Supreme Court - Commil USA, LLC v. Cisco Systems - Belief of Patent Invalidity No Defense to Induced Infringement Claim

In Commil USA, LLC v. Cisco Systems, the US Supreme Court held that a defendant's belief that a patent is invalid is not a defense to a claim it induced infringement.

Commil USA, LLC, the owner of a patent relating to a method of implementing wireless networks, had sued Cisco Systems, Inc., for making and selling wireless networking equipment that directly infringed and for inducing others to infringe the patent by selling them infringing equipment.

Cisco was found liable for direct and induced infringement, but had raised the defense to induced infringement that it had a good-faith belief Commil’s patent was invalid. The trial court ruled evidence to show the belief inadmissible. On appeal, the Federal Circuit stated the trial court erred in excluding Cisco’s evidence of its good-faith belief.

The Supreme Court has had a pattern of reversing the Federal Circuit in recent years, and this case was no different. It held a defendant’s belief that a patent is invalid is not a defense to a claim of induced infringement. Induced infringement under 35 U. S. C. §271(b) only applies when a defendant knew of the patent and that the induced acts constitute infringement. Similarly, contributory infringement under 35 USC §271(c) requires knowledge of the patent and knowledge of patent infringement.

This contrasts with direct infringement under 35 USC §271(a), which is a matter of strict liability where the defendant’s mental state is irrelevant.

The Supreme Court reminded that Global-Tech requires knowledge that the induced acts constitute patent infringement and that the defendant's actions demonstrated it knew it would be causing customers to infringe patent.

The Supreme Court said induced infringement and validity are separate defenses, and said it was unwilling to undermine the presumption that a patent is valid under 35 USC §282(a) proof otherwise must rebut the presumption by clear and convincing evidence. See Microsoft Corp. v. i4i Ltd. Partnership.

The Supreme Court noted accused inducers who believe a patent is invalid can seek ex parte reexamination of the patent by the USPTO and that district courts can dissuade frivolous suits by sanctioning attorneys, e.g., under Rule 11 or awarding attorney fees under 35 USC 285.

Copyright © 2015 Robert Moll. All rights reserved.

Federal Circuit - Akamai Technologies, Inc. v. Limelight Networks, Inc. - Infringement by Inducement Requires Direct Infringement

In Akamai Technologies, Inc. v. Limelight Networks, Inc. the Federal Circuit held that the patent owner Akamai failed to prove infringement by inducement by Limelight, because Akamai failed to show direct infringement.

The Federal Circuit held that direct infringement only occurs when a single party or a joint enterprise performs all of the steps of the method. Further, encouraging or instructing others to perform an act is not the same as performing the act and will not result in direct infringement. Instead, multiple entities must be in a principal-agent relationship, a contractual arrangement, or in a joint enterprise.

This case relates to U.S. Patent No. 6,108,703 (the '703 patent). It describes an invention that, among other thing, stores web pages at the content provider (web site) and stores their embedded objects at another domain closer to the client. This is one of inventor Daniel Lewins' contributions to the Web: store popular web pages at the web site so hits can be tracked, but store their embedded objects at domains closer to the browsers to reduce page latency.

Claim 19 of the '703 patent recites a content delivery service, comprising:

• replicating a set of page objects across a wide area network of content servers managed by a domain other than a content provider domain;
• for a given page normally served from the content provider domain, tagging the embedded objects of the page so that requests for the page objects resolve to the domain instead of the content provider domain;
• responsive to a request for the given page received at the content provider domain, serving the given page from the content provider domain; and
• serving at least one embedded object of the given page from a given content server in the domain instead of from the content provider domain.

Limelight performed all the steps of claim 19 except for the step of "tagging the embedded objects of the page so that requests for the page objects resolve to the domain instead of the content provider domain," which it encouraged customers perform.

Such is insufficient, and the Federal Circuit explained: "In the present case, the asserted claims were drafted so as to require the activities of both Limelight and its customers for a finding of infringement. Thus, Akamai put itself in a position of having to show that the allegedly infringing activities of Limelight’s customers were attributable to Limelight. Akamai did not meet this burden, because it did not show that Limelight’s customers were acting as agents of or otherwise contractually obligated to Limelight or that they were acting in a joint enterprise when performing the tagging and serving steps. Accordingly, we affirm the district court’s grant of Limelight’s motion for JMOL of non-infringement under § 271(a)."

In general, a method claim should be written so that a single entity performs each step to avoid the requirement that the multiple entities that perform the claim be in a principal-agent relationship, a contractual arrangement, or in a joint enterprise.

Copyright © 2015 Robert Moll. All rights reserved.

US Supreme Court - Oral Argument Transcript Commil USA v. Cisco Systems

The US Supreme Court heard oral arguments in Commil USA, LLC v. Cisco Systems.

