowski Family Ventures.

      1. 15.2.1

        But that only provides MORE reason to remain moored to the trespass model – not less.

        Intent to step on “the land,” as opposed to “just whose land that is,” is critical given the different (what you call parallel) arguments.

        They simply are NOT as parallel as you would have them, one being a presumption FOR validity (at law – no matter how much, or how often, that presumption is attacked by pundits, by the courts themselves, and by those wishing to weaken patent rights from both the Left and from the Right), and this in favor of the patent holder, while the other is a “chore” that the patent holder must accomplish to prevail, requiring action and a showing BEYOND the record that was achieved with the Quid Pro Quo grant of the patent.

        When looked at in this context, one can readily see that the two are not in fact mirror images, the two are not in parallel in important pedagogical moorings.

        Just as it is important to distinguish the “criminal” from the “property” aspects, so too it is important to distinguish validity and infringement, and the actions of which ever parties are implicated by those items.

  6. 14

    Knowledge of “wrongdoing” is ground for willful infringement. If a party induces infringement of a “known” patent that it believes in good faith to be invalid, it should not be held liable for willful infringement.

    If a party is unaware of a patent, it should not be held liable for inducing infringement. However, if a party has knowledge of a patent that remains valid after trial, and any appeal, it should not escape liability for inducing infringement because of its own mistaken belief.

    However, if a party

  7. 12

    Dennis,

    It is very interesting that Cisco never argues the “intentional tort” doctrine. Walker v. Cronin, 107 Mass. 555 (1871). The Massachusetts Supreme Judicial Court adopted Holmes’ analytical approach to intentional tort in Plant v. Woods, 176 Mass. 492, 57 N.E. 1011 (1900). And later the U.S. Supreme Court adopted Plant v. Woods as a general civil tort concept. I think 271(b) is most closely analogous to RESTATEMENT (SECOND) OF TORTS § 870 (1979). In the intentional tort doctrine, justification and knowledge are important. Kawaauhau v. Geiger, 523 US 57 (1998) (Ginsburg, J. for an unanimous Court): “Intentional torts generally require that the actor intend “the consequences of an act,” not simply “the act itself.” Restatement (Second) of Torts § 8A, Comment a, p. 15 (1964). The Kawaauhaus’ more encompassing interpretation could place within the excepted category a wide range of situations in which an act is intentional, but injury is unintended, i.e., neither desired nor in fact anticipated by the debtor. Every traffic accident stemming from an initial intentional act—for example, intentionally rotating the wheel of an automobile to make a left-hand turn without first checking oncoming traffic—could fit the description. See 113 F. 3d, at 852. A “knowing breach of contract” could also qualify. See 113 F. 3d, at 852. A construction so broad would be incompatible with the “well-known” guide that exceptions to discharge “should be confined to those plainly expressed.” Gleason v. Thaw, 236 U. S. 558, 562 (1915).” More recently re intentional tort, in Staub v. Proctor Hosp., 131 S. Ct. 1186, 1191 (2011); Safeco Ins. Co. v. Burr, 551 U.S. 47, 58 (2007), the Supreme Court confirmed that “when Congress creates a federal tort it adopts the background of general tort law.” And where the federal tort is an intentional tort, “as distinguished from negligent or reckless torts, [it is generally required] that the actor intend the consequences of an act, not simply the act itself.”

    Jonathan

    Jonathan

    1. 12.1

      Jonathan,

      Do you think that perhaps because infringement (straight infringement) being a strict liability offense – and thus falling more to trespass as a model – has anything to do with the decision to NOT model infringement as you posit?

      Perhaps the reason why the argument you bring up was not embraced was because that argument appears to make it very easy for the court to decide against Cisco…

      1. 12.1.1

        Anon,

        271(b) is not a strict liability offense. It is about mens rea – 271(b) includes the element of intent. 271(b) is about the intention to cause harm or negligence, these two elements are necessary (prerequisite) to liability under 271(b). From its historical roots 271(b) is most similar with Homes’ intentional tort doctrine looking at the defendant’s actual subjective state of mind. Homes’ intentional tort doctrine is based on Mogul Steamship Co. v. McGregor, Gow, & Co., 18 23 Q.B.D. 598, 613 (1889), affirmed, [1892] App. Cas. 25; see also Skinner & Co. v. Shew & Co., 1 Ch. 413, 422 (1892) (Bowen, L.J.), both stating that “at Common Law there was a cause of action whenever one person did damage to another willfully and intentionally, and without just cause or excuse.”

        Jonathan

        1. 12.1.1.1

          Jonathan – please read my other posts – the men’s rea involved is reflective of the same type of men’s rea involved in trespass.

          That mens rea is the intention to do the act.

          Is that not the appropriate model?

          You are repeating yourself in saying that the conclusion you want to reach is a different model. But the only support for that that you are providing is the conclusion you want to reach.

