Unwired Planet v. Apple: Fault and Patent Infringement

By Jason Rantanen

Unwired Planet, LLC v. Apple Inc. (Fed. Cir. July 22, 2016) Download Unwired Planet
Panel: Moore (author), Bryson, Reyna

Last week, the Federal Circuit issued two opinions, both written by Judge Moore, dealing with what I refer to as “fault” in patent law: the degree of culpability the accused infringer possessed with respect to the issue of patent infringement.*  Although the cases involve different legal doctrines–WBIP v. Kohler involves willful infringement under § 284 and Unwired Planet involves inducement of infringement under § 271(b)–both present that core question of fault.  This post will focus on the issue of fault in the context of Unwired Planet, although its observations about fault are relevant to issues of culpability in the context of enhanced damages determinations.  I’ll focus on the specific issues raised by WBIP in a future post.

*While some folks prefer the terms “scienter,” “mens rea,” or “mental state,” I tend to use  “fault” because patent infringement primarily involves businesses not humans, and businesses don’t really have minds. In addition, the idea of “fault” captures standards (such as strict liability and negligence) that do not really have mental state components.  Terminology matters less than what’s actually going on in the analyses in these opinions, though, so substitute your preferred term as desired.

Unwired Planet v. Apple involved inducement of infringement under 35 U.S.C. § 271(b).  In Global-Tech v. SEB, and reaffirmed in Commil v. Cisco, the Supreme Court held that inducement requires knowledge or willful blindness to the fact that the relevant acts constitute infringement of a patent.  563 U.S. 754, 766 (2011); 135 S.Ct. 1920, 1926 (2015).

Among other subjects raised on appeal, Unwired challenged the district judge’s grant of summary judgment against its § 271(b) inducement of infringement claim.  The district court based its decision on the ground “that no reasonable juror could conclude that Apple was willfully blind because of ‘the strength of Apple’s noninfringement argument.'”  Slip Op. at 18.  On appeal, the Federal Circuit vacated the grant of summary judgment because the “objective strength” of Apple’s position was insufficient to avoid liability for inducement:

Because the district court’s grant of summary judgment was based exclusively on its view of the strength of Apple’s non-infringement argument, we vacate. The Supreme Court’s Global-Tech Appliances and Commil decisions require a showing of the accused infringer’s subjective knowledge as to the underlying direct infringement. The district court’s reliance on the objective strength of Apple’s non-infringement arguments as precluding a finding of induced or contributory infringement was erroneous.

On its face, this statement in Unwired Planet seems inconsistent with the court’s recent holding in Warsaw Orthopedic, an opinion that Dennis wrote about last month.  In Warsaw Orthopedic the Federal Circuit held that the objective unreasonableness of the accused infringer’s position, together with its knowledge of the patents, was a sufficient basis for a jury to conclude that the accused had knowledge of or was willfully blind to the fact that it infringed the patents-in-suit.  See 2016 WL 3124704, *3, *5 (“[H]ere we conclude that there was substantial evidence that MSD’s infringement position was objectively unreasonable and that the jury, based on this evidence, could reasonably have concluded that MSD had knowledge (or was willfully blind to the fact) that it was infringing”).  In other words, while the objective reasonableness of the accused infringer’s position is insufficient to avoid a finding of willful blindness, the objective unreasonableness of the accused infringer’s position is sufficient for a finding of knowledge or willful blindness.

Adding to the potential confusion is an observation that Judge Reyna made in his concurrence in Warsaw Orthopedic: that “the Supreme Court in Commil stated that a defendant lacks the intent for induced infringement where his reading of the claims is both different from the plaintiff’s and reasonable.”  2016 WL 3124704, *6 (the concurrence does not provide a pin cite for this statement, but he’s presumably referencing 135 S.Ct. 1920, 1928 (“In other words, even if the defendant reads the patent’s claims differently from the plaintiff, and that reading is reasonable, he would still be liable because he knew the acts might infringe. Global–Tech requires more.”)).  Although Judge Reyna was making the point that he would resolve the appeal on the ground that the accused infringer had not presented its claim construction to the court, his reading of Commil nevertheless reinforces the idea that a reasonable claim construction would be sufficient to avoid a finding of inducement liability–a conclusion at odds with the Federal Circuit’s statement in Unwired that “the objective strength of Apple’s non-infringement arguments” cannot preclude a finding of induced infringement.

