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Friday, June 3, 2011

Supreme Court Sets High Bar for Finding Induced Infringement

Hot on the tail of the Therasense decision and its rewriting of Rule 56, comes the Supreme Court in Global-Tech Appliances, inc. v. SEB S.A., No. 10-6, May 31, 2011.  Unlike Therasense, this ruling relates to the knowledge requirement in induced infringement under 35 U.S.C. 271.

Global Tech, a 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.

The Court determined 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. In explaining this standard, the Court looked to criminal law culpability standards, in stating:

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).

In remanding to the CAFC for a finding under the proper standard, the Court summarized its findings regarding the error of the lower court as follows:

The test applied by the Federal Circuit in this case departs from the proper willful blindness standard in two important respects. First, it permits a finding of knowledge when there is merely a "known risk" that the induced acts are infringing. Second, in demanding only "deliberate indifference" to that risk, the Federal Circuit's test does not require active efforts by an inducer to avoid knowing about the infringing nature of the activities.

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