It took Supreme Court Justice Antonin Scalia to finally call a thing by its right name: as part of a ruling in Commil USA, LLC v. Cisco Systems, Inc., a case focusing on a complex area of patent law known as “inducement infringement,” Scalia warned that the court’s decision to side with patent owner Commil “increases the in terrorem power of patent trolls.” It is the first time the term “patent troll” has been used by the court, and the case offers hope for those concerned over the growing power of these types of firms, many of whom appear to be amassing patents for the sole purpose of bringing frivolous and expensive lawsuits.
The legal question at hand was whether or not Cisco was liable for infringing on a patent when it had a “good-faith” belief that the patent was invalid. The patent, number 6,430,395, addressed the problem of “how to manage ‘hand-offs’ between different base stations that together provide wireless coverage over a large area.” It was filed in 2001; Commil sued Cisco, claiming that its 2002 “Split-MAC WLAN systems” violated the patent.
Simple enough — except, Cisco argued that in order to violate a patent, it must have knowingly violated that patent. For Commil, that position would have given patent offenders a free pass. “Good faith” beliefs that patents don’t exist offer slim protection to patent owners, especially because it would erode the “presumption of validity” that patents currently have.
The core of the case is about the distinction between infringement and invalidity. On this, the majority agreed with Commil and acknowledged that a “good faith” belief in a patent’s invalidity is not defense enough against infringement. “In the usual case, ‘I thought it was legal’ is no defense,” wrote Justice Anthony Kennedy.
But not everything went Commil’s way. The court made a clear recognition of the reality of current patent law and gave supporters of patent reform a show of support. 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.”
The court then argued that it was the responsibility of lower courts to “ensure frivolous cases are dissuaded” and to sanction the attorneys who bring those cases. Why include this language? Possibly as a sign that, in spite of ruling for Commil, the court isn’t blind to the fact that firms like Commil aren’t blameless. With patent reform on the docket yet again, the court’s writing on the matter carries some weight, even if the decision went in Commil’s favor.
