Supreme Court Sides With Patent Trolls
from the bad-news dept
Well, this is unfortunate. Last fall, we wrote about yet another patent case being heard by the Supreme Court. This one (Commil v. Cisco) involved the question of whether or not a company could be found liable for "inducing infringement" when it believed that the patent in question was clearly invalid. The appeals court (CAFC) had overturned a lower court, saying that it was wrong for a judge to instruct a jury that Cisco could be found guilty of inducing patent infringement if it "knew or should have known that its actions would induce actual infringement." The big question was about the "should have known" part. Cisco argued -- and the CAFC agreed -- that the "should have known" statement created a negligence standard, which is not appropriate in such cases. Further, CAFC rightly pointed out that "one cannot infringe an invalid patent."Unfortunately, the Supreme Court has now mostly sided with the patent holder Commil, and said that believing a patent is invalid is no defense to an inducement claim in a patent infringement case. The reasoning -- in an opinion by Justice Kennedy -- is basically "infringement and validity are two separate issues." True... but... sorta misses the point. The Court, thankfully, didn't go quite as far as it could have gone in saying that you could induce infringement even without knowledge that something is infringing, but it rejected the idea that a belief the patent was invalid is a "defense" to an inducement claim. All because it insists that validity and infringement are two entirely separate issues.
When infringement is the issue, the validity of the patent is not the question to be confronted.But this presumption of validity is problematic in any real world scenario, and the ruling doesn't seem to care, focusing on the procedural issues of when certain arguments are made and who has the burden at what point:
To say that an invalid patent cannot be infringed, or that someone cannot be induced to infringe an invalid patent, is in one sense a simple truth, both as a matter of logic and semantics. See M. Swift & Sons, Inc. v. W. H. Coe Mfg. Co., 102 F. 2d 391, 396 (CA1 1939). But the questions courts must address when interpreting and implementing the statutory framework require a determination of the procedures and sequences that the parties must follow to prove the act of wrongful inducement and any related issues of patent validity. “Validity and infringement are distinct issues, bearing different burdens,different presumptions, and different evidence.” 720 F. 3d, at 1374 (opinion of Newman, J.). To be sure, if at the end of the day, an act that would have been an infringement or an inducement to infringe pertains to a patent that is shown to be invalid, there is no patent to be infringed. But the allocation of the burden to persuade on these questions, and the timing for the presentations of the relevant arguments, are concerns of central relevance to the orderly administration of the patent system.Right. But that means that anyone who is aware of what they know to be an invalid patent would first need to have the patent itself rejected before they can go on with their business, and that creates a huge hurdle to innovation.
But what's interesting is that the Supreme Court then delves into a discussion on the fact that this ruling has a big impact on patent trolling situations. First, from the opinion by Kennedy:
The Court is well aware that an “industry has developed in which firms use patents not as a basis for producing and selling goods but, instead, primarily for obtaining licensing fees.”... Some companies may use patents as a sword to go after defendants for money, even when their claims are frivolous. This tactic is often pursued through demand letters, which“may be sent very broadly and without prior investigation,may assert vague claims of infringement, and may be designed to obtain payments that are based more on the costs of defending litigation than on the merit of the patent claims.” ... This behavior can impose a “harmful tax on innovation.”....But, in the dissent, Justice Scalia rips into the practice, and (for the first time) calls out patent trolling as patent trolling, and notes that the majority ruling gives more power to patent trolls:
No issue of frivolity has been raised by the parties in this case, nor does it arise on the facts presented to this Court. Nonetheless, it is still necessary and proper to stress that district courts have the authority and responsibility to ensure frivolous cases are dissuaded. If frivolous cases are filed in federal court, it is within the power of the court to sanction attorneys for bringing such suits. Fed. Rule Civ. Proc. 11. It is also within the district court’s discretion to award attorney’s fees to prevailing parties in “exceptional cases.”...