Timing matters: These statements are not as irreconcilable as they seem, however. The critical missing aspect is that of timing.  As the Federal Circuit observed in WBIP, “timing does matter,” Slip Op. at 35 (emphasis in original), a point made in Halo v. Pulse, 136 S.Ct. 1923, 1933, and repeatedly emphasized by Timothy Holbrook in his scholarship and amicus briefing.   Patent infringement almost never consists of just a single act.  Instead, it typically consists of a multitude of acts performed over months or years: the individual acts of making, using, selling, and offering for sale of the patented invention.  Mental states can change and evolve over this time.  Perhaps during early periods, the accused infringer is entirely unaware of the patents-in-suit; later on, it becomes aware and begins to have thoughts about them; still later it is embroiled in litigation and develops sophisticated legal arguments.

Viewed in this light, the court’s holdings in Warsaw and Apple are easily reconciled.  In Warsaw, the court was simply saying that relying on an noninfringement position that is objectively unreasonable allows for a jury to find that the accused possessed the requisite fault.  This makes sense, as a noninfringement position that is objectively unreasonable cannot foreclose a finding of fault regardless of whether that unreasonable position was developed before infringement began or later on during litigation.

On the other hand, the flip is not necessarily true.  Just because an accused infringer develops a reasonable non-infringement position during litigation does not mean that it had a reasonable noninfringement position earlier on.  Logic would indicate, though, that if it had a reasonable noninfringement position earlier on, then it would not possess the requisite degree of fault at that time, given the passage in Commil v. Cisco referenced by Judge Reyna.

The Nature of the Determination of Fault: Wrapped up with the issue of timing is that of the actual determination of knowledge or willful blindness.  It is the patent owner’s burden to prove that the accused infringer possessed the necessary degree of fault, not the accused infringer’s burden to prove that it did not.  “The doctrine of willful blindness requires the patentee to show not only that the accused subjectively believed that there was a high risk of infringement, but also that the accused took deliberate actions to avoid confirming infringement.”  Unwired, Slip Op. at 19.  On this basis, the Federal Circuit observed, Apple might be able to prevail on summary judgment on remand.  When coupled with the reality of temporally evolving mental states, this requirement poses an interesting challenge: the patentee must make out a plausible case for fault at the relevant points in time.  The objective reasonableness of the infringer’s legal position would seem to be relevant to this determination, but the existence of an objectively reasonable legal position at one point in time does not necessarily mean that it applies to other periods of time.  Furthermore, as Prof. Holbrook has observed, the issue of reasonableness falls out once the court issues its ruling on the “correctness” of the position.  If the accused inducer loses on that issue, it can no longer argue that it’s position was “reasonable.”

Thanks to Dennis Crouch, Dmitry Karshtedt, Chris Seaman and Timothy Holbrook for helpful discussions relevant to this post.

37 thoughts on “Unwired Planet v. Apple: Fault and Patent Infringement

  1. 8

    I see a distinction between Unwired Planet and Warsaw Orthopedic that is not timing: Unwired Planet is an appeal to summary judgement (where the factual question of deliberately avoiding confirmation of infringement is not addressed), and Warsaw Orthopedic is an appeal to a jury verdict.

  2. 7

    From today’s opinion in KONINKLIJKE PHILIPS N.V. v. ZOLL MEDICAL CORPORATION (CAFC 2016), wherein the CAFC finds lack of “fault” and thus no contributory infringement where the defendant held a reasonable — albeit incorrect — belief about the scope of the claims:

    Zoll argues that its good faith belief in noninfringement negates the knowledge requirement, pointing to its arguments against the direct infringement verdicts discussed supra at 20–29. For the claims of the ’454 waveform patent and the ’905 waveform patent, we find that Zoll’s belief in non-infringement, based on its
    reasonable claim construction argument, does negate the knowledge requirement of contributory infringement. The Supreme Court has explained that if an accused infringer “reads the patent’s claims differently from the plaintiff,” and if “that reading is reasonable,” then the accused infringer should not be liable for indirect infringement Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920, 1928 (2015). While we ultimately concluded that Zoll’s claim construction argument against the jury’s direct infringement verdict for the waveform claims was incorrect, see supra at 21–23, that argument was based on a reasonable interpretation of the claims in light of the specification and the prosecution history. Because this belief in non-infringement was reasonable, it is a sufficient basis on which to ground the jury’s implicit finding of insufficient knowledge for contributory infringement.

    LOURIE, DYK, and HUGHES on the panel; no dissent

    1. 7.1

      MM, now that was past damages. That does not apply on a going-forward basis does it not?

      In such a case, what is the proper remedy, if any?

      1. 7.1.1

        In such a case, what is the proper remedy

        You mean what is the proper remedy for instances of infringement after it’s been determined that the infringer infringes? Damages and sanctions for willfulness, and additional sanctions for contempt. The extent of penalties would depend on the facts.

        What are your views?

        1. 7.1.1.1

          MM, pretty much the same. I would move the court for an injunction forbidding future sales of the items found not to be infringing solely because they once had a reasonable position on infringement.

          Ned

    1. 5.1

      Not so easy, is it Prof. Rantanen?

      Nearly every post from Malcolm is dripping with the type of thing that you have twice removed hear (and at least as many times need to remove).

      Your very next thread (the “The Inter Partes Review” thread) is also replete with this very same “style” of empty name-calling attacks – not on any content or idea posted, but on the poster presenting the content or idea.

      I would posit that as the mere “occasional” editing is NOT going to achieve your rule, that either your rule effectively does NOT exist, or you are going to have to take some other measure to make sure that your rule is enforced.

      I have long made it clear that I am perfectly willing to abide by ANY set of rules that I see consistently and uniformly enforced.

      The problem, your problem, remains exactly what I personally told Prof. Crouch nearly five years ago now. THAT problem has been factually documented to have NOT changed for a full decade.

      Your move.

      Make it one that effectively matters.

  3. 4

    Anon – usually I can understand your points (and why you hold them, etc.).

    But, are you saying that every single “objective reasonableness” test in the whole of the legal universe cannot be “objectively reasonable” until a judge says it is so (because that messes with the time relationship status for most tests, i.e., self-defense must be subjectively believed and objectively reasonable to believe that the self-defense was required) ….

    Or, are you merely implying that it is foolish for an interested party to try and generate an “objective” opinion about something because there is, almost always, a bias that will slant the opinion in some way?

    To which, I say: yes, but you can pay an attorney to be a d*ck to you.

    1. 4.1

      alex s,

      Compare:
      “Until a judge says it is”

      with

      an interested party says it is”

    2. 4.2

      Notice, “alex s”, that “anon” did not even try to answer the question you asked. Surprise!

      “anon”‘s original proposition was simply wrong and his response to being called out it to kic up a bunch of dust. He’s now clinging to a proposition that is either (1) nonsensical or (2) so banal that’s impossible to understand why he’d bring it up in the first place (and with

      Of course people can have opinions that are objectively reasonable. Of course there’s many circumstances in which people can make that determination (i.e., “is this something that is objectively reasonable?”) for themselves, without a judge, or otherwise “count on” their own judgment (based on facts, including, e.g., looking stuff up in multiple sources, performing math with a calculator, and consulting third parties). Examples have already been pointed out to “anon” but rather than address them he’s slinking off into the weeds, muttering philosophical trivialities and telling us to all to just think harder (because then we’ll understand him!). As to why he’s choosing to do this, I could take an educated guess but so can you.

      Here’s his original proposition (which he both refuses to subscribe to but also he won’t admit that it’s incorrect): [U]ntil any argument has been ruled on by a court, that said argument cannot be deemed “objectively reasonable

      It’s meaningless nonsense, for the reasons already provided. Don’t waste your time trying to “understand.”

      1. 4.2.1

        Malcolm errantly quips “Notice, “alex s”, that “anon” did not even try to answer the question you asked. Surprise!

        How long ago was your law school?

        Do you not realize that the lesson learned is more powerful when the learnee connects the dots themselves?

        The “not even try” is simply wrong and continues to show only your effort to play “gotcha,” instead of you trying to understand the rather plain meaning here.

  4. 3

    Since this necessarily involves the third party, at no time prior to that judge’s decision then can the alleged infringer truly “count on” their having an argument as being dispositive of any level of “fault.”

    What does the term “truly” mean in this context? I’m trying to figure out if you’re splitting hairs or splitting an already spit hair.

