Solicitor General Tells Supreme Court That You Can Infringe Invalid Patent

[Mike]

Nine years ago, the US Supreme Court ruled in the Grokster case in favor of the movie studios, effectively expanding copyright law to include an "inducement" standard that is not present in the actual text of the law (in fact, Congress had just rejected an attempt to add some inducement language to copyright law in the form of the INDUCE Act). A big part of the reasoning by the Supreme Court was to pull from the inducement standard that was found in patent law, and say it applies to copyright law:

For the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule, the inducement rule, too, is a sensible one for copyright. We adopt it here, holding that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.

It's worth noting that the lawyer who represented the studios in the Grokster case was... Donald Verrilli, a favorite lawyer of both the MPAA and RIAA in cases that involved expanding copyright law. After President Obama was elected, Verrilli was tapped for the Justice Department and then to be Solicitor General -- basically the White House's lawyer for the Supreme Court.

Given all that, it's perhaps no surprise, even if it's disappointing, to see that Verrilli is still pushing to massively expand the nature of inducement. In a long and ongoing patent infringement case, Commil v. Cisco, the appeals court for the federal circuit (CAFC) ruled last year that the lower court had erred in jury instructions concerning whether or not Cisco was guilty of "inducing" patent infringement, because the jury instructions said that Cisco could be guilty since "Cisco knew or should have known that its actions would induce actual infringement." CAFC said that the "should have known" part was problematic, because that's a negligence standard which isn't appropriate here. Commil appealed on that point (there are other points being appealed, but let's stick to that one). Back in May, the Supreme Court asked Verrilli if he wanted to weigh in, and a few weeks ago he did.

Take a guess what he argued? Yup. He argued that the Supreme Court should take the case and overturn the CAFC ruling (something we normally appreciate, but not this time), as he apparently believes a very broad definition of inducement is absolutely fine. That this would further help a bunch of his former clients goes unstated.

The court of appeals erred in holding that a defendant’s good-faith belief that the patent in question is invalid is a defense to inducement liability under Section 271(b). That holding is inconsistent with the Patent Act’s text and structure, and it may undermine Section 271(b)’s efficacy as a means of deterring and remedying infringement. This Court’s review is warranted.

Got that? That's Verrilli, using the power of the US government behind him, to argue that you can still be found guilty of "inducing infringement" even if you have a "good faith belief" that the underlying claim is totally invalid. The filing relies heavily on a different case, the Global-Tech v. SEB, which had found that in order to induce infringement you had to actually know that the action was patent infringement. By any rational discussion, that ruling should support Cisco's argument, that a good faith belief in invalidity shouldn't lead to inducement. But Verrilli spins in the other way.

As explained above, Global-Tech does not resolve whether the defendant must know in addition that the induced conduct actually infringed the patent. But regardless of how that question is ultimately decided, Section 271(b) neither requires knowledge of the patent’s validity nor suggests that a good-faith belief in invalidity is a proper defense. The inducee’s unauthorized performance of all steps of a patented method constitutes "infringement," even if the patent is ultimately found to be invalid. Thus, even if Section 271(b) is held to require proof that the defendant knew the induced conduct would constitute actual "infringement," the defendant’s good-faith belief in the invalidity of the patent would not suggest that such knowledge was lacking.

Even more unfortunately, Verrilli attacks the point that CAFC makes that you can't infringe on an invalid patent. CAFC noted "it is axiomatic that one cannot infringe an invalid patent." Nuh-uh, claims Verrilli. Of course you can infringe on an invalid patent:

A patent is infringed, regardless of its validity if the defendant has practiced all of its elements without authorization.

He says all invalidity does is "preclude liability from that infringement." Got that? Even if the patent is totally invalid, you can still infringe on it, you just can't be held liable for it. Welcome to upside down world -- where infringement is the standard, and not infringing on an invalid patent is some sort of exception or defense against liability.

There's a lot more in there, but he seems particularly upset that the CAFC ruling might actually lead to more defendants pointing to a good faith belief that they weren't infringing as a defense (and even cites the Grokster case). Instead, it seems he (and by his voice, the power of the US executive branch) believes that even if you're totally sure that a patent is invalid, you can still be found guilty of inducing infringement of it. If his theory is true, it actually seems like a huge indictment of just how ridiculous patent law is that such a result is considered possible, let alone reasonable.

Originally Published: Mon, 27 Oct 2014 16:00:32 GMT
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