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SUPREME COURT OF THE UNITED STATES
_________________
No. 13–896
_________________
COMMIL USA, LLC, PETITIONER
v.CISCO SYSTEMS, INC.
on writ of certiorari to the united states court of appeals for
the federal circuit
[May 26, 2015]
Justice Kennedy delivered the opinion of the Court.[
1]*
A patent holder, and the holder’s lawful licensees, can recover
for monetary injury when their exclusive rights are violated by
others’ wrongful conduct. One form of patent injury occurs if
unauthorized persons or entities copy, use, or otherwise infringe
upon the patented invention. Another form of injury to the patent
holder or his licensees can occur when the actor induces others to
infringe the patent. In the instant case, both forms of
in-jury—direct infringement and wrongful inducement of others to
commit infringement—were alleged. After two trials, the defendant
was found liable for both types of injury. The dispute now before
the Court concerns the inducement aspect of the case.
I
The patent holder who commenced this action is the petitioner
here, Commil USA, LLC. The technical details of Commil’s patent are
not at issue. So it suffices to say, with much oversimplification,
that the patent is for a method of implementing short-range
wireless networks. Suppose an extensive business headquarters or a
resort or a college campus wants a single, central wireless system
(sometimes called a Wi-Fi network). In order to cover the large
space, the system needs multiple base stations so a user can move
around the area and still stay connected. Commil’s patent relates
to a method of providing faster and more reliable communications
between devices and base stations. The particular claims of
Commil’s patent are discussed in the opinion of the United States
Court of Appeals for the Federal Circuit. 720 F. 3d 1361,
1364–1365, 1372 (2013).
Commil brought this action against Cisco Systems, Inc., which
makes and sells wireless networking equipment. In 2007, Commil sued
Cisco in the United States District Court for the Eastern District
of Texas. Cisco is the respondent here. Commil alleged that Cisco
had infringed Commil’s patent by making and using networking
equipment. In addition Commil alleged that Cisco had induced others
to infringe the patent by selling the infringing equipment for them
to use, in contravention of Commil’s exclusive patent rights.
At the first trial, the jury concluded that Commil’s patent was
valid and that Cisco had directly infringed. The jury awarded
Commil $3.7 million in damages. As to induced infringement, the
jury found Cisco not liable. Commil filed a motion for a new trial
on induced infringement and damages, which the District Court
grantedbecause of certain inappropriate comments Cisco’s counsel
had made during the first trial.
A month before the second trial Cisco went to the United States
Patent and Trademark Office and asked it to re-examine the validity
of Commil’s patent. The Office granted the request; but,
undoubtedly to Cisco’s disappointment, it confirmed the validity of
Commil’s patent. App. 159, 162.
Back in the District Court, the second trial proceeded, limited
to the issues of inducement and damages on that issue and direct
infringement. As a defense to the claim of inducement, Cisco argued
it had a good-faith belief that Commil’s patent was invalid. It
sought to introduce evidence to support that assertion. The
District Court, however, ruled that Cisco’s proffered evidence of
its good-faith belief in the patent’s invalidity was inadmissible.
While the District Court’s order does not provide the reason for
the ruling, it seems the court excluded this evidence on the
assumption that belief in invalidity is not a defense to a
plaintiff’s claim that the defendant induced others to
infringe.
At the close of trial, and over Cisco’s objection, the District
Court instructed the jury that it could find inducement if “Cisco
actually intended to cause the acts that constitute . . .
direct infringement and that Cisco knew or should have known that
its actions would induce actual infringement.”
Id., at 21.
The jury returned a verdict for Commil on induced infringement and
awarded $63.7 million in damages.
After the verdict, but before judgment, this Court issued its
decision in
Global-Tech Appliances, Inc. v.
SEB
S. A., 563 U. S. ___ (2011). That case, as will be
discussed in more detail, held that, in an action for induced
infringement, it is necessary for the plaintiff to show that the
alleged inducer knew of the patent in question and knew the induced
acts were infringing.
Id., at ___ (slip op.,at 10). Relying
on that case, Cisco again urged that the jury instruction was
incorrect because it did not state knowledge as the governing
standard for inducement liability. The District Court denied
Cisco’s motion and entered judgment in Commil’s favor.
