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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.â€
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.’ â€
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.â€
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.â€
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.â€
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.â€
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.â€
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.â€
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.â€
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.â€
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,â€
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,â€
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.â€
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.â€
§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.â€
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.â€
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 legalâ€
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.â€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.