Two days ago, on 26 May 2015, the U.S. Supreme Court (SCOTUS) decided another patent dispute — Commil USA, LLC v. Cisco Systems, Inc., 575 U.S. ___, (2015). At trial, the plaintiff, Commil, showed that Cisco was guilty of inducing its customers to infringe Commil’s patent under 35 U.S.C. § 271(b). This statute states, “Whoever actively induces infringement of a patent shall be liable as an infringer.” In practice, induced liability requires that a defendant has knowledge of the patent and knows that “the induced acts constitute patent infringement.” Slip op. at 3. See also Global-Tech Appliances, Inc. v. SEB S. A., 563 U. S. ___ (2011). For the first time, SCOTUS addresses whether knowledge of, or belief in, a patent’s validity is required for induced infringement under 35 U.S.C. § 271(b). The answer is no.
The reasoning may be subtle to the casual reader. Patent infringement and validity are distinct concepts in the Patent Act. Slip op. at 9. If belief in the invalidity of a patent were a defense to induced infringement, the force of that presumption would be lessened to a drastic degree, asserts the SCOTUS majority. A defendant could prevail if he proved he reasonably believed the patent was invalid. That would “circumvent the high bar Congress is presumed to have chosen,” which is the clear and convincing standard that a patent is valid unless shown otherwise. See Microsoft Corp. v. i4i Ltd. Partnership, 564 U. S. ___, ___– ___ (2011) (slip op., at 8–10). Invalidity of a patent is not a defense to infringement, it is a defense to liability. According to the SCOTUS majority, a belief as to invalidity cannot negate the scienter required for induced infringement. Slip op. at 11.
In its opinion, SCOTUS provides a few suggestions for defendants consistent with its decision. For example, accused inducers who believe a patent is invalid can file a declaratory judgment action asking a federal court to declare the patent invalid. See MedImmune, Inc. v. Genentech, Inc., 549 U. S. 118, 137 (2007). They also can seek inter partes review at the Patent Trial and Appeal Board (PTAB) and receive a decision as to validity within 12 to 18 months. See 35 U.S.C. § 316. Or they can, as Cisco did here, seek ex parte reexamination of the patent by the Patent and Trademark Office (USPTO) under 35 U.S.C. § 302. And, any accused infringer who believes the patent in suit is invalid may raise the affirmative defense of invalidity at trial under 35 U.S.C § 282(b)(2).
Notably absent from this opinion is any mention of the role of non-infringement opinions provided by outside or inside counsel. Also, according to my memory, this is the first time that I see an opinion use the term “patent trolls.” See p. 3 of the dissent by Justice Scalia.