By Rachel Sachs
On Tuesday, the Supreme Court issued its opinion in Commil USA, LLC v. Cisco Systems, Inc., in which it held that a defendant’s belief that a patent is invalid is not a defense to induced infringement of that patent under 35 U.S.C. § 271(b). Four years ago, in a case called Global-Tech, the Court had held that a defendant could not be liable for induced infringement unless it had knowledge not only of the patent’s existence but also that its behavior constituted patent infringement. In Commil, six Justices clarified that a defendant who has knowledge of a patent’s existence but believes it to be invalid may still be held liable for inducing its infringement. (Justice Scalia dissented and was joined by Chief Justice Roberts, with Justice Breyer recused.)
Commil raises several issues for discussion, but I want to talk about just one here: the majority’s fixation on the distinction between infringement and validity. The key passages of Justice Kennedy’s opinion, on pages 9 through 11, seem to rest heavily on preserving the separation between these two issues. Essentially, as Justice Kennedy puts it, “because infringement and validity are separate issues under the Act, belief regarding validity cannot negate the scienter required under §271(b).” Justice Kennedy is clearly correct as a formal matter. We ask different legal questions when adjudicating issues of infringement and validity, we apply different burdens of proof to the two questions, and we involve different parties in their resolution.
But Justice Kennedy’s opinion ignores the close practical relationship between the two issues. By contrast, scholars and practitioners have long recognized the tension between infringement and validity as instantiated in patent litigation. A patentee wants its patent to be construed broadly, to ensure that the defendant’s invention falls within its bounds. Yet at the same time, the patentee must avoid claiming too broadly, or its patent may be invalidated on precisely those grounds. (Defendants typically advocate the opposite positions.)
This is not an imagined hypothetical. A case decided just a few weeks ago by the Federal Circuit, AstraZeneca LP v. Breath Ltd., provides a helpful example. AstraZeneca had sued generic drug manufacturers who had filed Abbreviated New Drug Applications seeking to market generic versions of AstraZeneca’s Pulmicort Respules, used to treat asthma in children. The district court had originally construed AstraZeneca’s patent claims narrowly, after which a jury found that the claims were not infringed by the defendants. In October 2013, the Federal Circuit reversed the district court’s claim construction in favor of AstraZeneca’s broader preferred interpretation. But on remand, the district court held the relevant claims obvious (and thus invalid) in light of AstraZeneca’s new, broader patent scope. The Federal Circuit has now affirmed the district court’s obviousness determination.
To be sure, an appreciation of the practical relationship between infringement and validity is not obviously dispositive of Commil. But to the extent that defendants must “know” their conduct infringes a particular patent, they ought to know something about the patentee’s own interpretation of their patent’s breadth – and that, in turn, tells them something about the likelihood of its validity.
Great post! I wonder whether there is a point, in the case law or perhaps it should reflect such a point, where you have good reason to believe a patent is invalid such that you are immunized. For example, what if you relied on a lower court decision finding a patent invalid that turns out to later be reversed? If during the interim you induce infringement is there a defense premised on the lower court decision? This might be a bit wrapped up in the law of preclusion and when a case that is going to be appealed is held to be final enough to have preclusive power (I am thinking of the Moitie case from years back at the Supreme Court). Another way to think of this could be more like qualified immunity and asking whether the invalidity was “clearly established,” for example?
Interesting question! (Prefatory note: recall that Commil takes place in a world in which the defendant’s belief in the patent’s invalidity is incorrect – if they’re right that the patent is invalid, we never even have this discussion.) I can’t come up with a case in which a defendant has successfully made and won such an argument (“there’s no infringement because the patent was invalid during the relevant periods of time”), although if anyone reading this has any suggestions, I’d love to see them! Looking at the procedural history of the Moitie case, it seems like that kind of convoluted backstory would be required to make judges take such an argument seriously – the normal pendency of litigation from the trial court to the appeals court probably wouldn’t be sufficient. Relatedly, though, Tim Holbrook filed an amicus brief in this case on behalf of several law professors arguing that the good faith belief in invalidity should immunize the infringer only as to past damages, but not to prospective relief, once their belief is revealed to be incorrect. So there are certainly people thinking and proposing creative solutions along these lines!
“… a defendant who has knowledge of a patent’s existence but believes it to be invalid may still be held liable for inducing its infringement …” I don’t see what would be so unusual in holding someone liable who infringes on a patent because he/she thinks it was invalid. Other than invalidity (if we could call it that in this case) due to the statute of limitations/patent has “run its course” any patent that has been granted and not yet lapsed should be considered valid. Or why do we grant patents in the first place? Otherwise anyone might set up an internal memo showing how he/she (erroneously) came to such a “conclusion”, then start infringing and later hope to get away with it because a lot of patent infringement might escape notice of patent holders anyway. . The risk of suing such infringers would be astronomical if anyone could try the defense of “oh, we believed it was invalid”. At least there should then be an arbitration and resolution mechanism at the patent office where such “beliefs” should be registered in advance and also automatically be brought to the notice of all stakeholders.