The issue in Commil USA: Whether the Federal Circuit erred in holding that a defendant's belief that a patent is invalid is a defense to induced infringement under 35 U.S.C. § 271(b).

Here's a PDF copy of the transcript of the oral arguments.

Copyright © 2015 Robert Moll. All rights reserved.

US Supreme Court - Oral Arguments in Kimble v. Marvel and Commil USA v. Cisco Systems on March 31

On March 31, the US Supreme Court hears oral arguments in the patent cases: Kimble v. Marvel Enterprises and Commil USA, LLC v. Cisco Systems.

The issue in Commil USA: Whether the Federal Circuit erred in holding that a defendant's belief that a patent is invalid is a defense to induced infringement under 35 U.S.C. § 271(b).

The issue in Kimble: Whether this Court should overrule Brulotte v. Thys Co., which held that "a patentee's use of a royalty agreement that projects beyond the expiration date of the patent is unlawful per se."

The SCOTUS blog will be live blogging the oral arguments at 9:45 am ET.

Copyright © 2015 Robert Moll. All rights reserved.

Supreme Court - Commil USA, LLC. v. Cisco Systems - Is Defendant's Good Faith Belief of Patent Invalidity A Defense to Induced Infringement?

Yesterday, the US Supreme Court granted Commil's petition for certiorari to review the Federal Circuit decision in Commil USA, LLC v. Cisco Systems Inc.. There the Federal Circuit held a defendant's good-faith belief a patent is invalid is a defense to induced infringement under 35 USC § 271(b). The Federal Circuit stated it could "see 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."

Generally, a defendant can be liable for actively inducing (encouraging) infringement: (1) if the party induced directly infringes a patent claim; and (2) if the defendant has specific, knowing intent to encourage infringement of the patent claim which is more than intent to cause acts later held to infringe. Intent can be proven through circumstantial evidence or deliberate indifference to a known risk a patent exists.

Cisco Systems' brief in opposition

Solicitor General's brief

Copyright © 2014 Robert Moll. All rights reserved.

Supreme Court Grants Review of Joint Infringement in Limelight Networks v. Akamai Technologies

On January 10, 2014, the U.S. Supreme Court granted a petition for certiorari to review the judgment of the Federal Circuit regarding the issue of joint infringement in Limelight Networks, Inc. v. Akamai Technologies, Inc.

As background this case involves U.S. Patent No. 6,108,703 (the '703 patent), which relates to storing web pages at the content provider (web site) and storing their embedded objects at another domain closer to the client. This is one of inventor Daniel Lewins' contributions to the Web: store popular web pages at the web site so hits can be tracked, but store their embedded objects at domains closer to the browsers to reduce page latency.

Claim 19 of the '703 patent recites a content delivery service, comprising:

• replicating a set of page objects across a wide area network of content servers managed by a domain other than a content provider domain;
• for a given page normally served from the content provider domain, tagging the embedded objects of the page so that requests for the page objects resolve to the domain instead of the content provider domain;
• responsive to a request for the given page received at the content provider domain, serving the given page from the content provider domain; and
• serving at least one embedded object of the given page from a given content server in the domain instead of from the content provider domain.

Joint infringement arose in this case because direct infringement under 35 U.S.C. § 271(a) requires a single entity perform all of steps of the process claim. Limelight performed all the steps of claim 19 except for the step of "tagging the embedded objects of the page so that requests for the page objects resolve to the domain instead of the content provider domain," which it encouraged customers perform.

Perhaps Limelight thought given the law that it might escape infringement, because no single entity performed all of the steps as required for direct infringement under 35 U.S.C. § 271(a). In the past, liability for inducement of infringement 35 U.S.C. § 271(b) required a direct infringer. Nonetheless, Akamai successfully argued before the Federal Circuit that inducement did not require a direct infringer as long as a single entity induces the infringement such that all of the steps are performed by multiple entities.

So now the parties frame the issues this way: patent owners Akamai and MIT state the issue is whether a party may be liable for patent infringement under 35 U.S.C. § 271(a) or § 271(b) when two or more entities perform all of the steps of a process claim. Accused infringer Limelight Networks states the issue is whether the Federal Circuit erred in holding that a defendant may be held liable for inducing patent infringement under 35 U.S.C. § 271(b) even though no one has committed direct infringement under § 271(a).

The SCOTUS blog has more information at Limelight Networks, Inc. Akamai Technologies, Inc. and Akamai Technologies, Inc. v. Limelight Networks, Inc. regarding the proceedings, orders, and parties briefs. Also see Lisa McElroy of the SCOTUS blog for details on what a CVSG means in a non-US government case: "CVSG" in plain English

This case will impact the value of US patents relating to distributed computing (e.g., cloud computing).

Copyright © 2014 Robert Moll. All rights reserved.