Today, the Supreme Court decided Commil v. Cisco, a patent case that asked whether having a “good-faith belief” that a patent is invalid means that someone can’t induce infringement of a patent.
As we previously noted, this is a complex area of patent law. Generally, the law is that someone “induces” infringement if they encourage someone else to perform the patented act or make the patented product, with full knowledge of the patent and with intent to infringe the patent. So the question: does someone have intent to induce infringement if they have a good-faith belief that the patent is invalid?
Despite the limited nature of this question, the patent owner and the Government wanted to go further. Commil (the patent owner) and the Government (through the Solicitor General) asked that the Court overrule a previous holding in Global-Tech vs. SEB on inducing infringement. They wanted someone to be liable for inducement even if they never intended to cause infringement, that is, they had a good-faith reason to believe what they were doing was not infringing. We argued against this interpretation in our amicus brief to the Court.
Thankfully, the Supreme Court soundly rejected the broader argument made by the patent owner and the Government:
Accepting the Government and Commil’s argument would require this Court to depart from its prior holding….And the Global-Tech rationale is sound. Qualifying or limiting its holding, as the Government and Commil seek to do, would lead to the conclusion, both in inducement and contributory infringement cases, that a person, or entity, could be liable even though he did not know the acts were infringing. 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. It 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.
However, in answering the narrower question before the Court, the Supreme Court agreed with Commil. It held that a good-faith belief in a patent's invalidity is not a defense to inducement, that is, “belief in invalidity will not negate the scienter required under §271(b).” The Supreme Court found that because of the statutory text and because other avenues existed to challenge patents, there was no reason to read the statute to provide for this defense.
We’re disappointed with this part of the outcome. Many of the worst patents out there are easily wielded as weapons precisely because they are very broad (meaning they are often infringed) but also likely invalid (often as a result of Alice v. CLS Bank). This part of the ruling is limited to situations where a patent is both infringed and invalid. But patent trolls with invalid patents can still use this decision to extort money since they might have a stronger infringement claim and can strategically dismiss lawsuits to evade having their patent invalidated by a court when actually challenged (a fact the Supreme Court didn’t consider).
Interestingly, the Court briefly acknowledged the patent troll problem. In the final part of the opinion, the Court noted the patent troll "industry," and pointed out that "that district courts have the authority and responsibility to ensure frivolous cases are dissuaded," by imposing sanctions under Rule 11 or attorney's fees under Octane v. ICON. While we're glad that the Court is aware of the problem, it could have done more by recognizing a good-faith belief in validity as a defense to inducement.
This opinion shows why quicker, cheaper, and more effective avenues are needed to challenge bad patents. Congress can ensure that it’s not easy for patent trolls to use invalid patents to threaten people. We hope they do that.