          Adding more (non-patent) background to the intentional tort doctrine does NOT help you establish that patent infringement is a non-trespass type of tort.

          You may very well have a strong case – you just have not put anything in the table yet to indicate that patent infringement should not be modeled – as it as always been – on trespass.

          1. 12.1.1.1.1

            anon,

            It does not seem to me that your model is complete, either (or perhaps that you are arguing from the endpoint sought to be achieved, just as you say Jonathan does).

            Sure, patent infringement is like trespass. You don’t have to know that the land belongs to another to trespass. And you can trespass even with a good faith belief that the land does not belong to another. People have even been found to trespass when they had a good faith (but incorrect) belief that the land was their own, right?

            Inducement is another matter. I don’t know if any jurisdiction has a statutory crime of inducement to trespass, but let’s posit for a moment that it exists. If it does, it (like other crimes of intentional inducement) would require that the inducer have knowledge that the land belonged to another. If I know the land belongs to another and I induce someone to pass upon it, I have induced that crime.

            But what if the accused inducer had a good faith belief that the land did not belong to another, or that the boundaries of the other’s land were different than what they (truly) legally were? E.g., he does have the intent to tell the other person to pass upon that land, but believes it does not belong to the plaintiff. Here, the inducer has not intended to induce a crime. His intent is to induce an innocent act.

            That he was incorrect about the act’s innocence does not change his intent into an intent to induce a crime.

            I do have more trouble accepting all the above in the induced patent infringement context, where there is a rich history (of which large companies like Cisco are certainly aware) of defendants being held to have been wrong about their prior assessment of the boundaries of the patent or of invalidity.

            In real property, one will much less commonly be wrong about where the legal boundaries of the property lie.

            In patents, despite a thorough investigation costing upwards of $100K in legal expert fees, it is dismayingly common to have a court eventually hold your assessment of the boundaries of the claims (or invalidity of the claims) to have been incorrect.

            Given a common knowledge of the uncertainty of any expert opinion of any patent, should the intent inquiry be simply whether the inducer intended to induce the act itself? Perhaps so.

            I wish we had a defendant bringing this question which was a bit less unsympathetic than Cisco, because even the SCt it seems can have some trouble separating the act from the actor.

            1. 12.1.1.1.1.1

              Two people, one who acts, the other who directs, causes the action to occur.

              The one who acts is liable if the action is against the law. Ignorance of the law is no excuse.

              But what of the director, the one who directs, causes the action to occur? Why should he not be liable to the same extent as the actor?

              To me, there is something very wrong about the original Global-Tech decision extending Aro II to inducement. That said, it must be contained and eventually overturned by statute if necessary.

              1. 12.1.1.1.1.1.1

                Ignorance of the law is no excuse.

                Except when it is. That’s the point that we’re trying to figure out in this case, isn’t it?

                1. Since I’m sure people would want examples, here’s the Ninth Circuit model jury instructions for “knowingly” in the criminal conduct. As the instructions show, there are in fact statutes that require knowledge that something was against the law in order to be criminally liable. E.g., criminal copyright infringement.

                  Just wanted to point out that in fact, sometimes ignorance of the law is an excuse, and that’s in part what SCOTUS is figuring out in this case.

                2. Jane, look at your own offerings: criminal aspects.

                  Again – look again at the foundational aspect of patents: property (personal property) – NOT criminal.

                  Methinks too much baggage was carried with the word “inducement” – too much of that same “criminal” (and very much incorrect context) of that word.

                  Is it not time to restore the proper context?

                3. Jane, do you realize that inducement is basically a brand of co-tortfeasor? I think it originally came out of the master servant relationship where the master who directed the infringement was bound by the actions of the servant.

                4. Ned,

                  I was addressing your statement generally, not your specific claims in this matter.

                  My point is, saying “ignorance is no excuse” and then concluding that must mean intent to infringe does not exist as an element of the claim ignores that sometimes it is an element, and that’s what the Supreme Court is deciding. The statement “ignorance is no excuse” begs the question.

                5. Not so Jane / ig noring the context (as you do in this particular application of the phrase) is what is “begging the question.”

                  You just don’t get to ig nore the foundations of what patent law entails.

                  No one (no matter whether they wear robes or not) should.

                6. Jane, if knowledge of the patent is not required to directly infringe, then why is it an element that must be proved for a co-conspirator or co-tortfeasor?

          2. 12.1.1.1.2

            “Is that not the appropriate model?”

            No.

            “patent infringement should not be modeled – as it as always been – on trespass.”

            Patent infringement can be at the same time that inducin isn’t. Look at it this way, how many laws are there punishing people for “inducing trespass”? There is no “model” to be had for inducing from trespass law.