Cisco appealed to the United States Court of Appeals for the
Federal Circuit. The Court of Appeals affirmed in part, vacated in
part, and remanded for further proceedings. The court concluded it
was error for the District Court to have instructed the jury that
Cisco could be liable for induced infringement if it “ ‘knew
or should have known’ ” that its customers infringed. 720
F. 3d, at 1366. The panel held that “induced infringement
‘requires knowledge that the induced acts constitute patent
infringement.’ ”
Ibid. (quoting
Global-Tech,
supra, at ___ (slip op., at 10)). By stating that Cisco
could be found liable if it “ ‘knew or should have known that
its actions would induce actual infringement,’ ” the Court of
Appeals explained, the District Court had allowed “the jury to find
[Cisco] liable based on mere negligence where knowledge is
required.” 720 F. 3d, at 1366. That ruling, which requires a
new trial on the inducement claim with a corrected instruction on
knowledge, is not in question here.
What is at issue is the second holding of the Court of Appeals,
addressing Cisco’s contention that the trial court committed
further error in excluding Cisco’s evidence that it had a
good-faith belief that Commil’s patent was in-valid. Beginning with
the observation that it is “axiomatic that one cannot infringe an
invalid patent,” the Court of Appeals reasoned that “evidence of an
accused inducer’s good-faith belief of invalidity may negate the
requisite intent for induced infringement.”
Id., at 1368.
The court saw “no principled distinction between a good-faith
belief of invalidity and a good-faith belief of non-infringement
for the purpose of whether a defendant possessed the specific
intent to induce infringement of a patent.”
Ibid.
Judge Newman dissented on that point. In Judge Newman’s view a
defendant’s good-faith belief in a patent’s invalidity is not a
defense to induced infringement. She reasoned that “whether there
is infringement in fact does not depend on the belief of the
accused infringer that it might succeed in invalidating the
patent.”
Id., at 1374 (opinion concurring in part and
dissenting in part). Both parties filed petitions for rehearing en
banc, which were denied. 737 F. 3d 699, 700 (2013). Five
judges, however, would have granted rehearing en banc to consider
the question whether a good-faith belief in invalidity is a defense
to induced infringement.
Id., at 700 (Reyna, J., dissenting
from denial of rehearing en banc).
This Court granted certiorari to decide that question. 574
U. S. ___ (2014).
II
Although the precise issue to be addressed concerns a claim of
improper inducement to infringe, the discussion to follow refers as
well to direct infringement and contributory infringement, so it is
instructive at the outset to set forth the statutory provisions
pertaining to these three forms of liability. These three relevant
provisions are found in §271 of the Patent Act.35
U. S. C. §271.
Subsection (a) governs direct infringement and provides:
“Except as otherwise provided in this title, whoever without
authority makes, uses, offers to sell, or sells any patented
invention, within the United States or imports into the United
States any patented invention during the term of the patent
therefor, infringes the patent.”
Under this form of liability, a defendant’s mental state is
irrelevant. Direct infringement is a strict-liability offense.
Global-Tech, 563 U. S., at ___ (slip op., at 5,
n. 2).
Subsection (b) governs induced infringement:
“Whoever actively induces infringement of a patent shall be
liable as an infringer.”
In contrast to direct infringement, liability for inducing
infringement attaches only if the defendant knew of the patent and
that “the induced acts constitute patent infringement.”
Id.,
at ___ (slip op., at 10). In Commil and the Government’s view, not
only is knowledge or belief in the patent’s validity irrelevant,
they further argue the party charged with inducing infringement
need not know that the acts it induced would infringe. On this
latter point, they are incorrect, as will be explained below.
Subsection (c) deals with contributory infringement:
“Whoever offers to sell or sells within the United States or
imports into the United States a component of a patented machine,
manufacture, combination or composition, or a material or apparatus
for use in practicing a patented process, constituting a material
part of the invention, knowing the same to be especially made or
especially adapted for use in an infringement of such patent, and
not a staple article or commodity of commerce suitable for
substantial noninfringing use, shall be liable as a
contributoryinfringer.”
Like induced infringement, contributory infringement requires
knowledge of the patent in suit and knowledge of patent
infringement.
Aro Mfg. Co. v.
Convertible Top Replacement
Co.,377 U. S. 476,488 (1964) (
Aro II).
This case asks a question of first impression: whether knowledge
of, or belief in, a patent’s validity is required for induced
infringement under §271(b).
A
Before turning to the question presented, it is necessary to
reaffirm what the Court held in
Global-Tech. Commil and the
Government (which supports Commil in this case) argue that
Global-Tech should be read as holding that only knowledge of
the patent is required for induced infringement. That, as will be
explained, would contravene
Global-Tech’s explicit holding
that liability for induced infringement can only attach if the
defendant knew of the patent and knew as well that “the induced
acts constitute patent infringement.” 563 U. S., at ___ (slip
op., at 10).
