Federal Circuit Review - Issue 53
Supreme Court: Defendant’s Good-Faith Belief of Invalidity Is Not a Defense to Induced Infringement
Commil USA, LLC v. Cisco Systems, Inc., No. 13-896, (S. Ct. May 26, 2015) (Kennedy, J.) (Scalia, J., dissenting). Click Here for a copy of the opinion.
Commil sued Cisco for infringement of US Patent 6,430,395, for a method of implementing short-range wireless networks. After two trials, the jury found for Commil on both direct and induced infringement and awarded damages. The district court instructed the jury that Cisco could be liable for inducing infringement if it “knew or should have known” that its customers infringed. The district court also excluded Cisco’s evidence of good-faith belief that the ‘395 patent was invalid.
Cisco appealed to the Federal Circuit, which held that “induced infringement requires knowledge that the induced acts constitute patent infringement.” The Federal Circuit also reversed the district court’s exclusion of Cisco’s evidence, holding that “evidence of an accused inducer’s good-faith belief of invalidity may negate the requisite intent for induced infringement.”
The issue before the U.S. Supreme Court was “whether a defendant’s belief regarding patent validity is a defense to a claim of induced infringement.” The Court agreed with the Federal Circuit that “liability for inducing infringement attaches only if the defendant knew of the patent and that ‘the induced acts constitute patent infringement.’” Nevertheless, the Court held that a defendant’s good faith belief regarding patent validity is not a defense to a claim of induced infringement. According to the Court, infringement and validity are separate issues - they appear in separate parts of the Patent Act and are listed as separate defenses, i.e., they are “alternative grounds” for dismissing the suit. Therefore, a “belief regarding validity cannot negate the scienter required under §271(b).”
In addition, allowing a defense of good faith belief in invalidity would undermine the statutory presumption of patent validity and would “circumvent the high bar Congress is presumed to have chosen: the clear and convincing standard.” The Court noted that “invalidity is not a defense to infringement, it is a defense to liability.” The Court also raised practical reasons such as an increase in burden on litigation and the availability of alternative routes for the defendant to invalidate a patent. The Court vacated the Federal Circuit decision and remanded the case for further proceedings.
Justice Scalia dissented, with whom Chief Justice Roberts joined. Justice Scalia agreed with the majority that induced infringement requires “knowledge of the infringing nature of the induced acts.” However, he argued that (1) “only valid patents can be infringed”; (2) “anyone with a good-faith belief in a patent’s invalidity necessarily believes the patent cannot be infringed”; and (3) “it is impossible for anyone who believes that a patent cannot be infringed to induce actions that he knows will infringe it.” Therefore, a good-faith belief of invalidity can be a defense to induced infringement of that patent.
Safe Harbor Provision Exempts Post-Approval Activities That Are Not “Routine” From Infringement
Classen Immunotherapies, Inc. v. Elan Pharmaceuticals, Inc., No. 2014-1671, 2015 U.S. App. LEXIS 7854 (Fed. Cir. May 13, 2015) (Reyna, CJ.). Click Here for a copy of the opinion.
Elan marketed and sold metaxalone tablets as a branded muscle relaxant called Skelaxin, after obtaining approval for its new drug application (“NDA”). Subsequently, the FDA proposed to change the designation of metaxalone from “non bioproblem” to “bioproblem” based on clinical studies conducted by a third party. (A “bioproblem” drug requires in vivo bioavailability and bioequivalence data for generic drug approval.) In response, Elan initiated its own clinical study and observed a significant effect of food on the metaxalone’s bioavailability. Elan submitted a citizen petition requesting that the FDA require both fed and fasting bioavailability data for generic metaxalone, before approving any abbreviated new drug applications (“ANDAs”) that reference Elan’s NDA. Elan also submitted its clinical study report and a supplemental NDA to revise its product label. The FDA granted Elan’s citizen petition and approved its supplemental NDA. Elan also obtained patent protection based on its clinical findings, but these patents were later invalidated.
Classen owns US Patent 6,584,472, which is directed to “a method for accessing and analyzing data on a commercially available drug to identify a new use of that drug, and then commercializing that new use.” Classen sued Elan, alleging that Elan infringed the ‘472 patent “when it studied the effect of food on the bioavailability of Skelaxin, used the clinical data to identify a new use of the drug, and commercialized the new use.” On summary judgment, the district court granted Elan’s motion, holding that the safe harbor provision of §271(e)(1) protects Elan from infringement liability. Classen sought to vacate the court’s summary judgment decision but was unsuccessful. On the parties’ joint motion, the district court entered final judgment of noninfringement, and Classen appealed.
The safe harbor provision, 35 U.S.C. §271(e)(1) states, in part: “[i]t shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention … solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs .…” Exemption from infringement “extends to all uses of patented inventions that are reasonably related to the development and submission of any information under the FDCA,” regardless of whether the activity is pre or post-approval. Here, the Federal Circuit found that Elan’s clinical study and FDA submissions were within the scope of §271(e)(1). Elan’s activities were not “routine post-approval reporting” but were “necessary to the approval of both the brand-name and generic versions of Skelaxin.”
Classen also argued that “reanalyzing the clinical data to identify patentable information and filing patent applications” constituted commercial uses by Elan that are not protected by the safe harbor. Since the district court did not address this issue, the Federal Circuit vacated the judgment of non-infringement and remanded. However, the Court provided some guidance. It pointed out that “[f]iling a patent is generally not an infringement of a patent” and does not constitute “commercialization” of an invention. Because Classen’s claims require “commercialization,” Elan likely did not infringe.
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