The US Supreme Court ruled against Cisco over a patent infringement claim the tech giant is fighting against Commil.
The court threw out a ruling by the US Court of Appeals for the Federal Circuit in favour of Cisco which is more than certainly going to lead to a new trial.
The case concerns a patent held by Commil for a patent to improve the implementation of a wireless network where multiple access points are needed. Commil sued Cisco for patent infringement and induced patent infringement based on the network equipment maker’s use of similar technology.
In April 2011, a jury awarded Commil almost $63.8 million in damages. A judge subsequently added $10.3 million in interest.
But in June 2013, the appeals court ordered a retrial, concluding in part that Cisco should be allowed to mount the “good faith” defence.
Washington-based intellectual property lawyer William Jackson said the ruling means “the patent owner must merely prove that the other party knew of the patent and intended to induce infringement – not that the party had any particular belief about validity.”
Seth Waxman, one of Cisco’s lawyers, said the ruling “simply eliminates one of many defences available to Cisco, which looks forward to retrial of the case.”
The US government had warned that companies accused of inducing patent infringement were likely to raise the “good faith” defence in most cases, if not all of them.
The Supremes agreed saying that if Cisco prevailed on its theory, there would be “negative consequences” in other cases.
Justice Antonin Scalia wrote a dissenting opinion saying that the ruling would benefit so-called patent trolls, companies that hold patents only for the purpose of suing firms seeking to develop new products.