28 May
2015

SCOTUS Commil decision is one part boost to patent rights one part feeding the “troll” narrative

There’s no doubt that for most readers of this blog the real interest in Justice Kennedy’s majority opinion from earlier this week in the case of Commil v Cisco came in his concluding remarks. The 6-2 Supreme Court decision (Justice Scalia wrote a dissent which Chief Justice Roberts joined, Justice Breyer took no part in the case) found largely in favour of Commil and ruled that a good-faith belief in a patent’s invalidity is no defence against induced infringement.

That was a welcome boost for those patent owners who complain that much of SCOTUS’s recent jurisprudence has shrouded their rights in a cloud of uncertainty. But in an interesting turn of events Kennedy chose his concluding remarks to focus on perceived problems of frivolous patent litigation.

Although he pointed out that there was no suggestion of frivolity in this case from either Commil or Cisco, Kennedy wrote that: “It is still necessary and proper to stress that district courts have the authority and responsibility to ensure frivolous cases are dissuaded.” He added that lower courts have the means to sanction lawyers who bring such suits and that they can award attorney fees to prevailing parties – a sanction which has become more widespread thanks to a couple of 2014 SCOTUS cases.

Commil is a non-practising entity or, as some would describe it, a “patent troll”, so it was almost as if, conscious that he was ruling in favour of an NPE, Kennedy felt he should caveat his opinion by revealing that he’s fully aware of some of the abuses that are said to go on and that this opinion should not be seen as giving the likes of Commil an opportunity to engage in unsavoury litigation tactics.

He was most likely writing with Justice Scalia’s views firmly in his mind. Scalia, with typical flourish, dismantled each part of Kennedy’s argument in his dissent and then pointed out that the court’s holding “increases the in terrorem power of patent trolls”. That is thought to be the first time that the court has used the “T” word in a patent case; though just as pro-reform politicians and lobbyists have declined to give us a definition of what a troll is, Scalia did not throw any light on what he understands the term to mean.

That is unfortunate, but what impact might both justices’ comments have on the wider patent reform debate? As with the passage of the AIA, in this current legislative cycle we have seen the Supreme Court intervene on issues being considered in proposed new laws. Its decisions on fee shifting in the Octane and Highmark cases are the best examples of that; and now Kennedy’s comments, in particular, could serve as a reminder that courts already have many of the powers to clamp down on the kind of litigation abuse that some legislators are so keen to address.

That is an argument that has been made by those who oppose the kind of broad-based reform proposed by the Innovation Act. Therefore, if, as the reform process drags on, there is evidence that the lower courts are doing more to stamp out frivolous litigation that must surely weaken the case for overly broad legislation. Given the choice, many would prefer it if reform was left to the judiciary, not politicians because that is the way to get the nuanced, case-by-case solutions that such a complex issue deserves. 

Richard Lloyd

Author | Editor

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