        2. 12.1.1.2

          There are also practical consequences of adding mens rea as an element of the tort. In a jury trial this typically would be shown through circumstantial evidence (it would be a rare trial to get the dramatic – ‘You can’t handle the truth’ – admission from a witness) and, therefore, logically a plaintiff would be entitled to very wide ranging discovery. Indeed, it is difficult to square a mens rea element with attorney-client priv. Without question the defendant would attempt to hide behind A-C priv., to shield evidence tending to show mens rea. Patent enforcement is vexatious and expensive enough already – adding mens rea – would make it much worse.

          Let’s face facts: A juggernaut like Cisco is not going to let an on-patent invention gain significant marketshare against Cisco sales momentum. In this situation, Cisco, of course will make the rational economic decision to infringe. Every blue moon Cisco will get caught. The typical Cisco PR spin of ‘innocent infringement’ through the appeal – is no reason to add mens rea to the tort. To me, it is a strawman.

    2. 12.2

      Jonathan, your argument proves too much.

      If your views were the law, a direct infringer would not be liable unless he knew of the patent and that his conduct infringed.

      Per Aro II, n. 8, congress did not intend to change the law regarding infringement, but simple to codify it. For example, Rich testified (n.11 of Blacks “dissent” (actually the majority on the point at issue)
      ” `[K]nowingly sells a component of a patented machine’ means to us that you know that the component is going into that machine. You don’t have to know that it is patented. You don’t have to know the number of the patent, and you don’t have to know that the machine that it is going into constitutes an infringement. You just know its ultimate destination.”

      But the “majority” (White, Black, Warren, Douglas, Clark) held that knowledge of the infringement was required.

      “The House Committee thus attempted to make clear that innocent persons, who acted without any knowledge that the goods they sold were adapted for use in the infringement of a patent which they knew about, could not be held liable as contributory infringers. It is hard to believe that Congress intended to hold persons liable for acts which they had no reason to suspect were unlawful, and as I have pointed out the legislative history shows Congress did not.” Id. at 527.

      How in the world is this consistent with the fact that liability for direct infringement requires no knowledge of the patent? The law places a duty on the public not to infringe a patent — thus there is liability for infringement without having direct knowledge of the patent.

      But those who actively induce the activity that is an infringement. Just how is it that they do not have the very same duty?

      1. 12.2.1

        just how is it

        The Royal Nine messed things up by meddling and imposing their readings into the words of Congress, unmooring the strict liability of the trespass liability from the underlying offense.

        Thanks Supremes. Again.

        1. 12.2.1.1

          Just to be clear, you’re not arguing that trespass is strict liability, right? Trespass is probably the most well-known of the intentional torts.

          1. 12.2.1.1.1

            Just to be clear, I am pointing out the difference in mens rea.

            The intent to step on that land, regardless of the intent to step on that particular owner’s land.

            Don’t be obtuse Jane.

            1. 12.2.1.1.1.1

              Anon,

              I would suggest you be precise in your language. “Strict” and “intentional” in the tort context have very specific meanings. If you are not using them that way, you should be clear about that so that people don’t dismiss your argument as uninformed. Adding confusion by calling trespass “strict” liability does not make your argument persuasive.

              1. 12.2.1.1.1.1.1

                Jane,

                I suggest that you tend to the log in your own eye before noting the mote in mine.

                We are after all talking about the patent context here.

                Don’t lecture on being uninformed when you can’t get out of your own way.

  8. 11

    Let us not forget that the law prior to ’52 was that all infringement was strict liability — one did not have to know that what one did or induced was an infringement of a patent.

    Aro decided 5-4 that the language of the statute changed the law to require knowledge of “infringement” meant knowledge of the patent.

    Global-Tech simply extended Aro.

    But if you read Aro, one can see that congress never intended to change the law of infringement. They wanted to codify it.

    Ugh! The best of intentions frustrated by bad draftsmanship.

    What would be nice would be to have congress revise 271(c) and (b) to restore its original intention.

  9. 10

    The statute merely requires:

    “(b) Whoever actively induces infringement of a patent shall be liable as an infringer. ”

    271(a) covers innocent infringers (who had no knowledge of the patent) so long as performed the acts.

    Unclear why 271(b) should capture even “innocent inducers”? (Yes, I think the Supreme Court got Global-tech wrong.

    I think we need to step back and ask what was the purpose of 271(b)?

    Often, patentees are unable to obtain a remedy from direct infringers (e.g., individual consumers), so 271(b) allows a remedy against those inducing the direct infringers to infringe.

    The Supreme Court has been gutting patents – death by a thousand cuts.

    Many reforms were needed, but I think they need to consider the combined effects of all theses drastic changes in the law and their cumulative impact.

    Just saying.

    Have a great weekend all.

    1. 10.1

      patentees are unable to obtain a remedy from direct infringers (e.g., individual consumers)

      Why not? Go ahead and sue them. They infringed. They are liable.

      Or hire a competent patent attorney, file a continuation or reissue and present a claim that’s infringed by someone who can “provide you with a remedy.”