I may add, however, that if the desirability of the rule we adopt were a proper consideration, it is by no means clear that the Court’sholding, which increases the in terrorem power of patent trolls, is preferable.Scalia also rips apart the arguments in the majority opinion:
Because only valid patents can be infringed, anyone with a good-faith belief in a patent’s invalidity necessarily believes the patent cannot be infringed. And it is impossible for anyone who believes that a patent cannot be infringed to induce actions that he knows will infringe it. A good-faith belief that a patent is invalid is therefore a defense to induced infringement of that patent.As for the fact that validity and infringement are different issues, Scalia simply notes:
That is true. It is also irrelevant. Saying that infringement cannot exist without a valid patent does not “conflate the issues of infringement and validity,” ... any more than saying that water cannot exist without oxygen “conflates” water and oxygen. Recognizing that infringement requires validity is entirely consistent with the “long-accepted truth . . . that infringement and invalidity are separate matters under patent law.”Scalia also trashes the idea that without this ruling it would undermine the presumption of validity. Not so, says Scalia, as it only would matter in cases where, in fact, the patent is not valid.
This presumption is not weakened by treating a good-faith belief in invalidity as a defense to induced infringement. An alleged inducer who succeeds in this defense does not thereby call a patent’s validity into question. He merely avoids liability for a third party’s infringement of a valid patent, in no way undermining that patent’s presumed validity.Either way, I think Scalia got this one right, and unfortunately the majority of the court went the other way. The Supreme Court had been making a bunch of good rulings on patent law lately, so I guess it was bound to issue a stinker eventually. The overall impact won't be as big as some of the other cases, and I guess it's nice to see that the Supreme Court absolutely recognizes that patent trolling problem, as that will be handy in future cases.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: inducement, patent trolls, patents, presumption of validity, supreme court, validity
Companies: cisco, commil
Reader Comments
Subscribe: RSS
View by: Time | Thread
Patent trolls already do everything they can to drop a case the second it looks like it might actually go to court(any court other than East Texas ones anyway), in large part to avoid having their junk patents ruled invalid, this will just give them one more reason to do so.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
Huh? If you believed that the statement to the jury was wrong, then you DISAGREE with the Supreme Court's ruling. You seem very confused.
[ link to this | view in chronology ]
Suppose you believed that a law banning you from speaking was unconstitutional (and it actually was). And so you speak. Then you're brought to court for breaking the law. In your defense you claim the law is unconstitutional, and it is established in court that it is actually the case, but they convict you anyway because you knowingly broke a law.
Now, combined with the logic from that previous case where they ruled that a non-existent law is probable cause for a police officer to stop and search you and the ability of cops to lie to you, we can now be arrested, convicted, and jailed for made up laws!
Cop pulls some one over.
Tells that person that its illegal to blink.
That person, not believing it's illegal to blink, blinks anyway.
Cop arrests them.
Goes to court where it's established that it's not illegal to blink.
But they convict you with intent to commit a crime because you knew about the 'law' against blinking.
[ link to this | view in chronology ]
Simple matter is, the judge acted inappropriately when he addressed the jury in the way that he did, which could be seen as influencing the jury in a manner that compromises the jury verdict.
This is undoubtedly why the supreme court ruled in favor of the patent troll. The judge overseeing the case should have known better.
[ link to this | view in chronology ]
Re:
And standing for the suit was gained exactly how?
[ link to this | view in chronology ]
Inducement requires intent - infringement does not.
[ link to this | view in chronology ]
I'm not saying that patent trolls are a good thing. I despise patent trolls but this is one of those rare cases where the judge in the case made a grievous error. He should never have injected his own opinions into his instructions to the jury and his remarks were biased.
Judges are not supposed to care who wins or loses, they are only to preside over the case and ensure everyone is following the rule of law and the rules of evidence. The judge simply made a bad decision and he got called out for it judging by the Supreme Court's decision.
[ link to this | view in chronology ]
Re:
Again, you seem to be totally incorrect. The judge's instructions FAVORED the patent holder, not the other way around as you claim. And the Supreme Court ruling sides WITH the lower court, not against it.
You're just wrong.
I'm not saying that patent trolls are a good thing. I despise patent trolls but this is one of those rare cases where the judge in the case made a grievous error. He should never have injected his own opinions into his instructions to the jury and his remarks were biased.
