Tuesday, May 31, 2011

SCOTUS: Inducement to Infringe Requires "Actual Knowledge" of Patent; "Deliberate Indifference" Not Enough

Global-Tech Appliances, inc. v. SEB S.A., No. 10-6, May 31, 2011

Global Tech, an Hong-Kong appliance maker, sold a deep-fryer to 3rd parties that was an alleged copy of one patented by SEB.  SEB subsequently sued Global Tech for actively inducing purchasers of the fryers to sell or offer to sell them in violation of SEB’s patent rights. The jury found for SEB on the induced infringement theory, and the District Court entered judgment for SEB.  On appeal, the Fed. Cir. affirmed, ruling that inducement to infringe may be established without actual knowledge of the patent through a showing of a "deliberate indifference" to a risk that the patent does in fact exist.

On appeal to the Supreme Court, the question presented was "whether the legal standard for the state of mind element of a claim for actively inducing infringement under 35 U.S.C. § 271(b) is 'deliberate indifference of a known risk' that an infringement may occur, as the Court of Appeals for the Federal Circuit held, or 'purposeful, culpable expression and conduct' to encourage an infringement."

The Court answered that induced infringement under 271(b) requires knowledge of the patent that is infringed, and "deliberate indifference" (or recklessness) to the existence of the patent is insufficient to confer liability.  However, defendants cannot escape liability if they engage in "willful blindness" towards the patent.


Turning to the decision in Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U. S. 476 (1964) ("Aro II"), the Court stated
Aro II concerned §271(c), which states in relevant part: 
"Whoever offers to sell or sells . . . a component of a patented [invention] . . . , constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer." (Emphasis added.)
 [T]he "holding in Aro II has become a fixture in the law of contributory infringement under[section] 271(c)," . . . so much so that SEB has not asked us to overrule it, [].  Nor has Congress seen fit to alter §271(c)’s intent requirement in the nearly half a century since Aro II was decided. In light of the "‘special force’" of the doctrine of stare decisis with regard to questions of statutory interpretation, [] we proceed on the premise that §271(c) requires knowledge of the existence of the patent that is infringed.

Based on this premise, it follows that the same knowledge is needed for induced infringement under §271(b). As noted, the two provisions have a common origin in the pre 1952 understanding of contributory infringement, and the language of the two provisions creates the same difficult interpretive choice. It would thus be strange to hold that knowledge of the relevant patent is needed under §271(c) but not under §271(b). 

Accordingly, we now hold that induced infringement under §271(b) requires knowledge that the induced acts constitute patent infringement.
To establish knowledge, the Court stated that "deliberate indifference" to the existence of the patent will not be enough for liability.  In the absence of direct evidence, "willful blindness" must be shown:

[W]e agree that deliberate indifference to a known risk that a patent exists is not the appropriate standard under §271(b). We nevertheless affirm the judgment of the Court of Appeals because the evidence in this case was plainly sufficient to support a finding of Pentalpha’s knowledge under the doctrine of willful blindness. 

Given the long history of willful blindness and its wide acceptance in the Federal Judiciary, we can see no reason why the doctrine should not apply in civil lawsuits for induced patent infringement under 35 U. S. C. §271(b). 

While the Courts of Appeals articulate the doctrine of willful blindness in slightly different ways, all appear to agree on two basic requirements: (1) the defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact.  We think these requirements give willful blindness an appropriately limited scope that surpasses recklessness and negligence. Under this formulation, a willfully blind defendant is one who takes deliberate actions to avoid confirming a high probability of wrongdoing and who can almost be said to have actually known the critical facts. See G. Williams, Criminal Law §57, p. 159 (2d ed. 1961) ("A court can properly find wilful blindness only where it can almost be said that the defendant actually knew"). By contrast, a reckless defendant is one who merely knows of a substantial and unjustified risk of such wrongdoing, see ALI, Model Penal Code §2.02(2)(c) (1985), and a negligent defendant is one who should have known of a similar risk but, in fact, did not, see §2.02(2)(d).

Read/download the opinion here (link)

3 Comentários:

EG said...

Peter,

As others have said the difference between "willful blindness" and "deliberate indifference" is "pedantic sophistry." When affirming the Federal Circuit, why can't SCOTUS leave well enough alone?

patent litigation said...

The Court's ruling makes sense because of a very important point: Pentalpha did not tell its attorney that it had purchased and directly, deliberately copied the SEB fryer. If Pentalpha had informed its lawyer as to this fact, then the attorney likely would have found the patent. Because of this deliberate failure to inform the attorney of its copying, the prior art search was just a cover, and "willful blindness" makes complete sense. That considered, I'm glad this patent litigation went in favor of SEB.

Arizona Patent Attorney said...

One wonders how many times the active inducement standard will have to be repeated, in how many different ways.

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