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US Supreme Court Holds That A Belief of Patent Invalidity Is Not A Defense To Inducement Of Infringement

On May 26, 2015, the US Supreme Court in Commil USA, LLC v. Cisco Systems, Inc., No. 13-896, and held that a defendant's belief of patent invalidity is not a defense to active inducement of patent infringement under 35 U.S.C. § 271(b), which states “[w]hoever actively induces infringement of a patent shall be liable as an infringer.” In a 6-2 decision written by Justice Kennedy, the Court held that "because infringement and validity are separate issues under the [Patent] Act, belief regarding validity cannot negate the scienter required under §271(b)." Thus, a defendant who believes a patent is invalid can be liable for inducing infringement if the patent is found to be valid.

The Court, however, also held that inducement "requires proof the defendant knew the acts were infringing" in addition to knowledge of the patent. In other words, if the defendant reads the patent’s claims differently from the plaintiff, and
that reading is reasonable, there would be no inducement of infringement.

Citing Justice Kennedy's concurrence in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 396 (2006), the Court also noted that an “industry has developed in which firms use patents not as a basis for producing and selling goods but, instead, primarily for obtaining licensing fees.” Some patentees send demand letters, which “may be sent very broadly and without prior investigation, may assert vague claims of infringement, and may be designed to obtain payments that are based more on the
costs of defending litigation than on the merit of the patent claims.”

No issue of frivolity has been raised by the parties in this case, nor does it arise on the facts presented to this Court. Nonetheless, it is still necessary and proper to stress that district courts have the authority and responsibility to ensure frivolous cases are dissuaded. If frivolous cases are filed in federal court, it is within the power of the court to sanction attorneys for bringing such suits. Fed. Rule Civ. Proc. 11. It is also within the district court’s discretion to award attorney’s fees to prevailing parties in "exceptional cases." 35 U. S. C. §285; see also Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. ___, ___–___ (2014) (slip op., at 7–8). These safeguards, combined with the avenues that accused inducers ave to obtain rulings on the validity of patents, militate in favor of maintaining the separation expressed throughout the Patent Act between infringement and validity.

In dissent, Justice Scalia wrote, “Infringing a patent means invading a patentee’s exclusive right to practice his claimed invention. 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."