This has nothing to do with bias.
Judges are not supposed to care who wins or loses, they are only to preside over the case and ensure everyone is following the rule of law and the rules of evidence. The judge simply made a bad decision and he got called out for it judging by the Supreme Court's decision.
You don't seem to understand what this case was about. At all.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
I'm not saying that what the patent trolls are doing is right only that the judge made an error when he addressed the jury with his biases comments.
The fact that you're missing is that nobody can be held liable for what "MIGHT" happen in the future. Otherwise, everyone could be arrested for crimes that they'll commit in the future. The verdict in the original trial, added to the comments made by the judge, may very well be why the Supreme Court overturned the ruling by the lower court.
If we want to stop patent trolls, truly stop them, then write to your congressman and request that they do something to put a stop to this practice that patent trolls are engaging in.
[ link to this | view in chronology ]
Re:
You're mistaken. Very, very mistaken.
I give up. You simply appear unable to comprehend what you're posting about.
[ link to this | view in chronology ]
Re: Re:
That is the joy of the Internet - stupid is allowed to fly its freak flag high!
[ link to this | view in chronology ]
Idiot Judge....
If and only if the patent is valid, can the rest of any case move forward.
This should be the only way patent related lawsuits should move forward.
[ link to this | view in chronology ]
So, ...
Yay patent trolls! Yay Supreme Court!
[ link to this | view in chronology ]
[ link to this | view in chronology ]
The judge is not a plaintiff or a defendant in this particular case and yet he exposed his personal views to the jury.
What you're saying is that you agree with the judge. THAT is a biased view. If the plaintiff had proven his case, that would be one thing. But, the moment the judge exposed his personal views to the jury, he crossed the line. THAT is the point I'm trying to make here.
Patent trolls are an evil in this country that should be roped in. This problem has been escalating for such a long time that our government has failed to do anything to stop it. If a company owns a patent, then they shouldn't be able to sue if they don't make use of that patent. They exploit the laws of pour country because our elected representatives have failed to do anything to close those loopholes.
I'm not trying to argue with you over this but you fail to see the point I'm trying to make here. Fact is, business entities, people ... they cannot he held liable for conduct that MIGHT happen. What you're saying is that the patent troll should be held liable.
Once you've crossed that line, then you set a dangerous precedent with the point of view that individual people can also be held liable for conduct that might happen.
[ link to this | view in chronology ]
Re:
Of course they can, if the elements line up right. For example, if I take an action that a reasonable person understands as posing a substantial risk of serious injury to others, then I have committed the crime of "reckless endangerment" -- even if nobody got hurt.
[ link to this | view in chronology ]
Re:
Your understanding of this case is on par with your understanding of how to use the "reply to this" link. Just sayin'
[ link to this | view in chronology ]
Re:
'The appeals court (CAFC) had overturned a lower court, saying that it was wrong for a judge to instruct a jury that Cisco could be found guilty of inducing patent infringement if it "knew or should have known that its actions would induce actual infringement."'
Read those two things at least five times each. Now come to an understanding that the patent troll in this case is not Cisco, but Commil. Then finally realize that you have had the entire case backwards the whole time. OK?
Lower court: Cisco can be found liable for inducing infringement of a patent it believed to be invalid.
CAFC: No, it can't.
Supreme Court: Yes, it can.
Got it now?
[ link to this | view in chronology ]
Re:
No. He didn't. You have the entire thing backwards. Again. Even though this has already been explained to you. The judge sided WITH the patent troll in this case, not against. You're wrong. The appeals court reversed and then the Supreme Court sided with the troll.
And not because of "bias." Based on your own statements, you disagree with the SCOTUS, not agree with them.
[ link to this | view in chronology ]
Re: Re:
Maybe you should put that in big blue letters across the top of the article or something.
[ link to this | view in chronology ]
Re: Re: Re:
Then again, if this guy's not even responding to the title, then what IS he responding to? (No, I don't need an answer. Some things are best left unknown)
[ link to this | view in chronology ]
What else could be expected from the dumbest court in the land?
[ link to this | view in chronology ]