    The fact that a judge is going to opine on the reasonableness of a party’s arguments doesn’t mean that the party can’t have its own opinion about its arguments (e.g., “this is airtight”, “this is a slam dunk”, “this is close call” etc). For some arguments, you might need to step outside your own shoes or ask a different third party’s opinion (i.e., someone other than the judge). For other arguments, it can be as simple as proving to yourself that you’ve calculated a number correctly — pretty sure most of us can figure that one out.

    1. 3.2

      I’m trying to figure out if you’re splitting hairs or splitting an already spit hair.

      Neither.

      The status of the argument does not – and cannot – reach the “objective” stage until a third party judges it.

      doesn’t mean that the party can’t have its own opinion about its arguments

      Of course that is correct – an, again, – necessarily – a party WILL have an opinion about its arguments.

      It is also of course given that THAT opinion will not and cannot be “objective.”

      Comment moderated and text removed: please avoid insulting language and personal sniping.

      1. 3.2.1

        The status of the argument does not – and cannot – reach the “objective” stage until a third party judges it.

        Again, I think it depends on the nature of the argument. A calculator can confirm, e.g., that one’s math is correct. Does one need to show “2+2=” to a third party before I can form an opinion about the objective truth of that result?

        Even if we accept your proposition on its face (and I don’t), I don’t see any reason why this third party needs to be the judge who hears the case. For the purpose of “counting on” the objectivity of one’s argument, the views of other third parties would seem to suffice. But that gets us back to my original question: what does “truly” mean in this context (see the quoted passage in comment 3)? It seems like some super fine hair splitting.

        1. 3.2.1.1

          Again, no it does not.

          The item to grasp is that any (and I do mean any) opinion by one of the interested parties is by definition NOT objective.

          I know that you feel differently, but your feelings do not change reality.

          1. 3.2.1.1.1

            any opinion by one of the interested parties is by definition NOT objective.

            Yes, that makes sense in some contexts, as I noted. But it’s different than your earlier proposition where you indicated that the judge in court case was necessary to provide “objectivity” (in quotes, as you used the term).

            feelings do not change reality.

            That’s nice. What you wrote initially is different and less reasonable than what you’re stating now. You don’t have to admit that.

            [Text delete by moderator. Please refrain from provocation.]

            1. 3.2.1.1.1.1

              ???

              It is no different.

              A case involves two parties with an issue and a third (neutral – objective) party.

              There is no “hard to admit” by me in any of these posts, and I have been consistent throughout.

              (Gee, let’s see if the new-fangled partial editing mode kicks in to take out Malcolm’s snide accusation of “less reasonable” when there is no difference whatsoever in what I have said (and in truth vouches for the edited out portion of my previous post)

              1. 3.2.1.1.1.1.1

                “anon” A case involves two parties with an issue and a third (neutral – objective) party.

                You seem to be really struggling with this and, yes, it’s tiresome. But I’ll walk you through the discussion again.

                The issue is whether one can have an objectively reasonable opinion about an issue (non-infringement) before a court has ruled on that issue. Initially, you stated that the answer had to be “no.” (Comment 1) I found that position ridiculous and I carefully explained why (Comment 3). Rather than rebut my explanation, you chose instead to move the goalpost (whether intentional or not) and you stated that objective reasonableness of an opinion required that some “third party judges” the opinion (3.2) and you threw out an insult (which was edited out). After I pointed out problems with that second proposition, you again disagreed and you dug your heels into the second proposition (no mention of a “court” being necessary for objective reasonableness) but made no attempt to support that proposition (which is debatable, at least as you’ve broadly stated it).

                I know you believe that you’ve been “consistent” but the objective reality — because we can all read the thread! — is that you first proposed that the “objective reasonableness” of an argument required a court ruling affirming the reasonableness, but later you proposed that a merely neutral third party would suffice (a fact that I pointed out to you in response to your first proposition).

                [Text deleted by moderator. Please refrain from provocation]

                1. I am not struggling at all – there is no objectivity in an interested party’s own opinion of its arguments.

                  You are doing that AccuseOthers meme of yours again.

                2. there is no objectivity in an interested party’s own opinion of its arguments.

                  Whether there is any objectivity would depend on the specifics of the argument, as I’ve already noted.

                  And — again — this quoted proposition is a long way off from the proposition of yours that I originally challenged. Are you standing by your original proposition (see comment 1 and 3; surely you don’t need me to re-quote that proposition back to you for the third time)? A simple yes or no will suffice. I’ll note again, for the resaons I stated earlier, that your original proposition isn’t defensible. At the very least, you’ve not been able to defend it.

