Every year in late May or June, you can count on flowers blooming and the Supreme Court reversing the Federal Circuit on some patent issue. This year is no exception. The Supreme Court was asked to follow up on an issue regarding induced infringement of patents. Just a few years ago, the Court explained that to establish induced infringement, a plaintiff needed to show that the alleged inducer not only knew of the patent in question but also knew that the induced acts were infringing. Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011). The issue this year was whether an alleged inducer could avoid infringement if it had a good faith belief that the patent was invalid. The Court reversed the Federal Circuit and said that the defendant's belief about invalidity is irrelevant. Commil USA, LLC v. Cisco Sys., Inc., 191 L. Ed. 2d 883 (2015).
The Federal Circuit had reasoned (as did Justices Scalia and Roberts in dissent) that one cannot infringe an invalid patent. Justice Scalia sounded like a philosophy professor in his dissent: "Only valid patents confer... exclusivity—invalid patents do not. It follows, as night the day, that only valid patents can be infringed. To talk of infringing an invalid patent is to talk nonsense." (citation omitted)
The majority felt otherwise. Justice Kennedy, who wrote a dissenting opinion in Global-Tech, wrote for the majority and provided several different reasons for the Court's decision. Before doing so, though, he thoroughly rejected an argument raised by Commil and the U.S. Government that a defendant can be found to induce absent proof that the defendant knew the induced acts to be infringing. In other words, he strictly applied the decision from which he dissented and therefore eliminated any doubt of how strong the Global-Tech rule is.
Moving to the primary issue at hand, the majority began by detailing how the patent law distinguishes infringement and validity as separate matters. They appear in separate parts of the patent act; non-infringement and invalidity are described as separate defenses; and defendants can choose to raise either or both of them. The majority then explained that "a common core of thought and truth" regarding patents is that they are presumed valid, and if mere belief in invalidity were a defense to induced infringement, "the force of that presumption would be lessened to a drastic degree."
The majority readily admitted that, "if, at the end of the day, an act that would have been an infringement... pertains to a patent that is shown to be invalid, there is no patent to be infringed." But the majority found both the allocation of burden and the timing of the presentations of relevant arguments to be "concerns of central relevance to the orderly administration of the patent system." Justice Kennedy explained that this conclusion follows "because invalidity is not a defense to infringement, it is a defense to liability."
The Court then moved to practical matters. It explained that there are numerous ways to obtain a ruling backing up a defendant's belief about invalidity, such as a declaratory judgment action or affirmative defense in court, or an inter partes review or ex parte reexamination by the Patent and Trademark Office. Justice Kennedy concluded this analysis by observing that in many areas of the law, belief is not relevant; "In the usual case, 'I thought it was legal' is no defense."
Before concluding, the Court briefly addressed the issue of patent trolls and frivolous claims. It said that this issue was not raised in this case, but nonetheless it issued a reminder to district courts that they "have the authority and responsibility to ensure frivolous cases are dissuaded," and that "it is within the power of the court to sanction attorneys for bringing such suits." The Court viewed this as one of the important safeguards that, combined with defendants' other options for establishing invalidity, allows the separation between infringement and validity to be maintained.
Unlike some of its prior rebukes of the Federal Circuit, this one had very little disparagement of the specific reasoning of the court below. The Supreme Court here simply presented its own reasoning and then vacated and remanded for further proceedings.
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