In
Global-Tech, the plaintiff, SEB, had invented and
patented a deep fryer. A few years later, Sunbeam asked Pentalpha
to supply deep fryers for Sunbeam to sell. To make the deep fryer,
Pentalpha bought an SEB fryer and copied all but the cosmetic
features. Pentalpha then sold the fryers to Sunbeam, which in turn
sold them to customers. SEB sued Pentalpha for induced
infringement, arguing Pentalpha had induced Sunbeam and others to
sell the infringing fryers in violation of SEB’s patent rights. In
defense, Pentalpha argued it did not know the deep fryer it copied
was patented and therefore could not be liable for inducing anyone
to infringe SEB’s patent. The question presented to this Court was
“whether a party who ‘actively induces infringement of a patent’
under35 U. S. C. §271(b) must know that the induced acts
constitute patent infringement.”
Id., at ___ (slip op., at
1).
After noting the language of §271(b) and the case law prior to
passage of the Patent Act did not resolve the question, the
Global-Tech Court turned to
Aro II, a case about
contributory infringement
. The
Global-Tech Court
deemed that rules concerning contributory infringement were
relevant to induced infringement, because the mental state imposed
in each instance is similar. Before the Patent Act, inducing
infringement was not a separate theory of indirect liability but
was evidence of contributory infringement. 563 U. S., at ___
(slip op., at 5). Thus, in many respects, it is proper to find
common ground in the two theories of liability.
Aro II concluded that to be liable for contributory
infringement, a defendant must know the acts were infringing. 377
U. S.
, at 488. In
Global-Tech, the Court said
this reasoning was applicable, explaining as follows:
“Based on this premise, it follows that the same knowledge is
needed for induced infringement under §271(b). As noted, the two
provisions have a common origin in the pre-1952 understanding of
contributory infringement, and the language of the two provisions
creates the same difficult interpretive choice. It would thus be
strange to hold that knowledge of the relevant patent is needed
under §271(c) but not under §271(b).
“Accordingly, we now hold that induced infringement under
§271(b) requires knowledge that the induced acts constitute
patent infringement.” 563 U. S., at ___ (slip op., at 10).
In support of Commil, the Government argues against the clear
language of Global-Tech. According to the Government, all
Global-Tech requires is knowledge of the patent: “The Court
did not definitively resolve whether Section 271(b) additionally
requires knowledge of the infringing nature of the induced acts.”
Brief for United States as Amicus Curiae 9. See also Brief
for Petitioner 17. Together, Commil and the Government claim the
“factual circumstances” of Global-Tech “did not require” the
Court to decide whether knowledge of infringement is required for
inducement liability. Brief for United States as Amicus
Curiae 12. See also Brief for Petitioner 23–24. But in the
Court’s Global-Tech decision, its description of the factual
circumstances suggests otherwise. The Court concluded there was
enough evidence to support a finding that Pentalpha knew “the
infringing nature of the sales it encouraged Sunbeam to make.” 563
U. S., at ___ (slip op., at 14). It was not only knowledge of
the existence of SEB’s patent that led the Court to affirm the
liability finding but also it was the fact that Pentalpha copied
“all but the cosmetic features of SEB’s fryer,” demonstrating
Pentalpha knew it would be causing customers to infringe SEB’s
patent. Id., at ___ (slip op., at 15).
Accepting the Government and Commil’s argument would require
this Court to depart from its prior holding. See id., at ___
(slip op., at 10). See also id., at ___ (Kennedy, J.,
dissenting) (slip op., at 1) (“The Court is correct, in my view, to
conclude that . . . to induce infringement a defendant
must know the acts constitute patent infringement” (internal
quotation marks omitted)). And the Global-Tech rationale is
sound. Qualifying or limiting its holding, as the Government and
Commil seek to do, would lead to the conclusion, both in inducement
and contributory infringement cases, that a person, or entity,
could be liable even though he did not know the acts were
infringing. In other words, even if the defendant reads the
patent’s claims differently from the plaintiff, and that reading is
reasonable, he would still be liable because he knew the acts might
infringe. Global-Tech requires more. It requires proof the
defendant knew the acts were infringing. And the Court’s opinion
was clear in rejecting any lesser mental state as the standard.
Id., at ___ (slip op., at 13–14).
