Global-Tech v. SEB: Supreme Court on induced patent infringement

by Bryan Beel

The Supreme Court decided Global-Tech v. SEB to review the law of induced patent infringement. The Court's holdings:

1) Induced infringement under §271(b) requires knowledge that the induced acts constitute patent infringement.

(a) Section 271(b)’s text—“[w]hoever actively induces infringement of a patent shall be liable as an infringer”—is ambiguous as to the intent needed to impose liability. In referring to a party that “induces infringement,” the provision may require merely that the inducer must lead another to engage in conduct that happens to amount to infringement. On the other hand, the reference to a party that “induces infringement” may also be read to mean that the inducer must persuade another to engage in conduct that the inducer knows is infringement.

(b) Like §271(b)’s language, the pre-1952 case law is susceptible to conflicting interpretations. However, Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U. S. 476 (Aro II), resolves the question at issue.

(c) Induced infringement was not considered a separate theory of indirect liability in the pre-1952 case law, but was treated as evidence of “contributory infringement,” i.e., the aiding and abetting of direct infringement by another party. When Congress enacted §271, it separated the contributory infringement concept into two categories: induced infringement, covered by §271(b), and sale of a component of a patented invention, covered by §271(c). In the badly fractured Aro II decision, a majority concluded that a violator of §271(c) must know “that the combination for which his component was especially designed was both patented and infringing.” 377 U. S., at 488. That conclusion, now a fixture in the law, compels this same knowledge for liability under §271(b), given that the two provisions have a common origin and create the same difficult interpretive choice.

2) Deliberate indifference to a known risk that a patent exists does not satisfy the knowledge required by §271(b). Nevertheless, the Federal Circuit’s judgment must be affirmed because the evidence in this case was plainly sufficient to support a finding of Pentalpha’s knowledge under the doctrine of willful blindness.

(a) The doctrine of willful blindness is well established in criminal law. Many criminal statutes require proof that a defendant acted knowingly or willfully, and courts applying the doctrine have held that defendants cannot escape the reach of these statutes by deliberately shielding themselves from clear evidence of critical facts that are strongly suggested by the circumstances. The traditional rationale for the doctrine is that defendants who behave in this manner are just as culpable as those who have actual knowledge. This Court endorsed a concept similar to willful blindness over a century ago in Spurr v. United States, 174 U. S. 728, 735, and every Federal Court of Appeals but one has fully embraced willful blindness. Given the doctrine's long history and wide acceptance in the Federal Judiciary, there is no reason why the doctrine should not apply in civil lawsuits for induced patent infringement under §271(b).

(b) Although the Courts of Appeals articulate the doctrine of willful blindness in slightly different ways, all agree on two basic requirements. First, the defendant must subjectively believe that there is a high probability that a fact exists. Second, the defendant must take deliberate actions to avoid learning of that fact. These requirements give willful blindness an appropriately limited scope that surpasses recklessness and negligence.

(c) Although the Federal Circuit’s test departs from the proper willful blindness standard in important respects, the evidence when viewed in the light most favorable to the verdict for SEB was sufficient under the correct standard. Pentalpha believed that SEB’s fryer embodied advanced technology that would be valuable in the U.S. market as evidenced by its decision to copy all but the fryer’s cosmetic features. Also revealing is Pentalpha’s decision to copy an overseas model of SEB’s fryer, aware that it would not bear U. S. patent markings. Even more telling is Pentalpha’s decision not to inform its attorney that the product to be evaluated was simply a knockoff of SEB’s fryer. Taken together, the evidence was more than sufficient for a jury to find that Pentalpha subjectively believed there was a high probability that SEB’s fryer was patented and took deliberate steps to avoid knowing that fact, and that it therefore willfully blinded itself to the infringing nature of Sunbeam’s sales.

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Reference Info: Decision | Federal, U.S. Supreme Court | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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