by Dennis Crouch
Today, the Supreme Court heard oral arguments in the pending patent dispute Commil v. Cisco, Case No. 13-896. The Patent Act creates a cause of action for actively inducing infringement of a patent. Here, the Federal Circuit ruled that a defendant’s belief that a patent is invalid is a defense to induced infringement under 35 U.S.C. § 271(b). That decision is being challenged here — The patentee (Commil) argues that the mens rea requirement for inducement focuses on infringement rather than validity. The transcript is an interesting read.
Of course, invalidity of the patent is always a defense and so the issue is only critical if the defendant had a good faith belief of invalidity but the patent turned out to be valid.
JUSTICE GINSBURG: This question would come up only if the patent had been held valid.
The rule does, however, offer some additional procedural and evidentiary benefits – for example a good faith belief of invalidity should be easier to prove than invalidity itself. By taking the case, the Supreme Court suggests reversal, however, that result is not guaranteed here.
In his questioning, Justice Scalia focused on the idea that aiding and abetting requires wrongful intent, and practicing an invention covered by an invalid patent doesn’t seem wrong.
JUSTICE SCALIA: It’s a type of aiding and abetting liability and both in tort law and in criminal law. At the common law, it was clear that you’re not liable as an aider and abetter unless you have a wrongful intent. . . . It it seems to me that if you don’t know that you’re infringing or that you’re encouraging somebody to infringe is is no no worse than you’re not knowing that the patent is valid. . . . You’re just talking about supplemental liability for somebody who induced that violation. And generally, for that kind of liability, we have required mens rea. We have required knowledge that you’re doing something wrong.
The patentee’s response was threefold:
MR. WERBNER: Well, under the court’s Aro 2 case that the Court described in GlobalTech’s as a fixture of patent law, the Court specifically there recognized that once an accused infringer received actual notice of the patent and is put on notice of the infringing conduct, that that [invalidity belief] that creates no defense to that person. . . . [Second], there are [now] streamlined procedures available [for invalidating invalid patents]. . . . [Third] textual meaning of 271(b) [focuses on infringement not invalidity and] Congress knows the difference between invalidity and infringement. Where Congress is addressing both, it says both.
Arguing for Cisco, Seth Waxman’s primary point fell in line with Justice Scalia’s statements:
MR. WAXMAN: If you go back to the common law . . . [a] defense was available [for] someone who didn’t have that belief was not culpable and, “morally wrong.”
Justice Sotomayor queried whether infringement and invalidity were really two sides of the same coin since a broadly interpreted patent is likely to be invalid while a narrowly interpreted patent is likely to be not infringed.
A good amount of time was focused on the court considering how to deal with the reality that a large percentage of challenged patents are held invalid.
CHIEF JUSTICE ROBERTS: You mentioned the presumption of validity. What percentage of patents that are challenged are found to be valid.
MR. WERBNER: Well, Your Honor, from the briefing, it appears a high number; 40 percent was an estimate.
CHIEF JUSTICE ROBERTS: Well, 40 percent of the patents are found to be valid?Invalid.
MR. WERBNER: Invalid.
CHIEF JUSTICE ROBERTS: Invalid. So only 60 percent are upheld. That’s not much of a presumption of validity.
MR. WERBNER: Mr. Chief Justice, I would submit that it would be for Congress to change the presumption of validity, if it’s out of line. . . . And it’s more than just a procedural mechanism, it’s a message that patents are presumed valued. They should be respected not just by judges and juries, but by the public who are told that until proven otherwise, patents are presumed valid. And someone who wishes to gamble on their belief that it’s invalid should bear the consequences if they’re wrong. . . .
JUSTICE KAGAN: You’re quite right in your reply brief when you say that this is a tradition in American law, that we assume that statutes are constitutional, that we assume that contracts are valid, that’s right, but it’s because they really are. You know, almost all statutes are constitutional. And here we’re in a different universe entirely, aren’t we? Where, you know, you could flip a coin as to whether a patent is valid or invalid and be pretty close, right? It’s about 50/50. . . .
CHIEF JUSTICE ROBERTS: Is that a is that an historical development? Did more of them used to be valid, however many decades ago and, it’s sort of changed recently?
MS. ANDERS (US Gov’t): I think it makes sense to say that a good faith belief in invalidity is not a defense even though 40 percent of patents may be invalid.
. . .
JUSTICE KAGAN: Well, but that might be a very good reason for Congress to take a new look at this presumption of validity. But [Cisco’s] problem is that this presumption of validity exists and that this question of validity functions in a patent suit only as an affirmative defense.