Good Faith Belief of Invalidity Not a Defense to Inducement

6.23.15

Last month, the Supreme Court held in Commil USA, LLC v. Cisco Systems, Inc. that an alleged infringer’s good faith belief that a patent is invalid will not serve as a defense to contributory infringement or inducement claims.

In 2007, Commil sued Cisco for infringing upon its patented method for reliable communications between wireless devices.  Commil argued that Cisco directly infringed its patents and also induced others to infringe by selling the infringing equipment for use.  The trial court refused to admit Cisco’s evidence in defense of the inducement claim that it, in good faith, believed Commil’s patents to be invalid.  Two juries returned verdicts for Commil on direct infringement and inducement, respectively, and awarded $63.7 million in damages.  On appeal, the Federal Circuit reversed in part, finding that the trial court erred in refusing to admit Cisco’s evidence that it believed Commil’s patents to be invalid.

The Supreme Court reversed, holding that a defendant’s “belief regarding patent validity is [not] a defense to a claim of induced infringement.”  In reaching this conclusion, the Court urges that allowing accused inducers to raise a “good faith” defense would undermine the presumption of validity under the Patent Act, as the accused “could likely come up with a myriad of arguments” as to why it believed the patent to be invalid, burdening the jury with the “difficult task of separating the defendant’s belief regarding validity from the actual issues of validity.”

Commil may prove beneficial for plaintiffs in inducement cases, as the decision wholly eliminates the “good faith” defense while simultaneously assuring that patentees will continue to enjoy a presumption of validity in contributory infringement suits.  Conversely, the keystone of a successful inducement defense will now be whether the defendant knew its actions constituted infringement of the disputed patent claims.  The Court makes clear, however, that defendants believing the patent in suit to be invalid may still raise the affirmative defense of invalidity, but must demonstrate by clear and convincing evidence that the patent is indeed invalid.

Thanks to Patterson IP Law clerk Jamie Starling for his assistance with this article.