B
The question the Court confronts today concerns whether a
defendant’s belief regarding patent validity is a defense to a
claim of induced infringement. It is not. The scienter element for
induced infringement concerns infringement; that is a different
issue than validity. Section 271(b) requires that the defendant
“actively induce[d] infringement.” That language requires intent to
“bring about the desired result,” which is infringement.
Id., at ___ (slip op., at 4). And because infringement and
validity are separate issues under the Act, belief regarding
validity cannot negate the scienter required under §271(b).
When infringement is the issue, the validity of the patent is
not the question to be confronted. In Cardinal Chemical Co.
v. Morton Int’l, Inc.,508 U. S. 83 (1993), the Court
explained, “A party seeking a declaratory judgment of invalidity
presents a claim independent of the patentee’s charge of
infringement.” Id., at 96. It further held noninfringement
and invalidity were “alternative grounds” for dismissing the suit.
Id., at 98. And in Deposit Guaranty Nat. Bank v.
Roper,445 U. S. 326 (1980), the Courtexplained that an
accused infringer “may prevail either by successfully attacking the
validity of the patent or by successfully defending the charge of
infringement.” Id., at 334. These explanations are in accord
with the long-accepted truth—perhaps the axiom—that infringement
and invalidity are separate matters under patent law. See
Pandrol USA, LP v. Airboss R. Prods., Inc., 320
F. 3d 1354, 1365 (CA Fed. 2003).
Indeed, the issues of infringement and validity appear in
separate parts of the Patent Act. Part III of the Act deals with
“Patents and Protection of Patent Rights,” including the right to
be free from infringement. §§251–329. Part II, entitled
“Patentability of Inventions and Grants of Patents,” defines what
constitutes a valid patent. §§100–212. Further, noninfringement and
invalidity are listed as two separate defenses, see §§282(b)(1),
(2), and defendants are free to raise either or both of them. See
Cardinal, supra, at 98. Were this Court to interpret
§271(b) as permitting a defense of belief in invalidity, it would
conflate the issues of infringement and validity.
Allowing this new defense would also undermine a presumption
that is a “common core of thought and truth” reflected in this
Court’s precedents for a century. Radio Corp. of America v.
Radio Engineering Laboratories, Inc.,293 U. S. 1,8
(1934). Under the Patent Act, and the case law before its passage,
a patent is “presumed valid.” §282(a); id., at 8. That
presumption takes away any need for a plaintiff to prove his patent
is valid to bring a claim. But if belief in invalidity were a
defense to induced infringement, the force of that presumption
would be lessened to a drastic degree, for 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: the clear and convincing standard. See Microsoft
Corp. v. i4i Ltd. Partnership, 564 U. S. ___,
___–___ (2011) (slip op., at 8–10). Defendants must meet that
standard to rebut the presumption of validity. Ibid.
To say that an invalid patent cannot be infringed, or that
someone cannot be induced to infringe an invalid patent, is in one
sense a simple truth, both as a matter of logic and semantics. See
M. Swift & Sons, Inc. v. W. H. Coe Mfg. Co., 102
F. 2d 391, 396 (CA1 1939). But the questions courts must
address when interpreting and implementing the statutory framework
require a determination of the procedures and sequences that the
parties must follow to prove the act of wrongful inducement and any
related issues of patent validity. “Validity and infringement are
distinct issues, bearing different burdens, different presumptions,
and different evidence.” 720 F. 3d, at 1374 (opinion of
Newman, J.). To be sure, if at the end of the day, an act that
would have been an infringement or an inducement to infringe
pertains to a patent that is shown to be invalid, there is no
patent to be infringed. But the allocation of the burden to
persuade on these questions, and the timing for the presentations
of the relevant arguments, are concerns of central relevance to the
orderly administration of the patent system.
Invalidity is an affirmative defense that “can preclude
enforcement of a patent against otherwise infringing conduct.” 6A
Chisum on Patents §19.01, p. 19–5 (2015). An accused infringer can,
of course, attempt to prove that the patent in suit is invalid; if
the patent is indeed invalid, and shown to be so under proper
procedures, there is no liability. See i4i, supra, at
___–___ (slip op., at 11–12). That is because invalidity is not a
defense to infringement, it is a defense to liability. And because
of that fact, a belief as to invalidity cannot negate the scienter
required for induced infringement.