      Speaking of these consumers, will these individual consumers who are wrongfully sued and who spend thousands of dollars to defend themselves be able to “obtain a remedy” for their losses from Offshore Company Who Pushes Paper, LLC or Empty Office in Texas, LLC? Since you seem to care so much about “obtaining remedies.”

      1. 10.1.1

        Move the goalposts back Malcolm.

        Please realize that yes, the option to sue was there BEFORE Congress contemplated the addition to the law of this new path of remedy FOR the patent holder.

        This then is just another example of Malcolm self-FAIL.

        The smarmy comment indicates that the point Splinter is making is a valid point against your anti-patent views.

        Well done – and you are.

  10. 9

    “From a practical standpoint, the belief-of-invalidity-defense could short-circuit inducement cases when the defendant has a solid written opinion of counsel. ”

    But what happens when the defendant requested a validity opinion and her counsel knowing what she wants, bends over backwards to find an argument that the patent is invalid and presents that argument in the opinion letter?

    Is such a letter also a get out of jail free card?

  11. 8

    > Although Cisco’s legal and policy arguments have merit, I suspect that the
    > hundred-billion-dollar company’s attempt to play the victim here will be
    > unsuccessful

    You just can’t get over it, Dennis, the bashing of Cisco. You were one of the last to let go of the fixation on the inappropriate comments made by Cisco’s counsel during the trial many years ago. Your contempt for that company still seeps into your posts about this case, notwithstanding your attempts at subtlety.

    > However, that presumably only saves an inducer from past-infringement and
    > once validity is confirmed, any ongoing acts will lead to liability

    The pre- versus post-verdict issue is an interesting one, and one that can be dealt with by using an appropriate verdict form. The problem is that plaintiffs often propose “black box” verdict forms that ask one question on infringement, one question on validity, and a blank line for damages. But that’s a bad call if the defendant is sued only for inducement, because the jury has to check “no” for the infringement question if they don’t think the mens rea was established — even if they found an act of direct infringement that met all claim limitations. The defendant can go along its merry way because there’s no way to know how the jury made its ultimate finding.

    The lesson is that if you’re suing someone based only on inducement, you want to craft your verdict form to ask a separate question about an incident of direct infringement, and a separate question about mens rea requirement for inducement. That way, if the jury says that there’s a direct infringer and all limitations are met, but they don’t think the mens rea was there, the defendant cannot go forward post-verdict with a good faith belief that there’s no infringement.

      1. 8.2.1

        Recognizing it is the first step, Dennis, to dealing with it. I respect you for admitting that the bias is there.

        And I certainly do remember the Troll Tracker. I also remember your blog repeatedly referencing and linking to the more interesting Troll Tracker stories in 2007 and early 2008 (before the guy “unmasked” himself). Most of the people involved in that (including the tracker himself and his direct supervisor) are no longer at Cisco and went on to successful careers elsewhere.

      2. 8.2.2

        One of the more useful features of the torpedoed Patent Troll Tracker blog was its early detective work in exposing the real parties in interest behind the shell companies listed on patent complaints and threat letters. So here we are, many years later, with the revived Goodlatte Bill, and an amazing number of new State laws, with provisions on that same subject, wondering what that will lead to?

        1. 8.2.2.1

          That was definitely one of the big contributions of Troll Tracker, in fact how it got its namesake, was to try to track who’s behind the patent holding companies.

          Another big contribution was exposing joinder abuses in multi-defendant troll cases, and how trolls tended to sue dozens of defendants in a single suit. This was something that hadn’t been seen in the earlier era of mostly competitor-on-competitor suits. The joinder abuse created the false impression that the number of patent suits did not spike because of trolls; the “Tracker” pointed out that the proper metric was to count defendants, not cases, and that whole dialogue contributed ultimately to the joinder reform in the AIA of 2011.

          1. 8.2.2.1.1

            Lode_Runner,

            Your own bias is showing.

            First, suing dozens of defendants in one suit is not “abuse.”

            Second, there was no “exposing,” as those listed on the suit were quite public.

            Third, the comparison to competitor to competitor suits is simply not appropriate.

            Lastly, your posts remind us all who coined the term / but neglect to state why (hint: it was NOT for the benefit “of the people” or consumers or anyone else except Big Corp). It is more than just a little bit of fantasy to try to wrap the pejorative in robes of golden intentions.

            1. 8.2.2.1.1.1

              First, suing dozens of defendants in one suit is not “abuse.”

              That would depend on the patent being asserted. In practice, it’s “abuse multipled” or “abuse on crack.”

              your posts remind us all who coined the term / but neglect to state why (hint: it was NOT for the benefit “of the people” or consumers or anyone else except Big Corp

              It was to benefit people who are targeted by patent trolls.

