The Supreme Court today agreed to decide an important question of inducement liability under the Patent Act: whether a defendant accused of inducing infringement may defend on the ground that it believed in good faith that the infringed patent was invalid. Cisco is the defendant and unsuccessfully sought to persuade the Court to deny cert. The case is Commil USA LLC v. Cisco Systems, Inc., No. 13-896. The Court will probably hear argument in March and decide the case by June.
Direct infringement is a strict-liability cause of action, but inducement defendants have historically been able to assert that they reasonably believed the action they were inducing would not infringe. The Federal Circuit held in 2013 that the same rule applies to belief that a patent is invalid. The Solicitor General was asked to weigh in; the SG told the Court not only that it should take the case, but that the Federal Circuit is wrong and that the inducement analysis should completely ignore the defendant’s belief that the patent was invalid. The SG ducked the question whether courts must also ignore a good-faith belief in noninfringement, which the SG said is not presented here. That issue, however, goes to the very predicate of Cisco’s argument, and so the Court may well say something about it.
This is an important issue for companies that regularly are accused of induced infringement – for instance, by allegedly inducing their customers to practice a patented method. The software and technology industries weighed in heavily in support of the mental-state element of inducement liability a few years ago in Global-Tech Appliances v. SEB S.A., and this case presents an opportunity to develop the mental-state element still further. But if the government has its way, much of the utility of that defense will be eliminated – certainly as to invalidity, and conceivably as to noninfringement too.
