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Expanding Defenses To Inducing Infringement
On Oct. 25, 2013, the Federal Circuit, by a vote of six-to-five, denied rehearing en banc in Commil USA, LLC v. Cisco Sys., Inc., No. 2012-1042 (Oct. 25, 2013) (Commil II). That decision left intact the panel's holding, in a case of first impression, that an alleged indirect infringer's “good-faith belief of invalidity may negate the requisite intent for induced infringement.” Commil USA, LLC v. Cisco Sys., Inc., 720 F.3d 1361 (Fed. Cir. 2013) (Commil I). According to one dissenting opinion from the rehearing denial, the panel's majority opinion “created a new noninfringement defense to induced infringement,” premised on the accused infringer's subjective belief of patent invalidity. Commil II, slip op. at 2 (Reyna, J., dissenting).
Commil had filed suit in the Eastern District of Texas, accusing Cisco of infringing a patent directed to a method of providing improved communication for mobile devices moving between base stations. Commil alleged that Cisco directly infringed certain method claims and induced infringement of those claims by others. During the first jury trial, Cisco was found liable for direct infringement but not induced infringement, and Commil was awarded $3.7M in damages. Commil I, at 1365.
The district court granted Commil a partial new trial on the issues of indirect infringement and damages. Id. Before the start of the second trial, the district court ruled that Cisco could not present evidence of its good-faith belief of patent invalidity to rebut the allegation of induced infringement. Id., at 1367. During the second trial, the district court instructed the jury that it could find Cisco liable for induced infringement if it “actually intended to cause the acts that constitute direct infringement and that Cisco knew or should have known that its actions would induce actual infringement.” Id., at 1366. The jury returned a verdict in favor of Commil on induced infringement, and awarded $63.7 M in damages. Id., at 1365.
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