              But more importantly, it’ doesn’t matter who invented it the term. It’s a great term. It’s descriptive. It’s accurate. It’s easy to remember.

              And that’s what bugs you so much about it.

              1. 8.2.2.1.1.1.1

                More goal post moving from Malcolm…

                First, the point is strictly about the ability and propiety of multiple defendant joinder. Your attempt at dust kicking has NOTHING to do with that point.

                So NO – your “feelings” as to the merits of any particular case do NOT dictate whether joinder in the first instance is abusive.

                That’s just more of your typical POOR ad hominem rhetoric.

                As to your “benefitted those people who are targeted” – your dichotomy is again showing as you are eagerly being the foot soldier of the 1%’ers in your dogmatic quest against a form of innovation most available to the common man.

                You keep on missing that simple point.

                And what “bugs so much” is not any sense of veracity of the term – quite in fact it is the opposite – it is the blatant duplicity you continue to exhibit in your rhetoric.

            2. 8.2.2.1.1.2

              Suing multiple defendants in a single suit _IS_ abuse, anon, where the defendants’ products are different and were independently developed. It was a borderline Due Process violation because it eliminated the ability of each defendant to put on an individuated non-infringement defense. Courts place limits on all kinds of things, like number of experts, trial time, etc., and made its applicable to each “side,” forcing the defendants to fight over the ability to present their defenses.

              That’s why Congress passed a law specifically prohibiting multi-defendant joinder in the majority of patent cases. And that’s why even before the AIA, most district courts outside E.D. Texas wouldn’t tolerate it and the Federal Circuit tried to eliminate it for pre-AIA cases. You’d have to be ignoring all sense of reality not to recognize it as “abuse.”

              > Lastly, your posts remind us all who coined the term

              I am not sure what you mean. The “Troll Tracker” did not coin the term “troll,” anon. The name originated with Peter Detkin and his wife while he was at Intel and who, ironically, later co-founded Intellectual Ventures.

              Even before “troll,” other terms were used. Bill Gates used to refer to NPEs as “patent terrorists,” but in a post 9/11 world, that label took on additional meaning that wasn’t warranted.

              1. 8.2.2.1.1.2.1

                My dear Lode_Runner,

                You are wack.

                Perhaps you missed this advice: “Recognizing it (your bias) is the first step,[ ], to dealing with it.

                I [will] respect you for admitting that the bias is there.

                To wit, joinder is NOT abuse – even if you don’t like it (happens all the time, even, by the rules of the court, even). Also, your quaint insertion of “independently developed” is simply meaningless, as I am sure that you are aware that independent invention is NOT a defense to infringement.

                Um, you are aware of that, right?

                As to “That’s why Congress passed a law specifically prohibiting multi-defendant joinder in the majority of patent cases. And that’s why even before the AIA, most district courts outside E.D. Texas wouldn’t tolerate it and the Federal Circuit tried to eliminate it for pre-AIA cases.,” well, that’s just pretty Pollyanna of you to not recognize the Infringer’s Rights lobby’s fingerprints, eh?

                As to my comment about reminding and the coinage of the term, you are too literal, as the point was not who exactly, but why – the same why that colors your bias.

                You just haven’t made me proud yet by realizing your bias and taking that first step.

                You do realize that from the very very beginning the alienability of property that is the patent (thus the very enabling of NPEs) is a foundational aspect of the US patent system, right?

                It really doesn’t matter what Mr. Gates thinks about that.

        2. 8.2.2.2

          wondering what that will lead to?

          It’s going to lead to more reform is what it’s gong to lead to.

          That’s why these people are scared shirtless.

          1. 8.2.2.2.1

            Your spin of “scared” is a misrepresentation of what others are trying to tell you.

            I suggest that you listen more and spin less.

      3. 8.2.3

        Hi Dennis. I had not thought about the Patent Troll Tracker until just the other day when one of the most notorious Trolls he Tracked was mentioned on these pages for having gotten a rather large fee award ($2-$5 million) decided against him (and his firm) for misconduct.

  12. 7

    Here’s a hypothetical.

    The PTO issues an incredibly broad patent everyone can see is invalid after two seconds of analysis. Among other actions, it’s infringed by using a mouse to order a book “relating to aerobic exercise” on an Internet page where the Internet page includes the color yellow, a polygon and at least one hyperlink. [I know it would be shocking — truly shocking! — if such a claim were granted by the PTO but bear with me, please].

    Among many other companies who provide such websites, I am immediately aware of the patent. We all have a big laugh over it.

    Patentee calls me up and tells me that I’m guilty of “inducing infringement” by consumers and he’s entitled to some portion of my book sales. What words do I use to respond to the patentee? What do I tell the patentee when he starts mumbling about “presumption of validity”?

    This is our broken system. It’s off the rails. It’s starting to get fixed but we have a long ways to go. And now some tiny group of self-interested patent owners that couldn’t figure out how to write a valuable patent claim that would be directly infringed wants to expand liability so they can sue more deep-pockets? Now? Nobody could have predicted.

