Washington DC
27 May 2015
Reporter: Tammy Facey

Invalidity belief is no excuse, says Supreme Court

The US Court of Appeals for the Federal Circuit’s decision in the Commil USA v Cisco Systems case has been vacated in a 6-2 vote at the US Supreme Court.

The Supreme Court held that Cisco’s good faith belief that the patent was invalid was not a viable defence claim.

The case began in 2002 when Commil claimed Cisco induced customers to infringe its patent for a way of improving the implementation of a wireless network where multiple access points are needed.

A lower court awarded approximately $63.8 million in damages and $10.3 million in interest to Commil, but the Federal Circuit set them aside after Cisco claimed that it believed the patent was invalid at the time of the alleged infringement.

The Federal Circuit accepted this argument in December 2014, when it heard the case, stating: “It is axiomatic that one cannot infringe an invalid patent.”

The appeals court ordered a new trial, but Commil asked the Supreme Court to weigh in on the dispute at the beginning of 2014.

The Supreme Court decided on 26 May that the Federal Circuit made an error in accepting Cisco’s claim and that a good faith belief is not enough to fight inducement charges.

In the majority’s opinion, Justice Pauline Newman said: “A good faith’s belief in a patent’s validity is not a defence for induced infringement.”

She held that “whether there is infringement does not depend on the belief of the accused infringer that it might succeed in invalidating the patent”.

Two justices, dissented from the decision: “Because only valid patents can be infringed, anyone with a good-faith belief in a patents invalidity necessarily believes the patent cannot be infringed,” they said.

“A good faith belief that a patent is invalid is therefore a defence to induced infringement of that patent.”

Tom Rein, partner and head of the Chicago intellectual property group at Sidley Austin, said: “The decision will put an end to the practice of seeking an opinion of outside counsel on invalidity to support an inducement defense.”

The Federal Circuit’s opinion has been remanded for further proceedings.

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