An Objective View of Fault in Patent Infringement

By Jason Rantanen

In GlobalTech v. SEB, the Supreme Court is addressing the question "[w]hether 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...or instead "purposeful, culpable expression and conduct" to encourage an infringement.”  Yet, as I suggested last month, perhaps framing the issue as an involving an inquiry into the subjective state of mind of an accused inducer isn't the best approach.  Instead, I propose that an analysis akin to civil recklessness - asking whether a high risk of infringement of a valid patent would have been obvious to a reasonable person in the accused party's position - is the better way to view the fault component of indirect infringement.  

That's the central argument of a draft article that I've prepared, and I'm interested in any feedback readers might have.  The abstract is provided below; the complete paper is available here

Unlike direct patent infringement (a strict liability claim), indirect and willful infringement require the patent holder to demonstrate fault on the part of the accused infringer. The conventional approach to the fault elements of these doctrines views them as involving a subjective inquiry into the accused party’s state of mind. Inducement of infringement, for example, requires that the alleged infringer possess mental culpability for it to be found liable. The question presented by the Supreme Court’s recent grant of certiorari in Global-Tech v. SEB is the quintessential illustration of this conventional view, asking whether the “state of mind” of the accused party is one of “deliberate indifference” or “purpose.” This mens rea-based approach to fault is likely the product of indirect infringement’s origins as an adaptation of the tort theory of aiding and abetting, an intentional tort.

This paper asserts that this conventional view of fault for indirect infringement is inherently flawed, and is largely nonsensical in the modern context in which indirect infringement is assessed. In large part this is because fault in patent infringement, unlike the tort tradition in which it was developed, involves assessment of particular legal – as opposed to factual – consequences, consequences that are both rarely certain and unlikely to ever be desired.

Rather than continuing to view the fault elements of these doctrines as if they were traditional intentional torts, this paper proposes that the law should instead apply an objective test more closely tailored to the specific context in which patent infringement arises. Specifically, it suggests that a better approach is to conceive of the fault element as requiring an objective inquiry into whether a high risk of patent infringement would have been obvious to another in the accused party’s position. In addition to providing a more accurate and usable articulation of the fault element, viewing the question in terms of risk enables finer tuning of the doctrine when seeking optimal deterrence effects. Furthermore, this change would parallel recent shifts in the approach to fault in the context of willful infringement, and would be consistent with the actual normative standard being applied by courts.

 

44 thoughts on “An Objective View of Fault in Patent Infringement

  1. My friend ask me about this few days ago. Lucky to dropped by on your blog and found you this. I will forward this to my friend. He will get interested with it. Thanks for the info.

    Reply
  2. It appears that you’ve put a good amount of effort into your article and I require a lot more of these on the World Wide Web these days. I truly got a kick out of your post. I do not have a bunch to to say in reply, I only wanted to register to say tremendous work.

    Reply
  3. Now if the company engaged in no conduct other than continuing to sell the product after the issuance of the patent (i.e.: it didn’t advertise it for the new use, for example), it might be very difficult to prove that it intended for its customers to engage in the new use – but that seems to me to be right.

    If a company does nothing but continue to do after the patent what it was doing before the patent, the only logical conclusion must be that the conduct can never infringe or induce infringement. Otherwise, the conduct must respectively anticipate or induce anticipation, or else we condone patenting of the prior art.

    The good news for the Federal Circuit is that logic is not binding precedent.

    Reply
  4. And thank you for all the helpful comments – I think I’ll make the distinction above even clearer, especially in the abstract.

    Reply
  5. Just to clarify a point – as I see it, there are two (or perhaps even three) “fault” elements involved in inducement. (Note that I’m using “fault” as I use it in the paper: to refer to any non-physical element of a legal claim). The fault elements relate to:

    1) the alleged inducer’s conduct;
    2) the third party acts that the alleged inducer’s conduct causes; and
    3) whether those acts infringe a patent.

    With respect to the first two fault elements, I am not suggesting that a standard mens-rea approach is not viable; to the contrary, I think both should require intent. In other words, for there to be inducement the accused party must intend to engage in it’s own conduct (something that will rarely, if ever, be at issue) and must intend that the third party engage in the relevant acts (i.e.: the issue in Hewlett-Packard).*

    The proposed objective approach therefore only applies to the third fault element: whether the conduct infringes a valid patent.

    To use one of the examples above, if a company continued to sell an unpatented product after the issuance of a patent covering a new use of that product, that company would not be liable for inducement unless the patent holder could establish both that the seller intended for its customers to engage in the new use of the product and a high risk that that use infringed the patent would have been obvious to a reasonable person in the accused party’s position.