    Seems like a really, really bad idea at least until we expunge the system of the lowest forms of innovation and get back to the basics again.

    Or we can just break it further, let the usual suspects in the 1% bracket fill their pockets with still more cash, and hit the restart button a few years later. That will accomplish nothing except for the cash transfer, of course. The whining will be just as loud if not louder.

    1. 7.1

      That hypothetical doesn’t really apply to this situation, because if the claim is that clearly invalid, then you would be able to prove it in court. If Cisco had proved the claims at suit to be invalid, we wouldn’t even be having this discussion.

      1. 7.1.1

        if the claim is that clearly invalid, then you would be able to prove it in court.

        Really? If that’s the case, then why is the patentee continuing to harass and threaten me with a lawsuit even after I explain to him why his patent is plainly a pile of junk that no court will uphold? He keeps mumbling about his “presumption of validity” and throwing numbers around about how much it’s going to cost me to prove obviousness in court and how long it’s going to take and I’ll be liable for damages for the entire time it takes for him to win because “willful”. And that doesn’t include the legal fees and the costs of the trips to Texas.

        If Cisco had proved the claims at suit to be invalid, we wouldn’t even be having this discussion.

        Right. Sometimes lower courts find the asserted claim to be valid, even where the claims are completely off-the-charts ridiculous and the ultimate result is guaranteed (e.g., Prometheus v. Mayo).

        The “situation” is what do we expect of a member of the public who is not directly infringing when that member is presented with a granted patent that appears, upon inspection and analysis, to have been granted improvidently. I’ve already done the inspection and analysis, thereby demonstrating serious respect for the system.

        So let’s say the patent covers something that my clients do when interacting with my database (and the databases of a lot of other people). I’m certain that the patent is invalid and I can articulate why but who knows what some jury is going to say after the plaintiff’s expert gets in there and kicks up ten thousand pounds of dust. Do I really need to unplug my computer and risk damages for the years that the lawsuit will take when I’ve got a reasonable belief that the patent is invalid? I’m not even directly infringing! Why do I have to risk the intervening damages? Why not let the patentee with its weak patent take that risk? It has the option of sueing the direct infringers if it really needs all that money on the table before it can justify bringing the lawsuit.

        Remember, the patent I’m talking about has no resemblance to, say, the typical statute passed by Congress. It’s just another patent that looks to me — and most (but not all) people — like total junk that was granted improvidently. This isn’t “the income tax” or “law against willfully stockpiling hand grenades” we’re talking about.

      1. 7.2.1

        Ned: the issue here becomes important only if the patent is held valid.

        I understand that, if Cisco’s argument wins, the question as to whether a defendant held a reasonable belief about invalidity is only relevant to the damages calculation if the patent is valid.

        But all the possible outcomes will become part of the calculus that patentees and potential (or real) infringers take into account when choosing what actions to take (or not). In other words, the law (whatever it happens to be) is “important”.

        Hmm. Maybe a website that “automatically” calculates these probabilities based on the latest data on court outcomes and damages would be useful. It could “automatically” provide the most similar case profiles based on answers to a set of survey quetions. Oops, I just innovated again!

  13. 6

    For Fictional Friday Fun:

    How about a story about a lawyer who committed a crime, in particular conspired in the commission of that crime (analogous to inducement?) knowing the act was against the law but believing that the law was unconstitutional and that the act should squarely be within his right under the constitution… he need only to have his opportunity in court to “invalidate” or overturn the law and it would surely be done.

    Cut to a courtroom scene where our protagonist-villain (anti-hero) lawyer then steps up to argue in court that mens rea was not shown because at the time he had not as of yet tried (and lost) his constitutional argument, and the recent ruling by the court affirming the constitutionality of the law is irrelevant to the state of his mind.. a “non-guilty” mind at the time of the “conspiracy”…

    what shall the verdict be?

    Frivolous, foolish, Friday fluff. I know. Have a good weekend all.

    1. 6.1

      Interesting. It inspired me to look into whether this has ever been brought up by “sovereign citizen” tax dodgers brought up on willful tax evasion charges.

