Supreme Court Rules In Favor of Patent Troll

An anonymous reader writes: The Supreme Court ruled today (PDF) that Cisco Systems can't skip out of a patent suit against them from patent troll Commil USA. The case reached the Supreme Court because Cisco argued it had a "good faith belief" that the patent they were infringing was invalid. The justices voted 6-2 that such a belief didn't matter if they were indeed infringing. The Supreme Court's opinion is that a company must know of the patent it's infringing, and that their product infringes upon the patent — which, at least, is more than what Commil was pushing.

The case isn't completely over — a $63.7 million verdict in Commil's favor was overturned by an Appeals Court, and now the Supreme Court has sent it back down for re-evaluation after it clarified the rules of infringement. The Appeals Court could still overturn the judgment for some other reason. The good news is that the Supreme Court dedicated a page in their opinion to telling lower courts how to sanction patent trolls and keep them from clogging the courts with ridiculous claims. "[I]t is still necessary and proper to stress that district courts have the authority and responsibility to ensure frivolous cases are dissuaded."

Comments

Re:I don't understand Scalia's logic here.

[BitterOak]

The logic the majority used in ruling on this case seems pretty simple (unless I'm totally off): the patent troll had a patent that was still legally valid because there had been no court challenge to declare it invalid. Because the patent was still legally valid, the infringement of the patent is still a valid cause of action in a lawsuit.

Scalia's logic is that you can bypass a legal challenge over a patent that might be ruled invalid in court because it was never valid in the first place. The question is, though, how would you know whether the patent is valid without the court saying so?

But there are two separate types of infringement at issue here. First is direct infringement. This occurs when the defendant actually violated the patent him or herself. This is a strict liability offense, meaning that it doesn't matter if the defendant was aware of the patent or not, and it doesn't matter if the defendant was aware that his or her actions infringed the patent or not. And if the patent has not been declared invalid, it is presumed valid and the defendant is liable for damages even if the patent is later ruled invalid. This is well-established law and is not at issue in the Supreme Court's decision.

The other type of infringement is induced infringement. This occurs, for example when a defendant sells a product which would cause the end users to violate the patent. The defendant is not violating the patent directly. According to patent law, for a defendant to be liable for induced infringement, he or she must be aware of the patent and also aware that the usage of the product would be a violation of that patent. So the question before the Supreme Court was in the case of induced infringement, what if the defendant had a good faith reason to believe the patent to be invalid? I tend to agree with the majority here: if the patent wasn't declared invalid by a court, the usage of product would be infringing, so the defendant must have known that such usage would be infringing, since they knew of the patent. The dissenters (Scalia and Ch. J. Roberts) thought otherwise: if a patent is invalid, how can the defendant believe it to be infringed?

Re:I don't understand Scalia's logic here.

[Theaetetus]

So the question before the Supreme Court was in the case of induced infringement, what if the defendant had a good faith reason to believe the patent to be invalid? I tend to agree with the majority here: if the patent wasn't declared invalid by a court, the usage of product would be infringing, so the defendant must have known that such usage would be infringing, since they knew of the patent. The dissenters (Scalia and Ch. J. Roberts) thought otherwise: if a patent is invalid, how can the defendant believe it to be infringed?

Add to this the fact that the "good faith belief" is a really low bar, and simply means you found an amenable patent attorney to draft an invalidity opinion letter for you. If they're right, the patent is invalid and you owe nothing. If they're wrong - under the previous state of the law - you believed it was invalid and didn't intend to infringe and owe nothing.
Which basically boils down to, "pay an attorney $10k for an opinion memo, and get out of infringement scot free." It's a good loophole to close.

Disclaimer: I am a patent attorney and have done opinion letters. Mine were totally legit, though.