Posts Tagged: "induced infringement"

The Court agreed, noting testimony from Cisco’s engineer who stated that the system needed only one copy of the protocol to support all devices. Commil’s expert opined that the protocol was a state machine, and since Cisco’s devices tracked separate information regarding their communication states, each communication state represented a copy of the protocol that was unique. The Court disagreed, finding that tracking separate states for each device was not substantial evidence that each device ran a separate copy of the protocol.

The Supreme Court recently decided to review a pair of cases that challenge the Federal Circuit’s willful infringement test. The two cases, Halo Electronics, Inc. v. Pulse Electronics, Inc, (14-1513) and Stryker Corporation v. Zimmer, Inc. (14-1520), are drawing comparisons from commentators to the Court’s Octane Fitness, LLC v. ICON Health and Fitness, Inc. ruling last term based on the similar structure of the tests and statutory language reviewed in both cases. However, another recent SCOTUS case dealing with induced infringement, Commil USA, LLC v. Cisco Systems, Inc., may also shed some light on how the Court will think about willful infringement, since both doctrines center around the defendant’s intent.

The United States District Court for the Southern District of Indiana ruled in favor of Eli Lilly (NASDAQ: LLY), issuing a final judgment in the Hatch-Waxman infringement litigation relating to U.S. Patent No. 7,772,209. This matter arose as the result of the defendants’ filing of Abbreviated New Drug Applications (ANDAs) with the Food and Drug Administration (FDA). The ‘209 patent, covering a method of use, protects the co-administration of pemetrexed disodium with two nutrients – folic acid and vitamin B12, which protects against the side effects of the drug Alimta®. The district court found direct infringement by administering physicians under § 271(a), and thus inducement of infringement by Defendants under § 271(b).

Reversing the panel en banc, the Federal Circuit found that the ITC does have jurisdiction to issue an exclusion order predicated on induced infringement. Under Chevron step two, the Court deemed that the ITC’s interpretation of Section 337 was reasonable because it was “consistent with the statutory text, policy, and legislative history of Section 337,” as “Section 337 contemplates that infringement may occur after importation.” Further, the panel’s interpretation of Section 337 would unnecessarily “eliminate relief for the unfair trade act and induced infringement” by allowing foreign entities “to circumvent Section 337 by importing articles in a state requiring post-importation combination or modification before direct infringement could be shown.”

JVC is a member of two licensing pools for optical disc technology, one for DVD and one for Blu-ray. The asserted patents are included in both pools. The district court adopted JVC’s position that the asserted patents are essential to the licensed DVD and Blu-ray optical discs. Given the patent pool and licensing program, which covers any and all optical disc structures and uses that are essential under the patents, only the use of unlicensed optical discs would be an infringement – regardless of any third-party software used to manipulate the discs. JVC did not argue, and no evidence of record established, that unlicensed discs should be attributed to Nero, or the patent pool license should not encompass discs and end-users that implemented the Nero software.

There can be little doubt of the exceptional importance of Akamai Technologies, Inc. v. Limelight Networks, Inc. to the intellectual property community, and to innovators as a whole. The issue of joint infringement has been the focus of much discussion in recent years by academia, the media, and industry. In its 2014 remand of this case, the Supreme Court suggested this Court would have the opportunity to “revisit the § 271(a) question if it so chooses,” 134 S. Ct. 2111, 2120 (“Akamai III”). The AIPLA, as amicus curiae, argues that the Federal Circuit should choose to do so by rehearing the case en banc because the single entity rule as set out by the Panel majority would make it nearly impossible for certain patent holders to enforce their patents against joint infringers.

In both theories of indirect patent infringement (i.e., inducement of patent infringement and contributory infringement), the patent owner must show that the defendant knew its activities were infringing. If the defendant can prove that it did not have such belief then it is a valid defense to indirect infringement. In Commil, the defendant went a step further and contended that it was not liable for inducement of infringement, arguing that it is axiomatic that one cannot infringe an invalid patent and it had a good faith belief that the patent at issue was invalid. The defendant mixed infringement and invalidity together. In the opinion, the Supreme Court placed a wall between the theories of infringement and invalidity and held that the mental state of the defendant as to the patent’s invalidity has no bearing on whether it thought its acts were infringing.

The issue considered by the Supreme Court was whether a good faith belief of patent invalidity is a defense to a claim of induced infringement. In a 6-2 decision written by Justice Kennedy, the Supreme Court ruled that belief of invalidity is not a defense to a claim of induced infringement. While it seems that the Supreme Court issued a reasonable decision in this case it is deeply troubling how little the Supreme Court actually knows about patent law. In addition to repeatedly discussing the validity of the Commil patent, rather than the validity of the patent claims, the Supreme Court also seemed to suggest that Cisco could have relied on a procedural challenge to the Commil patent that simply wasn’t available as an option at any relevant time during the proceedings.