      And it turns out that it has, Cheek v. US, 498 U.S. 192 (1991). The Supremes said that an argument concerning the unconstitutionality of the income tax laws was not relevant to the issue of willfulness. One interesting quote:

      “Claims that some of the provisions of the tax code are unconstitutional are submissions of a different order. They do not arise from innocent mistakes caused by the complexity of the Internal Revenue Code. Rather, they reveal full knowledge of the provisions at issue and a studied conclusion, however wrong, that those provisions are invalid and unenforceable.” (Id. at 205)

  14. 5

    “I suspect that the hundred-billion-dollar company’s attempt to play the victim here will be unsuccessful.”
    This highlights a problem with all the analysis in this and other issues: Commentary and policy is focused on the few spectacular battles between “hundred billion dollar companies.” Those cases make the news, but run-of-the-mill cases are more common and present substantial burdens on smaller companies.
    For the more typical patent defendant, these policies tend to present substantial obstacles to legitimate business that must contend with numerous specious patents. I don’t see how a crowd that so often complains about patent quality can present a consistent argument against Cisco’s position that potential inducement defendants must respect patents of dubious quality.
    Also, given the case law supporting the axiom that you cannot infringe an invalid patent, Cisco’s position seems unassailable. Commil argues for a change in the case law, but it seems unfair to change that law in the middle of litigation. That is a point that does not come out in Cisco’s brief. Wouldn’t they have had a stronger argument that says “We depended on your case law that says we can’t infringe an invalid claim, and we thought the claim was invalid for good reason, so we had not intent to induce infringement. If you want to change the law, fine, but you cannot say we intended to induce infringement based on your new law.”

    1. 5.1

      The presumption of validity – by law (and not new law) – rather rains on your parade KDC.

      Let me guess, you do not have clients that you help enforce their patent rights for…

      1. 5.1.1

        The presumption of validity – by law (and not new law) – rather rains on your parade

        No, it certainly doesn’t or the case wouldn’t be before the Supreme Court. The only meaning of the so-called “presumption” is to put the burden of proving invalidity on the infringer.

        That’s it. Anyone who “presumes” (using the ordinary meaning of the term) that a typical PTO patent in the so-called “computer arts” is a valid patent is, objectively, out to lunch. On Venus.

        The issue here is inducement and we already know from the Supreme Court that a certain mens rea is required. The issue here is whether a reasonable belief in the invalidity of the patent is inconsistent with that required mens rea.

        1. 5.1.1.1

          Quite clearly, you are off, Malcolm.

          The presumption exists until it is defeated. After you defeat the presumption, then – and only then – can you act like it is not there.

          See the analogous comment by Anon2 at post 6.

          1. 5.1.1.1.1

            After you defeat the presumption, then – and only then – can you act like it is not there.

            I’m looking at a patent. I have a reasonable belief that it’s invalid (in fact, I’m 100% sure of it). I just practiced the steps in the claim.

            The patent is still “presumed valid.” I didn’t defeat the “presumption”. But I just acted like it wasn’t there.

            So you’re wrong.

            Maybe you meant to say something else. Feel free to try again.

            1. 5.1.1.1.1.1

              Even as you “play” at attorney, you should recognize that your actions have NOT dispelled the presumption and – without more on your part – you have incurred a very real liability of action against you.

              You really should try a little harder to portray your “knowledge” of law when you delve into your curse-ades. You do a disservice to those that think you know something about the law when you are clearly so error prone.

              1. 5.1.1.1.1.1.1

                you have incurred a very real liability of action against you.

                Right. The patentee can sue me with their garbage patent and there is an incredibly slim chance of them winning and an even slimmer chance of a finding of willful infringement.

                The question before the Supreme Court is exactly what is the “very real liability” in the case where I’m not a direct infringer and I have a reasonable belief that the patent is invalid and it turns out that my reasonable belief was not shared by 60% of judges on appeal but the other 40% is flabbergasted and dismayed. What is my “real liability” in that case?

                1. Your reply misses the point that your “reasonable” evaluation outside of court does not change (at all) the legal presumption of validity of the granted patent.

                  Less spin, Malcolm, less obfuscation from you and more addressing the actual points of law is needed in this discussion.

      2. 5.1.2

        You may seeing something I am missing. If that presumption does not rain on the reasonable belief defense to willfulness, why would it rain on the reasonable belief defense to inducement? The both rely on disrespecting the presumption.

        1. 5.1.2.1

          Willfulness and inducement are clearly different concepts.

          You assume the conclusion by thinking that they must be treated the same.

          1. 5.1.2.1.1

            I don’t think they must be treated the same; I only suggest that there is no impediment to treating them the same, given that we are already comfortable with the tension between the presumption of invalidity and the reasonable belief defense to willfulness. I don’t see how you nix the reasonable belief defense to inducement while leaving it intact for willfulness.

            1. 5.1.2.1.1.1

              You only “suggest” to assume the conclusion you want to reach.

              Re-read my reply – it still fits what you are doing (or at least attempting to do).

              1. 5.1.2.1.1.1.1

                But I was seeking something more informative: Your reasoning as to why the presumption of validity prevents a reasonable belief defense for inducement, and if that also holds to negate the defense for willfulness, and if not, why the difference.
                Supposing I prefer to preserve the defense (I lean that way), that would not be a good idea if there were some impediment. You imply there is an impediment. What is it?

                1. I “imply” exactly what I said: you are assuming the conclusion you want to reach and you are treating the two the same.

