S. Ct. Rules that a “Good-Faith Belief” is no Defense to Patent Infringement Liability
Tuesday, June 02 2015 @ 02:47 PM CDT
Contributed by: Andy Updegrove
Most engineers are aware that patent owners can sue those that infringe their patents. It may surprise them, however to know that a patent owner can also sue someone for only “inducing” another to infringe their patent. Luckily, in both cases, the patent owner only has a right to sue if the other party acted “knowingly.”
As you might expect, the circumstances and facts that are deemed to prove knowledge are the subject of much litigation and many legal opinions. Recently, the U.S. Supreme Court added another decision to the pile, and a distinction that the court drew on this question may surprise you. It should also particularly concern open source software developers, for reasons I’ll return to below.
The case is Commil USA LLC, Inc. (No 13-896), and at issue was the question whether a defendant that believed, in good faith, that a particular patent should never have been granted by the U.S. Patent and Trademark Office (PTO) should protect the defendant from liability. The question first arose in a federal district court, which refused to allow the defendant to introduce evidence that it believed that the asserted patent was invalid. The defendant appealed, and, in a split decision, the majority of judges on a Federal Circuit panel sided with the defendant, thus recognizing the good faith defense. This time the plaintiff sought review, and the Supreme Court reversed the Federal Circuit opinion.
The Supreme Court did not, however, change the law relating to a closely related defense: that the defendant did not believe that its product or service infringed the patent owner’s patent claims at all. Given how complex patent analysis and litigation usually is, that’s a good thing, especially since different courts may come out on different sides of that issue.
So why does this new case matter?
First off, it is so common for an engineer to believe that a given patent should never have been issued to begin with. And second, because not only the courts, but even the PTO often agrees, holding that an existing patent is invalid. Often, this is because of the existence of “prior art” (e.g., evidence that the same inventions had already been disclosed by other inventors), or the fact that existing patented and/or unpatented inventions made the patented technology “obvious” rather than “novel.”
Indeed, the low-quality of software patents has been widely recognized and decried, and the PTO has launched a variety of initiatives over the last decade to address the problem. It’s no wonder, then, that software engineers may jump to the conclusion that a given patent claim should be declared invalid, especially where the engineer is aware of prior patents or technology that appears to anticipate it.
Unfortunately, the legal determination of validity is extremely complex, and the mode of analysis that has developed over time in the courts is not identical to the one that an engineer would bring to bear on the same analysis. As a result, an engineer that believes she has a pretty good understanding of patents will often not only have a good-faith belief, but even be dead certain, about the invalidity of a patent that a court ultimately affirms as valid.
You may be curious why I keep talking about what engineers might think, as compared to their employers, who often bear the risk (as was the case in the Commil case). The reason is this: more and more software in use today is open source software, and more and more of that code is created by individual developers, working on their own time to advance projects that are hosted at GitHub and elsewhere. Since they are creating code with the hope and expectation that others will download and use it, the risk of being held liable for inducing downstream users to infringe a patent is clear, at least in theory.
It’s unfortunate therefore that the Supreme Court has come out the way it has. It’s particularly regrettable in light of the fact that the PTO still has a long way to go before engineers will have reason to assume that a given patent is valid rather than the opposite. Finally, because individual engineers as well as those working together on a project will rarely have the resources to challenge a patent they believe should never have been issued. The result is that developers concerned about their own personal liability will have greater reason to avoid using technology subject to obviously weak patents, including patents owned by the “trolls” the Obama administration has come out against.
That’s bad news, and yet another reason why Congress should continue to work towards curtailing the issuance and assertion of patents that work to the detriment of collaboration and innovation.