On June 25, 2013, the Federal Circuit issued its opinion in Commil USA v. Cisco Systems (opinion available here). The district court had instructed the jury that that it could find inducement if “Cisco actually intended to cause the acts that constitute direct infringement and that Cisco knew or should have known that its actions would induce actual infringement.” The “knew or should have known” phrase was taken verbatim from DSU Medical. Cisco argued that this instruction allowed the jury to find inducement if it was shown that Cisco was negligent; Cisco argued that this conflicted with the Supreme Court’s recent decision in Global–Tech Appliances, Inc. v. SEB S.A., 131 S.Ct. 2060 (2011).
The Federal Circuit agreed with Cisco:
While the court did instruct the jury that certain circumstantial evidence could support a finding of inducement, the present jury instruction plainly recites a negligence standard, which taken literally, would allow the jury to find the defendant liable based on mere negligence where knowledge is required. Therefore, to the extent our prior case law allowed the finding of induced infringement based on recklessness or negligence, such case law is inconsistent with Global–Tech and no longer good law. It is, therefore, clear that the jury instruction in this case was erroneous as a matter of law.
Because the jury “was not instructed that in order to be liable for induced infringement, Cisco must have had knowledge that the induced acts constitute patent infringement” the Federal Circuit reversed and remanded:
With respect to whether the induced acts constitute patent infringement, it is clear that the jury was permitted to find induced infringement based on mere negligence where knowledge is required. This erroneous instruction certainly could have changed the result. Facts sufficient to support a negligence finding are not necessarily sufficient to support a finding of knowledge. Accordingly, we vacate the jury’s verdict on induced infringement and remand for a new trial.
The Federal Circuit also held that the district court erred by refusing to permit Cisco to introduce evidence regarding its alleged good-faith belief of invalidity with respect to whether Cisco possessed the specific intent to induce infringement:
[O]ne could be aware of a patent and induce another to perform the steps of the patent claim, but have a good-faith belief that the patent is not valid. Under those circumstances, it can hardly be said that the alleged inducer intended to induce infringement. Thus, a good-faith belief of invalidity is evidence that may negate the specific intent to encourage another’s infringement, which is required for induced infringement. . . . We now hold that evidence of an accused inducer’s good-faith belief of invalidity may negate the requisite intent for induced infringement.