                  They are not.
                  You do not get to do so.

                  I owe you no further explanation.
                  At all.

    2. 5.2

      A look at the long list of expensive attorney names on the successful Cisco Cert petition and this Sup. Ct. brief gives one a good clue as to why most Sup. Ct. patent law is being made by very large companies, as you note. They can financially justify spending even more than the amount of damages at stake in any one suit on appealing on a generic legal issue because of their exposures in many other patent suits.

      1. 5.2.1

        Paul: [very large companies] can financially justify spending even more than the amount of damages at stake in any one suit on appealing on a generic legal issue because of their exposures in many other patent suits.

        At the same time, many of these very large tech companies are compromised by their own bloated patent portfolios and go out of their way to avoid making the most straightforward arguments for fear that the outcome will bleed into their own IP.

        Perhaps people are beginning to learn that many aspect of our broken patent system has been warped around the wills of self-interested patent attorneys (especially so-called “experts” — shall I name some?) and has little or nothing do with promoting progress in non-legal business or any other productive endeavor.

        1. 5.2.1.1

          or any other productive endeavor.

          …because everyone knows that there is no software in any innovations in these “other productive endeavors”…

          Um, no, what? Wait…

          1. 5.2.1.1.1

            everyone knows that there is no software in any innovations in these “other productive endeavors”…

            Please put your words in someone else’s mouth.

            Thanks.

            1. 5.2.1.1.1.1

              Use your own words then: is there software in these “other productive endeavors?” And are you not on record as saying that software ENTIRELY and de facto deserves no patent protection?

              Connect the dots Malcolm – it is easy if you try.

      2. 5.2.2

        Paul, I believe Commil was the petitioner. Cisco won at the Federal Circuit.

        I also agree that firms litigate important issues of law far beyond the amount in controversy for the reasons you state. This is why this should be taken into account in the Goodlatte bill.

  15. 3

    Can one be induced to trespass?

    Is not such a better model?

    For offenses themselves that are strict liability, should not the inducement follow the same model?

      1. 3.1.1

        From the previous Commil thread:

        patentlyo.com/patent/2015/02/opening-escaping-inducement.html#comment-275866

        And same thread, series starting with comment 275789.

      2. 3.1.2

        “Letters patent” comes from literae patentes, which means “letters which lie open.” The point being they were decrees on scrolls made by the King, which His subjects ignored at their peril. That same concept underlies the general principle that ignorance of the law is no excuse. Our patent laws evolved from these beginnings, and nothing in the 1952 Act changed it. To claim ignorance of something that is “patent” patentes is therefore a contradiction in terms. Aro II and Global Tech are both incorrect.

        Also, the Supreme Court has often criticized the patent bar for ignoring the general law in favor of special patent law rules. In this case, it seems, the Supreme Court is guilty of that same error.

    1. 3.2

      Anon,

      “Can one be induced to trespass?”

      In a manner of speaking, yes. For example, if a “No Trespassing” sign is not sufficiently visible/legible, notice of forbidden entry is lacking, and criminal liability is not generally incurred. (Varies by jurisdiction, of course.)

      Of course, we know you’re vehemently opposed to any discussion of so-called “innocent infringers” or “infringer’s rights”.

      1. 3.2.1

        I am NOT opposed to “any discussion” as much as I am opposed to any extra-legal insertion.

        There is a huge difference. If you want to discuss changing the law to weaken patents and make infringer’s rights stronger (and not play the typical games that are so often played by those wanting to insert infringer’s rights as if they were already law), then we can have a proper discussion.

        But if you want to play “spin-spin-spin,” well, that will probably not work out too well for you (as has been shown many many many times).

        1. 3.2.1.2

          changing the law to weaken patents

          In this case, it’s more like weakening the ability of applicants and patentees to obtain/monetize invalid patents.

          Does that affect all patent applicants to a degree? You bet it does.

          Could you and your cohorts who sat by and railed mindlessly against every reasonable effort to rein in the patent insanity that continues to dominate our broken patent system have behaved differently over the years and avoided some of that bleedover? You bet you could have.

          But you didn’t. And we all know why.

    1. 2.1

      Aren’t they not due until later? I would be surprised if people filed now, without seeing Cisco’s arguments.

  16. 1

    This seems like the wrong approach here by Cisco. The better approach would’ve been to say, like the panel said, that evidence of a good-faith belief of invalidity is relevant in determining mens rea for inducement. Cisco is asking for far too much here and they will lose. Then again, this case is premised on the Federal Circuit dissent, both parties and the Solicitor General overreaching on what the Federal Circuit’s majority opinion said.

    1. 1.1

      If you read the brief, Cisco does include the ‘relevant’ language in its argument.

      However, I guess that I fail to understand the distinction unless you are suggesting that a reasonable-belief-of-invalidity is relevant to the issue but is never sufficient.

Comments are closed.