Seagate and Good Faith

There's a small uproar in the patent lawyer community (mostly just me) over the dissent in Commil v. Cisco, the majority standing for the proposition that a good-faith belief in invalidity isn't a complete defense to induced infringement. I get my jimmies rustled because the legal concept of a "good faith belief in invalidity/noninfringement" belongs to the enhanced damages, or "wilfullness" analysis, as in our recent Global Traffic Technologies case.

The CAFC reversed only the enhanced damages determination, because it said the district court applied the wrong standard in the first prong of the Seagate test:

Enhanced damages requires: (1) an unjustifiable risk of infringement and (2) that the defendant knew or should have known of the risk. But remember that we know the first prong is defeated when we have a good faith defense! Because the defendant in this case had a complete good faith defense at the beginning of litigation, we can infer that the risk was justifiable. Thus, no enhanced damages.

As always, the moral for IP owners is to be prepared. Have a defense, or even better, a non-infringement opinion.

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