A Good-Faith Belief in Patent Invalidity: A Good Way to Cheat

A Good-Faith Belief in Patent Invalidity: A Good Way to Cheat

Patent infringement is strict liability.  In contrast to many other fields of law, if one infringes another’s patent, he is liable no matter if he invented the product separately or truly believed that his product was different in a substantial way.  Scienter is irrelevant for patents.With the rise in high-technology method patents, many times the infringers will not be producers of goods, but the end-users themselves.  However, makers of products that give the means to others to perform the steps of another’s patent can still be liable.  This is referred to as “inducement” and comes from 35 U.S.C. § 271(b).  Relying on precedent and statutory interpretation, the Supreme Court held that “induced infringement under § 271(b) requires knowledge that the induced acts constitute patent infringement.” Global-Tech Appliances v. SEB, 131 S. Ct. 2060 (2011).  This means that strict liability drops out if an inducer sells a product that by its very function induces a consumer to practice another patent (e.g. a computer program that practices a patent, but which has to be activated by a user).

Last year, the Federal Circuit in Commil v. Cisco, 720 F.3d 1361 (Fed. Cir. 2013) eliminated the possibility that a lower mens rea (reckless or negligence) could suffice for induced patent infringement.  Of more importance, however, the court held against the dissent that “evidence of an accused inducer’s good-faith belief of invalidity may negate the requisite intent for induced infringement.” Id. at 1368.

So, that is where the law stands.  If one practices the steps of a patent, he is liable for infringement.  If one sells a product that requires the consumer to practice the steps, he is liable as an inducer only if he knows that those steps amount to infringement.  Even this knowledge, however, may be insufficient if he had a “good-faith belief” that the patent will be found invalid.

There are two views one can take on this subject.  The first is, “Good! It stands to reason that one can’t infringe an invalid patent, so how could you induce another to something that you don’t think is possible?”  The other one, adopted by Solicitor General Verrilli, is “Bah! Inducement is for doing, not infringing! Patent infringement is strict liability! Having a good-faith belief in invalidity is like having a good-faith belief you can hire a good lawyer and invalidate the patent on other grounds.” Commil filed for cert., the Court requested the opinions of the Solicitor General, and he submitted his amicus curiae on October 16^th.  In it, he adopts just such a position (but with fewer exclamation points).

In Commil, Judge Prost claimed “[i]t is axiomatic that one cannot infringe an invalid patent.” Id. at 1368. While technically true, technical truths often obscure substantial ones. In Commil, the patent was found valid! The invalidity question should have stopped there, and the inducers’ liability should have been measured by whether they induced the steps of the patent (which a jury found they did). By tossing out an irrelevant, albeit rhetorical quip like that, the judge muddied the whole issue. He is not, however, without supporters. Those, however, are likely reformers who want to weaken the patent (and copyright) systems rather than decide issues based on what the law is.

A patent sets the metes and bounds of an idea.  It’s like the Oklahoma land rush every day that never ends.  The first person to find an idea gets claim to it for twenty years.  For that time, the land isn’t on rent; it’s a present interest in a future estate by the one who discovered it.  The purpose of providing this “free” land is that we want to inspire others to “settle” the frontier of new ideas (I’m not sure where the displaced Native Americans fit into this metaphor, but let’s take the Disney version for now. Sorry.). I’m reminded of that wonderful movie with Tom Cruise, Far and Away.  In it, all the settlers are stationed at the starting line, waiting for the U.S. Marshal to signal they can go.  One sooner jumps the gun by three seconds, and instead of asking whether he had a “good-faith” belief that he wasn’t trespassing, they just shoot him.

As it is with such rich soil and the public interest therein, new ideas are so valuable to us that we demand people play by the rules, very strictly.  While there are not yet likely many advocates of capital punishment for patent infringement, there are those that understand the rules must be respected. Avoidance of liability for inducing infringement given a “good-faith” belief in a court’s eventual finding that it was invalid (even when it turns out that it was) is as antithetical to the monopoly it represents as allowing “good-faith” belief exemptions for other strict-liability offenses.  “Officer, I had a good-faith *hic* belief that it would turn out *hic* your breathalyzer wasn’t calibrated *hic* properly.”

Hopefully, the Supreme Court will fix this erosion of patent rights. The damage has already spread.  In France Telecom v. Marvell Semiconductor last month a jury awarded damages for direct infringement, but not for induced infringement of the same patent.  The jury instructions included, under Inducing Infringement: “Marvell … was aware of the patent and believed that its actions would encourage the infringement of a valid patent,” to which the jury voted no.  Many, many other companies bought licenses to the technology.  The one hold out (Marvell) found it more profitable to roll the dice on infringement because they would be merely inducing infringement.  It is now more profitable to steal first, then ask questions later.