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Cisco Reroutes Federal Circuit's Induced Infringement Intent Instructions
Practical Law Legal Update 6-532-5091 (Approx. 3 pages)
Cisco Reroutes Federal Circuit's Induced Infringement Intent Instructions
by PLC Intellectual Property & Technology
| Published on 26 Jun 2013 • USA (National/Federal) |
The US Court of Appeals for the Federal Circuit held in Commil USA, LLC v. Cisco Systems, Inc., that a good-faith belief that a patent is not valid is evidence that may negate the specific intent to encourage another's infringement, which is required to show induced infringement.
On June 25, 2013 in Commil USA, LLC v. Cisco Systems, Inc., the US Court of Appeals for the Federal Circuit held that a good-faith belief of patent invalidity is evidence that may negate the specific intent to encourage another's infringement, which is required for an induced infringement determination. Cisco appealed to the Federal Circuit a jury verdict that it induced infringement of Commil's patent concerning wireless, mobile communication protocols, arguing, among other things, that the district court:
- Improperly instructed the jury on the knowledge requirement for finding induced infringement.
- Erred in preventing Cisco from presenting evidence of its good-faith belief of the patent's invalidity to rebut Commil's induced infringement allegations.
The district court had instructed the jury that it could find inducement if "Cisco actually intended to cause the acts that constitute direct infringement and that Cisco knew or should have know that its actions would induce infringement."
The Federal Circuit determined that the jury instruction was improper because it allowed the jury to find inducement on the showing of mere negligence rather than actual knowledge or willful blindness, which is now required following the Supreme Court's decision in Global-Tech Appliances, Inc. v. SEB SA, 131 S. Ct. 2060 (2011). In that case, the Supreme Court held that induced infringement requires knowledge that the induced acts constitute patent infringement. In its opinion, the Federal Circuit ultimately set aside the jury verdict because the jury instruction could have changed the outcome.
Although the Federal Circuit had not previously determined whether a good-faith belief of invalidity may negate the requisite intent for induced infringement, the majority (Judges Prost and O'Malley) of this panel held that it may. The majority noted that:
- A good-faith belief of non-infringement is relevant evidence that tends to show that an accused party lacked the intent required to be held liable for induced infringement.
- It saw no principled distinction between a good-faith belief of invalidity and a good-faith belief of non-infringement for the purpose of determining whether an accused party possessed the specific intent to induce patent infringement.
However, the majority cautioned that evidence of a good-faith belief of invalidity does not preclude a finding of inducement but is evidence that should be considered on the issue of whether the accused party knew that the induced acts constitute patent infringement.
Judge Newman dissented arguing that:
- As in tort law, a mistake of law, even if made in good faith, does not absolve a tortfeasor.
- Infringement does not depend on the accused infringer's belief.
- The inducement statute, 35 U.S.C. § 271(b):
- provides a remedy against an entity that provides an infringing product or method to direct infringers, but is not itself a direct infringer; and
- does not import a good-faith belief on validity requirement into a proof of infringement determination.
Update: On December 5, 2014 the US Supreme Court granted certiorari in part to review whether the Federal Circuit erred in holding that a defendant's belief that a patent is invalid is a defense to induced infringement under 35 U.S.C. § 271(b) (Commil USA, LLC v. Cisco Sys., Inc., No. 13-896, (Dec. 5, 2014)).
Court documents: