Commil USA, LLC v. Cisco Systems, Inc.

In February 2011, the District Court for the Eastern District of Texas decided the patent infringement case Commil USA, LLC v. Cisco Systems, Inc.  Commil USA, LLC (“Commil”) owns a patent on a method for implementing short-range wireless networks.  Commil sued Cisco Systems, Inc. (“Cisco”) for infringing its method and inducing, or causing, its customers to infringe Commil’s method.  As defenses, Cisco challenged Commil’s patent for indefiniteness, lack of enablement, and lack of written description.

At trial, Cisco objected to the district court’s induced infringement jury instruction.  The instruction recited verbatim the Federal Circuit’s language in Manville Sales Corp. v. Paramount Sys., Inc., 917 F.3d 544 (Fed. Cir. 1990), which included a negligence standard: “the alleged infringer’s actions induced infringing acts and that he knew or should have known his actions would induce actual infringements.”  Id. at 553 (emphasis added).  Cisco argued that this instruction has been superseded by the Supreme Court’s decision in Global-Tech Appliances, Inc. v. SEB S.A., 131 S.Ct. 2060 (2011).

In Global-Tech, the Supreme Court clarified the intent level required for “actively induc[ing] infringement of a patent.”  The Court concluded that there could be a finding of knowledge when there was a “known risk” that the induced acts are infringing.  The Court also determined that willful blindness applied, requiring that the inducer make active efforts to avoid knowing about the infringing conduct.  However, the district court overruled Cisco’s objection and recited the Manville Sales standard.  The district court found for Commil and awarded $63.7 million in damages.

Cisco appealed to the U.S. Court of Appeals for the Federal Circuit arguing that the trial court erroneously instructed the jury that the standard for inducement was negligence and did not allow Cisco to submit evidence that it had a good-faith belief that Commil’s patent was invalid.  Ultimately, the Federal Circuit reversed the district court, finding the jury instruction to be legally erroneous under Global-Tech.  It held that the standard for induced infringement is actual knowledge or willful blindness.  Therefore, a good-faith belief of patent invalidity is a defense to claims of induced infringement.

The U.S. Supreme Court granted a write of certiorari in December 2014.  The Court will decide whether the Federal Circuit erred in holding that a defendant’s good-faith belief that a patent is invalid is a defense to induced infringement under 35 USC §271(b).  The Court will hear oral arguments on March 31, 2015.