There are also practical reasons not to create a defense
based on a good-faith belief in invalidity. First and foremost,
accused inducers who believe a patent is invalid have various
proper ways to obtain a ruling to that effect. They 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 can seek inter
partes review at the Patent Trial and Appeal Board and receive
a decision as to validity within 12 to 18 months. See §316. Or they
can, as Cisco didhere, seek ex parte reexamination of
the patent by the Patent and Trademark Office. §302. And, of
course, any accused infringer who believes the patent in suit is
invalid may raise the affirmative defense of invalidity.
§282(b)(2). If the defendant is successful, he will be immune from
liability.
Creating a defense of belief in invalidity, furthermore,
would have negative consequences. It can render litigation more
burdensome for everyone involved. Every accused inducer would have
an incentive to put forth a theory of invalidity and could likely
come up with myriad arguments. See Sloan, Think it is Invalid? A
New Defense to Negate Intent for Induced Infringement, 23 Fed. Cir.
B. J. 613, 618 (2013). And since “it is often more difficult
to determine whether a patent is valid than whether it has been
infringed,” Cardinal, 508 U. S., at 99, accused
inducers would likely find it easier to prevail on a defense
regarding the belief of invalidity than noninfringement. In
addition the need to respond to the defense will increase discovery
costs and multiply the issues the jury must resolve. Indeed, the
jury would be put to the difficult task of separating the
defendant’s belief regarding validity from the actual issue of
validity.
As a final note, “[o]ur law is . . . no stranger to
the possibility that an act may be ‘intentional’ for purposes of
civil liability, even if the actor lacked actual knowledge that her
conduct violated the law.” Jerman v. Carlisle, McNellie,
Rini, Kramer & Ulrich, L. P. A.,559 U. S.
573–583 (2010). Tortious interference with a contract provides an
apt example. While the invalidity of a contract is a defense to
tortious interference, belief in validity is irrelevant.
Restatement (Second) of Torts §766, Comment i (1979). See
also W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and
Keeton on Law of Torts 110 (5th ed. 1984). In a similar way, a
trespass “can be committed despite the actor’s mistaken belief that
she has a legal right to enter the property.” Jerman,
supra, at 583 (citing Restatement (Second) of Torts §164,
and Comment e (1963–1964)). And of course, “[t]he general
rule that ignorance of the law or a mistake of law is no defense to
criminal prosecution is deeply rooted in the American legal
system.” Cheek v. United States,498 U. S.
192,199 (1991). In the usual case, “I thought it was legal” is no
defense. That concept mirrors this Court’s holding that belief in
invalidity will not negate the scienter required under
§271(b).
III
The Court is well aware that an “industry has developed in
which firms use patents not as a basis for producing and selling
goods but, instead, primarily for obtaining licensing fees.”
eBay Inc. v. MercExchange, L. L. C.,547
U. S. 388,396 (2006) (Kennedy, J., concurring). Some companies
may use patents as a sword to go after defendants for money, even
when their claims are frivolous. This tactic is often pursued
through demand letters, which “may be sent very broadly and without
prior investigation, may assert vague claims of infringement, and
may be designed to obtain payments that are based more on the costs
of defending litigation than on the merit of the patent claims.” L.
Greisman, Prepared Statement of the Federal Trade Commission on
Discussion Draft of Patent Demand Letter Legislation before the
Subcommittee on Commerce, Manufacturing, and Trade of the House
Committee on Energy and Commerce 2 (2014). This behavior can impose
a “harmful tax on innovation.” Ibid.
No issue of frivolity has been raised by the parties in this
case, nor does it arise on the facts presented to this Court.
Nonetheless, it is still necessary and proper to stress that
district courts have the authority and responsibility to ensure
frivolous cases are dissuaded. If frivolous cases are filed in
federal court, it is within the power of the court to sanction
attorneys for bringing such suits. Fed. Rule Civ. Proc. 11. It
is also within the district court’s discretion to award attorney’s
fees to prevailing parties in “exceptional cases.”35
U. S. C. §285; see also Octane Fitness, LLC v.
ICON Health & Fitness, Inc., 572 U. S. ___, ___–___
(2014) (slip op., at 7–8). These safeguards, combined with the
avenues that accused inducers have to obtain rulings on the
validity of patents, militate in favor of maintaining the
separation expressed throughout the Patent Act between infringement
and validity. This dichotomy means that belief in invalidity is no
defense to a claim of induced infringement.
The judgment of the United States Court of Appeals for the
Federal Circuit is vacated, and the case is remanded for further
proceedings consistent with this opinion.
It is so ordered.
Justice Breyer took no part in the consideration or decision
of this case.