    Now if the company engaged in no conduct other than continuing to sell the product after the issuance of the patent (i.e.: it didn’t advertise it for the new use, for example), it might be very difficult to prove that it intended for its customers to engage in the new use – but that seems to me to be right.

    In terms of instructions on a website explaining how to infringe the patent, I think the same question of intent to cause the conduct arises. Yes, it can be a tricky question. But practically speaking, which issue has historically been more significant (and controversial) in the inducement context: intent to cause the relevant acts, or intent to infringe the patent?

    *Note that I acknowledge that one weakness in my position is that the allowance of “intent” for these first two fault elements raises similar corporate mens-rea problems as with the third element. Still, in the context of the questions being asked (intent to produce particular factual consequences), I think those corporate mens rea concerns are significantly lower for the first two elements.

    Reply
  6. Supposedly that is the benefit we get from even giving you a patent.

    Surely there’s no incremental benefit if the original application has been published some years prior, since it’s also your job to make sure we don’t add anything new in the meantime.

    Wouldn’t that cut Publications’ budget pretty much in half? And you could up your productivity if you didn’t have to deal with those pesky printer rushes after you thought you’d finally gotten the application off your desk for good.

    Reply
  7. “Makes you wonder why the PTO bothers publishing them at all, really.”

    Supposedly that is the benefit we get from even giving you a patent.

    Supposedly.

    Reply
  8. So we don’t get bogged down:

    Elements of inducement:

    Infringement by a third party – no mens rea
    Instructions that reasonably lead to infringement – no mens rea
    Knowledge of the patent – mens rea

    There should be no other requirements. Either the person (e.g., a corporation) had knowledge of the patent, or it doesn’t.

    If you can show that you weren’t aware of the patent, the analysis is over: no inducement. If you were aware of the patent but you didn’t provide instructions, no inducement *unless* there you are selling an item for which there are no substantial non-infringing uses.

    Reply
  9. “He would be particularly liable if the new, patented off-label use becomes more common than the original off-patent use. Nobody ever takes thalidomide for morning sickness anymore, for example.”

    Where is the requirement for “more common” in the new standard. All it requires is a high liklihood that the product will be used by at least one customer to infringe the claim. So, if you manufacture screws, staples, magnets, or tape, you would induce infringement of any claims of the form “attaching A to B.” I mean, there’s a high risk that one of your customers will use your product to infringe that claim, irrespective of its many other uses.

    Reply
  10. wouldn’t that make a manufacturer of an old product liable for infringment of a claim to a new use of that old item, or new method of using that old item, even though it has other, old uses, and he never instructs his customers to use it in the claimed manner?

    He would be particularly liable if the new, patented off-label use becomes more common than the original off-patent use. Nobody ever takes thalidomide for morning sickness anymore, for example.

    Reply
  11. TINLA Under JR’s proposed new standard: “an objective inquiry into whether a high risk of patent infringement would have been obvious to another in the accused party’s position,” wouldn’t that make a manufacturer of an old product liable for infringment of a claim to a new use of that old item, or new method of using that old item, even though it has other, old uses, and he never instructs his customers to use it in the claimed manner?

    Yes. And that is why the new standard is bullshxt — at least in every case where there is a substantial non-infringing use.

    Reply
  12. Maurice: Notwithstandin the labeling, they will know that some significant percentage of the sales will result in infringing uses. Under an objective standard, that should be sufficient to establish liability for inducement.

    Supposing we apply this rule outside the pharmaceutical field. What if you sell bulk aluminum, and someone uses it to make design-”patented” car body panels or patented engine blocks? You know that’s bound to happen, because car parts are commonly made of aluminum, you’re selling it to a car company, and there are lots of car patents out there. Just to hammer the point home, maybe one of your customers has already been sued for patent infringement. There’s no patent on aluminum, there are no end of non-infringing uses for the stuff, and you don’t write on the tin that your aluminum is indicated for making car parts. Are you inducing infringement? Should a judge issue an injunction against you selling any bulk aluminum at all ever?

    Now, why should the rule be different for drugs?

    Reply
  13. In my previous post, please replace “DC” with “JR.”

    Reply
  14. It’s what you do best.

    nice of ya to notice.

    as for you, since worthless be otchin be what ya do best, and we really don’t need that (it’s really just plain boring), why doncha just cease?

    Reply
  15. “if there is any substantial non-infringing use for a non-patented product then, as a matter of law, there can be no inducement of infringement of a patented method relating to said product absent clear instructions to a third party to practice the infringing method.”

    Isn’t that just a restatement of the practical application of the present law on inducement?

