prejudicial treatment : CAFC Alert

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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