Supreme Court to Hear Case on Inducing Patent Infringement

Global-Tech Appliances, Inc. v. SEB S.A. (Supreme Court 2010)

The Supreme Court has granted writ of certiorari in the case of Global-Tech v. SEB to decide the level of intent required for inducing infringement. The question raised is: Whether the legal standard for the "state of mind" element of a claim for actively inducing infringement under 35 U.S.C. ยง 271(b) is "deliberate indifference of a known risk" that an infringement may occur or instead "purposeful, culpable expression and conduct" to encourage an infringement.

Section 271(b) of the patent act creates a cause of action against inducing infringement. The statute reads "Whoever actively induces infringement of a patent shall be liable as an infringer." Courts have struggled for years to define the level of intent that is sufficient to satisfy the rough statutory guidelines.

In DSU Medical Corp. v. JMS Co., Ltd., 471 F.3d 1293 (Fed. Cir. 2006) (en banc), the Federal Circuit held that inducement charges could only be sustained if the accused inducer "knew of the patent." In SEB (T-Fal) v. Montgomery Ward & Co., 594 F.3d 1360 (Fed. Cir. 2010), the Federal Circuit eased-back on that requirement by holding that "deliberate indifference" to potential patent rights could be sufficient to satisfy the knowledge requirement of inducement charges. Thus, Judge Rader wrote in SEB that "a claim for inducement is viable even where the patentee has not produced direct evidence that the accused infringer actually knew of the patent-in-suit."

In the case, Judge Rader distinguished between the subjective determination of "deliberate indifference" and an objective "should-have-known" standard. An interesting aspect of the Federal Circuit decision is the court's use of non-patent and non-Federal Circuit cases to aid its interpretation of the law. Specifically, the decision relies on three cases that are decidedly non-patent: Farmer v. Brennan, 511 U.S. 825 (1994); United States v. Carani, 492 F.3d 867, 873 (7th Cir. 2007); and Woodman v. WWOR-TV, Inc., 411 F.3d 69 (2d Cir. 2005).

Farmer v. Brennan involved the question of whether an incarcerated pre-operative transsexual who projects female characteristics could be held in a men-only prison. The Supreme Court there held that a prison official could be liable for "deliberate indifference" to inmate safety. US v. Carani involved an appeal of a child pornography conviction and the Seventh Circuit ruled that the defendant's knowledge of the child-status of the pornography was satisfied by the defendant's deliberate avoidance of or indifference to the truth. Woodman v. WWOR-TV involved an age discrimination charge against FOX and noted that knowledge of a fact may be proven through evidence that the party "consciously avoided knowledge of what would otherwise have been obvious him."

The cases cited above are not found in the appellate briefs. Rather, the SEB court's concept of "deliberate indifference" was raised sua sponte by the Federal Circuit.

The petition for certiorari was aided by a short but compelling brief by the legal academics led by Professor Lemley (Stanford) and Holbrook (Emory) and also signed by conservatives such as Richard Epstein (Chicago). The brief basically argued that the Federal Circuit has been unable to clarify its own law on the state of mind requirement for inducement liability. The brief also suggest that the Federal Circuit SEB decision conflicts with the Supreme Court's precedent in MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 936 (2005).

Notes:

11 thoughts on “Supreme Court to Hear Case on Inducing Patent Infringement

  1. To No One in Particular,
    I imagine this is about Legal Chains. And Patently O. And the Games played this whole year. I don’t see how being tied up Legally without being free from my captors, and not free to have Counsel has anything to do with a Date. Do any of you see anything wrong with this Picture?

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  2. This case is being discussed by people, and will be decided by a Court, on a different planet than the one I live on.

    On this planet (which the natives call Earth) when an independent inventor (or small NPE) gingerly approaches a company to discuss the possibility that the company should license our patent, we are told the following (or would be told, if the Company were honest):


    1. I have been instructed by our attorneys to tell you that your patent is invalid due to voluminous prior art, even though neither I (nor our attorneys) have ever read your patent, we refuse to read your patent, we have never seen any prior art relating to your patent, and I wouldn’t know prior art if it bit me in the ass.

    2. I will personally testify that our product does not infringe even though I have never read your patent, I don’t know the slightest thing about claims, and I don’t really know what’s in our products, anyway.

    All I know is that by even bringing up the subject to me, my company is now in abject, cowering fear that you will sue us, so we will sue you first. We will probably bankrupt you before the case even gets to the part about patents.

    Have a nice day,

    Sincerely yours,

    Soulless, Gutless, Infringing Company

    As Mr. Rantanen points out, corporations don’t have a “mind”
    so mens rea is meaningless.

    BTW, since corporations are legal persons, and they don’t have minds, it explains why corporations are pathological, psychotic creatures who should be locked up and medicated into a stupor so they will not be able to harm society.

    Also, now that corporations are totally legal persons, even more than they have been since Santa Clara County v. Southern Pac. R. Co., 118 U.S. 394 (1886), two corporations in the same industry cannot legally merge, except in Massachusetts where gay marriage is legal.

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  3. “”purposeful, culpable expression and conduct” to encourage an infringement. ”

    ^ the answer. Or close enough to it anyway.

    Gee that’ll take them all of ten minutes to dispose of. I guess they’ll have to waste time with oral arguments as well though.

    “And I wouldn’t be surprised if a smoking gun memo requirement for inducement is then quickly exported onto the IE doctrine.”

    I would.

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  4. (essentially) a “should have known” standard

    Please refer to the thread discussing the Circuit opinion in this case, linked by Dennis above, where the distinction between “should have known” and “made sure not to know” is explained.

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  5. As an aside, the “purposeful, culpable expression and conduct” quote comes from the Supreme Court’s copyright decision in Grokster. METRO-GOLDWYN-MAYER STUDIOS, INC., et al., Petitioners v. GROKSTER, LTD., 545 U.S. 913 (2005). In that case, the Court wrote: “[M]ere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability. Nor would ordinary acts incident to product distribution, such as offering customers technical support or product updates, support liability in themselves. The inducement rule, instead, premises liability on purposeful, culpable expression and conduct, and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promise.”

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  6. My problem here is that both sides are being rather inconsistent, with regard for the “intent” requirement for infringement versus inequitable conduct. Rader finds sufficient intent from (essentially) a “should have known” standard for purposes of inducing infringement, but would require a smoking gun memo for inequitable conduct. Vice versa for those on the other side.

    As usual for Supreme Court review of the Fed. Cir., the smart money is on reversal. And I wouldn’t be surprised if a smoking gun memo requirement for inducement is then quickly exported onto the IE doctrine.

    Reply

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