United States: Supreme Court Says Good-Faith Belief In Patent Invalidity No Defense To A Charge Of Inducing Infringement

Four years ago, in Global-Tech Appliances v. SEB S.A., 563 U.S. ___ (2011), the U.S. Supreme Court held that in order to prove that a defendant in a patent case had induced another person or entity's infringement, it is necessary for the plaintiff to prove that the alleged inducer (i) knew of the patent and (ii) knew that the induced acts were infringing. In its 2013 decision in Commil USA, LLC v. Cisco Systems, Inc., a divided panel of the Federal Circuit interpreted Global-Tech as compelling a new rule of patent litigation—that an accused infringer's good-faith belief that a patent is invalid "may negate the requisite intent for induced infringement." 720 F.3d 1361, 1368 (Fed. Cir. 2013). Five Federal Circuit judges—just short of the majority needed—would have granted en banc review of the Commil decision.

The Supreme Court, however, did grant review, and on May 26, 2015, it vacated the Federal Circuit's decision by a 6–2 vote, holding that "belief in invalidity will not negate the scienter required under [35 U.S.C.] § 271(b)," the induced-infringement statute. Justice Scalia, joined by Chief Justice Roberts, dissented, observing that, in his view, the Court's decision "increases the in terrorem power of patent trolls." (Justice Breyer was recused and thus did not participate in the decision.)

The Commil decision is significant on a number of fronts. Most notably, it changes the rule of law applicable to claims of induced infringement and removes the defense created by the Federal Circuit's now-vacated decision. Moreover, it represents yet another in a long and mostly uninterrupted string of Supreme Court decisions reversing or otherwise upsetting the Federal Circuit's patent decisions. But, as Justice Scalia's dissent points out, the decision also represents one of the Supreme Court's few patent decisions in recent years ruling in favor of a patent owner.

A forthcoming Jones Day Commentary will explore this decision and its consequences in greater detail.

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