by Dennis Crouch
In Commil v. Cisco (Supreme Court 2015), the Supreme Court has held:
A defendant’s “belief” that a patent is invalid does not serve as a defense to charges of inducing infringement of the patent. “The scienter element for induced infringement concerns infringement; that is a different issue than validity.” Of course, if the patent is proven invalid then no liability attaches. Thus, the defense here had asked for a holding that a good-faith-but-incorrect-belief of invalidity serve as a defense.
In what appears to me again as dicta (though powerful dicta), the court also indicated its agreement with the Federal Circuit that inducement requires proof that the accused both (1) knows of the patent-in-suit and (2) knows that the actions induced constitute patent infringement. Although the court initially wrote that this issue “is not in question here,” it then went-on to explain how Global-Tech should be read to require knowledge-of-infringement as a prerequisite to induced infringement liability. “Global-Tech requires . . . proof the defendant knew the acts were infringing. And the Court’s opinion was clear in rejecting any lesser mental state as the standard.”
The court had been encouraged to allow belief-of-invalidity as a defense in order to help stifle “abusive patent assertion.” In a several paragraph statement of dicta, the court explained that it understands the potential problem of frivolous actions, but that district courts are have the tools of addressing the problem. One tool, for instance, is that of sanctioning attorneys through Rule 11 and awarding fees under Section 285. “These safeguards, combined with the avenues that accused inducers have to obtain rulings on the validity of patents, militate in favor of maintaining the separation expressed throughout the Patent Act between infringement and validity.”
All members of the court agreed with notion that inducement does require knowledge of the infringing nature of the accused acts. Justice Scalia joined by Chief Justice Roberts argued in dissent that a would-be defendant who (in good faith but wrongly) figures out that a patent is invalid (though without actually invalidating the patent) should be free to act without concerns regarding inducement. Interesting, the pair note that the majority opinion “increases the in terrorem power of patent trolls.”
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This is a split decision for patentees. On the one hand, it pushes away an entire set of defenses to inducement. But, on the other hand, the court solidifies a high wall by requiring proof that an accused inducer have known that the induced acts would constitute infringement of the asserted patent claims. In my view, this requires at least a limitation-by-limitation claim chart or an admission.