Beth Z. Shaw, Brake Hughes Bellermann LLP
On June 25, 2013, the U.S. Court of Appeals for the Federal Circuit in Commil USA v. Cisco Systems held that evidence of a good-faith belief of invalidity may negate the requisite intent for induced infringement.
In an opinion filed by Judge Prost and joined in part by Judge Newman and Judge O’Malley, the court restated that induced infringement requires knowledge that the induced acts constitute patent infringement. The knowledge requirement may be satisfied by showing actual knowledge or willful blindness. The court in this case held that the jury instruction was legally erroneous and had a prejudicial effect. The error, the court wrote, was that that the jury was permitted to find induced infringement based on mere negligence where knowledge is required.
Significantly, the court also held that the defendant, Cisco, should have been allowed to present evidence of its good faith belief of invalidity to rebut allegations of induced infringement. The opinion noted that the Federal Circuit appears “to have not previously determined whether a good-faith belief of invalidity may negate the requisite intent for induced infringement. We now hold that it may.” Under the case law, “it is clear that a good-faith belief of non-infringement is relevant evidence that tends to show that an accused inducer lacked the intent required to be held liable for induced infringement.”
Judge Newman dissented in part. She wrote that a good-faith belief of patent invalidity may be raised as a defense to willfulness of the infringement, but it is not a defense to the fact of infringement. Judge O’Malley also dissented in part, agreeing that good faith belief in the invalidity of the patent can be a defense to induced infringement, but Cisco should be allowed a third jury trial.
It remains to be seen what, exactly, is evidence of a good-faith belief of invalidity, and what that evidence might actually look like in practice. It is unclear if a full opinion of counsel would be required, or would be enough, to prove such a belief. The court cites several district court cases, at least one of which mentions an opinion of counsel. Potential patent infringement defendants should therefore take a serious look at getting opinions of counsel regarding invalidity defenses, as they now officially may provide a defense to induced infringement.