‘Inducement’ to patent infringement may exist in the US with the delivery of products to a business, which in its turn infringes the patent in the US with these products.
In itself, this is often not a ground for liability on the part of the supplier if the product itself does not infringe the patent, or the product is delivered outside the US. Things are different, however, if the supplier induces the infringement: in that case, for example, delivery outside the US can lead to liability in the US.
American case law rules that the supplier can defend itself against such claims by proving that it was unaware of any infringement, or believed that there was no infringement. The court below the Supreme Court had decided that this also meant that a belief in good faith of the invalidity of the patent was a defence.
In the case of Commil vs Cisco, the Supreme Court repealed this decision: a belief in the invalidity of the patent is not a defence against an accusation of inducement to patent infringement. Cisco can therefore be liable due to the delivery of communication equipment for Wi-Fi to customers who infringe the patent, even though Cisco believed that the patent was invalid.
The role of ‘belief’ in patent infringement
The Supreme Court began by emphasising that the fact that the infringing party did not know of the patent or did not know that the patent was being infringed cannot be used as a defence against direct patent infringement. Direct patent infringement by a party exists in the event of production, use or sale in the US. Under certain circumstances, in that case an ignorance of the infringement can at the very most be used as a defence against liability for damages with retroactive effect.
This is different, however, where there is an accusation of ‘indirect patent infringement’: delivery of parts that in essence have a contributory infringement and an inducement to patent infringement. In that case, the knowledge of the indirect infringer plays a role. If this infringer was unaware of the patent, for example where an incorrect interpretation of the scope of protection being claimed led it to believe there was no infringement, this is a defence in the US against a claim of indirect patent infringement. The Supreme Court had previously ruled that such a defence will not fail even if the indirect infringer should have been aware of the infringement.
On this basis, the court below the Supreme Court had concluded that a belief in good faith that the patent was invalid was also a defence in the case of an indirect patent infringement. After all, it is not possible to infringe an invalid patent. However, this was a step too far for the Supreme Court. The parties must lawfully assume that patents are valid, and if they find that this is not the case, they must apply to the US patent office, for example, for a decision. If they lose, as did Cisco, the fact that Cisco had reasonable arguments to believe that the patent was invalid is no defence.