                3. You keep on saying “long way off” and I keep on telling you that they are the same.

                  Not sure why you are struggling with this.

                4. You keep on saying “long way off” and I keep on telling you that they are the same.

                  Right. That’s because you have difficulty articulating your own views in a coherent manner, especially once those views have been challenged. It’s easier to simply say “I told you already” while at the same time being less and less clear about what it is that you told everyone.

                  Yes or no: is it your position that until any argument has been ruled on by a court, that said argument cannot be deemed “objectively reasonable”?

                  I think that’s an indefensible and, frankly, ridiculous position to take, and I’ve explained why. But tell everyone: is it your position? Yes or no? It should be an easy question to answer.

                5. …It cannot be deemed so – by the parties involved.

                  You really need to just read what has been posted and not be in such a hurry to play “gotcha.”

                6. Nothing “wow” about it – the parties involved are interested parties and thus not capable of having their own opinion BE objective.

                  There is nothing earth-shattering about this.

                  And yet you continue to struggle.

                  Now, Prof. Rantanten, do you see the comment you expunged DOES fit…?

                  (and still waiting for that removal of Malcolm’s snide comments to kick in…)

                7. the parties involved are interested parties and thus not capable of having their own opinion BE objective.

                  Except that’s just your subjective opinion. I think 2+2=4 but there’s nothing objectively reasonable about that either. After all, I could be dreaming this entire conversation and wake up to find out I’m actually in a different universe where 2+2=5. There’s no way to know!

                  Deep, deep stuff here. Very serious!

                8. Malcolm’s threadbare meme of “deep stuff here. Very serious! is personal sniping and adds nothing to the dialogue.

                  Malcolm, your “argument” falters because you apparently want tot treat facts as if those facts were your argument. That is just not so. Facts are NOT an argument. Facts can support your argument (or as here – NOT support your argument). Facts will either be contested (for a number of reasons, including not being germane or even misrepresented) or they will be stipulated to. NONE of which changes the status of the argument itself as being “objective” or not. And certainly cannot be dispositive about one own’s opinion about one’s argument.

  5. 2

    In other words, your “flip and logic” logic itself suffers from error. There is not a symmetry present that you are assuming to be there.

  6. 1

    The objective reasonableness of the infringer’s legal position would seem to be relevant to this determination, but the existence of an objectively reasonable legal position at one point in time does not necessarily mean that it applies to other periods of time.

    I would posit that until any argument has been ruled on by a court, that said argument cannot be deemed “objectively reasonable,” and remains merely an argument (and one made by an obviously interested party and contested by an equally – and oppositely – interested party; which makes for the requirement of the neutral judge to determine the level of any final state of being “objective.”

    Since this necessarily involves the third party, at no time prior to that judge’s decision then can the alleged infringer truly “count on” their having an argument as being dispositive of any level of “fault.”

    1. 1.1

      I think you have this backwards. A court can certainly decide that an argument is NOT “objectively reasonable”, but until that happens, logic and our legal system deem the argument objectively reasonable.

      Determining and demonstrating the objective reasonability of an opinion is something every people manager and project manager has had to come to grips with at some time or another. If an obviously interested party cannot be objective, there are certainly consultants who are willing to review the issue and provide a third party perspective. It is essential for both legal and business reasons to understand objective reality. Continuing to act contrary to objective reality is stupid in business and sanctionable in court.

      1. 1.1.1

        You are missing the point mike that in a contested battle, the one side may feel that they are “objective” every bit as much as the other side feels that they are NOT “objective.”

        When one is one of the interested parties, YOUR view cannot serve as a truly neutral “objective” view. This too is where Reyna is 180 opposite of what the Court said.

        It is then less that at the court decision time that an argument “falls out” and more that an argument achieves the status (or not) of being deemed “objective.”

        They is NO presumption that one side – or the other – has THE “objective” viewpoint. This is not to be confused with the fact that a patent IS presumed to be valid.

        1. 1.1.1.1

          When one is one of the interested parties, YOUR view cannot serve as a truly neutral “objective” view.

          Again: what does the term “truly” add to this discussion?

          1. 1.1.1.1.1

            Again: asked and answered.

            Spend less time trying to play “gotcha” and more time thinking.

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