In March 31 oral arguments for the case of Commil USA, LLC v. Cisco Systems, Inc., the Supreme Court considered arguments for an extension to an already existent patent infringement defense: that the alleged infringer lacked the requisite intent to infringe. A good faith belief that another’s patent is invalid may already provide a defense to patent infringement. Now, the Court will determine whether that same defense can extend to cases of “induced infringement.”

In this case, Commil USA, a non-practicing entity, otherwise known as a “patent troll,” patented technology that essentially allows wifi signals transmitting from multiple devices to seamlessly cover large areas. It sued Cisco in the Eastern District of Texas in 2007 because it alleged Cisco’s “Split-MAC WLAN systems” infringed on its technology. In actuality, however, Cisco’s customers were the alleged infringers, meaning Commil USA was pursuing an induced infringement claim against the company that paved the way for the infringement.

After Cisco successfully asserted a defense based on its “good faith belief” that Commil’s patent was invalid, U.S. Court of Appeals for the Federal Circuit threw out Commil’s $64 million district court verdict in 2013. Although Commil acknowledged to the court that some intent is necessary to prove infringement, it argued that allowing such a defense would let indirect infringers off the hook far too easily. It also argued that one who believes a patent is invalid could pursue other means of establishing that validity, such as a challenge in the U.S. Patent and Trademark Office. Finally, it asserted that district courts must begin by assuming patents’ validity, though Chief Justice John Roberts pointed out that these district courts hold only about 60% of patents valid, suggesting “not much of a presumption of validity.”

During oral arguments, several commentators noted the justices appeared split on the issue. A ruling in Cisco’s favor would likely afford indirect infringers a more significant opportunity to prove their innocence—for better or for worse.

Sources: http://www.scotusblog.com/2014/12/court-to-rule-on-license-plate-messages-two-other-cases/ http://arstechnica.com/tech-policy/2015/03/if-you-believe-enough-can-you-invalidate-a-patent-supreme-court-to-decide/ http://www.supremecourt.gov/oral_arguments/argument_transcripts/13-896_q8l1.pdf

For more information on this topic, please visit our Patent Litigation service page.

Klemchuk LLP is an Intellectual Property (IP), Technology, Internet, and Business law firm.  The firm offers comprehensive legal services including litigation and enforcement of all forms of IP as well as registration and licensing of patents, trademarks, trade dress, and copyrights.  The firm also provides a wide range of technology, Internet, e-commerce, and business services including business planning, formation, and financing, mergers and acquisitions, business litigation, data privacy, and domain name dispute resolution. 

Klemchuk LLP hosts Culture Counts, a blog devoted to the discussion of law firm culture and corporate core values with frequent topics about positive work environment, conscious capitalism, entrepreneurial management, positive workplace culture, workplace productivity, and corporate core values.