After eight long years, Cisco Systems Inc. has finally been cleared of infringement charges over. The U.S Supreme court verdict brought an end to the patent dispute while reversing the prior judgment which would have made Cisco $64 million less richer.
The court reasoned that Cisco had not violated any patent rights while trying to distribute wireless signals over large areas. The Court reversed the Federal Circuit’s decision and reprimanded the Circuit for misinterpreting both patent law and the Court's decision in Global-Tech Appliances, Inc. v. SEB S.A.(2014).
The general counsel for Cisco stated in an interview that neither the company nor their products affiliated in any way with the patent, only to lose millions of dollars on such a baseless suit.
Documents submitted in the Court showed that the suing company, Commil USA, LLC purchased the patent rights from an Isreali company for implementing short-range wireless networks in a method of providing faster and more reliable communications between devices and their base stations.
Initially the District Court had ruled in favor of Cisco holding that it had a "good faith belief" while Commil's claims were unmeritorious. The Federal Circuit reversed this ruling and thus the case came to the Supreme Court. The pertinent question was whether a good-faith belief in invalidity can be a reasonable defense to accused infringement.
Commil had sued Cisco in 2007 for infringements of their patent by influencing their customers to use their Cisco products. In 2011, the Court had then awarded Commil around $63 million as damages without interest. Later in 2013, Cisco had initiated an appeal against the verdict of 2011 to the Federal Circuit.
The Supreme Court stated, "orderly administration of the patent system” needs both the terms “infringement” and “invalidity” to be considered separately for its dichotomy nature, therefore the District Court had been correct in ruling in favor for Cisco’s belief of Commil’s claim to be invalid. The jurisprudential point: "invalidity is not a defense to infringement, it is a defense to liability"
Justice Scalia joined by Chief Justice Roberts believed that as only valid patent could be liable to infringement, similar belief in good-faith of an invalid patent can be a reasonable defense to an induced infringement of that patent.