StevenParker : 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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CAFC Allows Willful Infringer to Continue Infringements for an “Ongoing Royalty” Due to “the Public’s Interest to Allow Competition in the Medical Device Arena”

Stephen Parker | February 16, 2012

Bard Peripheral Vascular, Inc., et al. v. W.L. Gore & Associates, Inc.

February 10, 2012

Panel: Gajarsa, Linn and NewmanOpinion by Gajarsa.  Dissent by Newman.

Summary

This decision concludes a forty-year-long story that began in 1973 between two cooperating individuals that independently filed patent applications for vascular grafts in 1974.  Those applications went to interference in 1983 and have been the subject of ongoing litigation since, concluding now in the current CAFC decision.  The Arizona district court from which the present case was appealed expressed that this was “the most complicated case the district court has [ever] presided over.”  In this case, the Gore inventor was the first to both 1) conceive of the invention and 2) file a patent application in 1974 (i.e., filing 6 months prior to the Bard inventor), but Gore lost in an interference before the Patent Office.  Now, Gore is found to be willfully infringing the patent that was awarded to Bard, and is subjected to doubled damages (i.e., totaling $371 million) and attorney’s fees (i.e., totaling $19 million).  However, despite these findings, the CAFC allows Gore to continue infringing, declining a permanent injunction and awarding reasonable royalties in the amount of between 12.5% to 20% for future infringements due to the weight of “the public interest to allow competition in the medical device arena.”


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