On May 26, in Commil USA v. Cisco Systems, the Supreme Court rejected 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, but the Court determined that the same defense could not extend to cases of “induced infringement.”

The case, decided 6-2, was significant for another reason: it was the first time that the term “patent troll” was used by a Supreme Court justice. Justice Antonin Scalia, writing in dissent, used the term and said that the ruling would only make it easier for these non-practicing entities to prey on companies active in commerce. Writing for the majority, Justice Anthony Kennedy said such a defense would “render litigation more burdensome for everyone involved.”

In this case, Commil USA, a non-practicing entity itself, 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 direct 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 invalidity, 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.”

The ruling, Commil’s attorney said, restored “common sense” to patent litigation. Mark Werbner, a graduate of the SMU Dedman School of Law, helped represent Commil USA. And now the case will finally begin with one less defense available to Cisco.

Sources: http://www.bloomberg.com/news/articles/2015-05-27/supreme-court-backs-commil-in-cisco-case-intellectual-property http://www.reuters.com/article/2015/05/26/usa-court-ip-idUSL1N0YH0WK20150526? http://www.supremecourt.gov/opinions/14pdf/13-896_l53m.pdf

For more information on this topic, please visit our Patent Litigation service page, which is part of our IP & Business Litigation practice.

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