induced infringement : CAFC Alert

Federal Circuit Restricts ITC Remedies for Induced Infringement

John Kong | January 14, 2014

Suprema and Mentalix v Int’l Trade Comm’n – CAFC Opinion

Decided December 13, 2013

Prost; O’Malley; Reyna.  Opinion by O’Malley; Dissent by Reyna.

 

Summary:

The CAFC found that the ITC cannot issue an exclusion order based solely on induced infringement under circumstances in which the underlying direct infringement of an asserted method patent necessarily does not take place until after importation of the contested article.  Where direct infringement does not exist or occur before or during importation, the ITC does not have the authority to remedy acts of induced infringement alone, under such circumstances where direct infringement of the claimed method of the asserted patent occurs post-importation: the imported goods are not, in and of themselves, infringing articles before or while they are being imported into the U.S.  While the Court’s majority emphasizes the circumstance-specific implications of its decision, the dissenting opinion by Circuit Judge Reyna raises concern that the distinctions articulated by the Court would, in effect, overturn decades of practice by the ITC conducting Section 337 investigations into respondents who actively induce post-importation infringement by their products, and similarly allow for infringers to circumvent ITC authority, accordingly.


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CAFC Raises the Bar Higher Against Patentees Asserting Induced Infringement Claims: Enabling Defendants to Introduce “Good Faith” Invalidity Arguments

Stephen Parker | July 3, 2013

Commil USA, LLC v. Cisco Systems, Inc.

June 25, 2013

Panel:  Prost, Newman and O’Malley.  Opinion by Prost.  Concurrences-in-part by Newman and O’Malley.

Summary

In this case, Commil USA, LLC (Commil) sued Cisco Systems, Inc. (Cisco) for infringement of U.S. Patent No. 6,430,395 directed to a wireless system.  In separate trials, the district court held that Cisco directly infringed the ‘395 patent and that Cisco infringed the patent by virtue of “inducement” of infringement.   Commil was awarded damages of $3.7 million for the direct infringement and of about $74.0 million for the induced infringement.   On appeal, the CAFC vacated the induced infringement award and ordered a new trial for the inducement claims on the basis that both 1) the trial court erred in instructing the jury as to the specific intent required for finding inducement – i.e., requiring an actual knowledge of infringement or a willful blindness (standards higher than mere negligence or recklessness) – and 2) the trial court erred in not considering evidence pertaining to Cisco’s good faith belief that the ‘395 patent was invalid as evidence that Cisco did not have the specific intent required for finding inducement.  While the CAFC had previously held that a good faith belief of non-infringement was evidence weighing against the specific intent for finding inducement, this case is the first instance in which the CAFC has held that a good faith belief of invalidity was similar evidence.  In a concurring-in-part opinion, Judge Newman criticizes the majority’s position that a good faith belief of invalidity weighs against the specific intent for finding inducement.     
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CAFC pointers on proving lack of “substantial non-infringing uses” in pleading contributory infringement

Le-Nhung McLeland | June 20, 2012

Toshiba Corporation v. Imation Corp.

Jun 11, 2012

Panel:  Dyk, Schall, and Moore.  Opinion by Moore.  Dissent by Dyk.

Summary:

(1)   Grant of summary judgment of non-infringement as to contributory infringement of ‘751 patent affirmed because plaintiff did not meet burden of proof that there was a lack of substantial non-infringing uses.

(2)   Grant of summary judgment of non-infringement as to induced infringement of ‘751 patent vacated because district court erred as a matter of law in holding that the existence of a substantial non-infringing use precludes a finding of induced infringement.

(3)   Grant of summary judgment of non-infringement of ‘966 patent vacated because it was based on erroneous claim construction.

(4)   No clear “take away” on claim construction from discourse between majority and dissent.


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