May 29, 2015
Earlier this week, the Supreme Court provided much needed guidance regarding the availability of certain defenses to claims of induced infringement. Commil USA, LLC v. Cisco Systems, Inc., U.S. Supreme Court, No. 13-896, May 26, 2015. Induced infringement under 35 U.S.C. Section 271(b) is different from direct infringement in that a successful assertion of inducement holds an accused infringer liable for the acts of others which infringe a patent; whereas in direct infringement, an accused infringer is liable for only his own actions. Further, induced infringement requires evidence that the accused infringer intended to induce infringement, whereas direct infringement has no intent requirement. What a patentee must prove and what beliefs can exonerate an accused infringer from liability for induced infringement have been in flux in recent years. The Supreme Court’s ruling provides clarity on both issues.

The Court held that, to succeed on induced infringement, the patentee must prove both that:
  1. The accused infringer knew of the patent, and
  2. The accused infringer knew that the induced actions would cause infringement.
Going further, the Court overturned the Federal Circuit’s earlier ruling in this case which had held that a good faith belief that a patent is invalid is a defense to induced infringement. In support of its decision, the Court pointed to the presumption of patent validity and noted that the presumption is eviscerated if a party can avoid liability for knowingly inducing infringement just by forming a belief that the patent is invalid. The Court carefully observed that there is, and should be, a distinction between infringement and invalidity. Relying on that distinction, the Court held that a good faith belief that induced actions are non-infringing is a defense to claims of induced infringement, while a good faith that the patent is invalid is not a defense to induced infringement.

While the Supreme Court’s ruling in Cisco Systems has an impact on claims of induced infringement, the ruling did not address, and thus does not impact, defenses available for direct infringement and willful infringement. Accordingly, a good faith belief in invalidity based on a formal opinion of counsel remains an important defense to claims of willful infringement. In sum, the Court’s ruling reaffirms that obtaining a formal opinion of counsel regarding non-infringement and invalidity is extremely important in ensuring that your company is in the best possible position should patent litigation arise. For more information on this ruling, please contact the authors or your Polsinelli attorney.