    Under DC’s proposed new standard: “an objective inquiry into whether a high risk of patent infringement would have been obvious to another in the accused party’s position,” wouldn’t that make a manufacturer of an old product liable for infringment of a claim to a new use of that old item, or new method of using that old item, even though it has other, old uses, and he never instructs his customers to use it in the claimed manner?

    Reply
  16. Hey pingaling, maybe you can help sockie-bus explain why my rule is a bad one. I don’t see a problem with it. Do you? Good luck.

    In the meantime, keep on trollin’. It’s what you do best.

    Reply
  17. Well then, let’s just create an even bigger loophole – as a matter of law, there can be no infringement whatsoever.

    Oh, lookie, the trolls are waking up.

    Reply
  18. Well then, let’s just create an even bigger loophole – as a matter of law, there can be no infringement whatsoever.

    At least all the whiners will be happy.

    Reply
  19. The solution to Maurice’s Dilemna is probably to create a giant legal loophole: if there is any substantial non-infringing use for a non-patented product then, as a matter of law, there can be no inducement of infringement of a patented method relating to said product absent clear instructions to a third party to practice the infringing method.

    Reply
  20. Maurice Notwithstandin the labeling, they will know that some significant percentage of the sales will result in infringing uses. Under an objective standard, that should be sufficient to establish liability for inducement.

    Just to reiterate: this is rubbish. If the product itself is unpatented, then for the purpose of determining my liability as an inducer it does not matter what third parties are doing with it as long as I am not instructing third parties to infringe.

    As has been noted in this and other context, the interesting question is: what if I post on my website links to the issued patents that describe how to administer the drug (in a way that infringes)? Am I then inducing? What if I summarize the patents so anyone can understand the infringing methods?

    If that’s inducement, it sure would be an interesting result: telling someone else that a method is patented is inducing them to infringe?

    Reply
  21. Maurice:

    For example, among generic manufacturers of pharmaceuticals, an objective standard will make it very difficult for generic manufacturers to avoid liability for inducement by engaging in such tactis as “skinny labeling”. Notwithstandin the labeling, they will know that some significant percentage of the sales will result in infringing uses. Under an objective standard, that should be sufficient to establish liability for inducement.

    If this is true, then the objective test is seriously flawed and you start to run into problems relating to free expression.

    If it is legal to sell drug X (period), it can not be the correct result that selling drug X with a label advising the purchaser of the drug to engage in a non-infringing method of using drug X can constitute inducing infringement merely because some purchasers will use the drug in an off-label manner.

    Reply
  22. Sorry for being unclear. When I wrote “backward look” I meant “with an eye on the difficulties caused by the language of the US Statute, so as to avoid those difficulties, to the extent possible, in the UK statutory language”. There was a humorous rubbishing of the UK statutory language on the IPKat blog from a few days ago.

    Reply
  23. Maurice: an objective (or “deliberate indifference”) approach

    Deliberate indifference isn’t an objective approach. It’s a form of actual subjective knowledge. See the discussion I linked to in my previous post.

    An objective approach would be based on whether a hypothetical reasonable person of some description would have been aware or thought to check. Deliberate indifference is based on whether the particular person deliberately avoided knowing (because he subjectively “knew” what he didn’t want to know).

    Maurice: For example, among generic manufacturers of pharmaceuticals, an objective standard will make it very difficult for generic manufacturers to avoid liability for inducement by engaging in such tactis as “skinny labeling”.

    If all they’re doing is selling a drug that is off-patent as a composition but patented for a particular indication, without labeling for that indication, that’s not inducement unless they’re also telling the buyer to use it for the patented indication in some other way. If it were otherwise, it would be trivial to evergreen drug patents.

    Max: I think it was written with a backward look at the US jurisprudence,

    I doubt it. Most of us here take a backward look at the US jurisprudence all the time, and very few of us arrived at that result.

    Also, on a more serious note, that sounds like objective knowledge that the invention will result (which you always have, really), not knowledge of the patent.

    Reply
  24. The corresponding provision in UK law, Section 60(2) of the Patents Act 1977, on “contributory infringement” recites:

    “…when he knows, or it is obvious to a reasonable person in the circumstances, that those means are suitable for putting, and are intended to put,the invention into effect in the United Kingdom”

    I think it was written with a backward look at the US jurisprudence, but I think it is currently causing the English courts a lot of problems too.

    Reply
  25. I applaud Jason’s proposed objective approach. The problem with a subjective intent requirement is that in most cases involving alleged inducment, we are dealing with “corporate” intent rather than intent of individuals. The difficult issue is to ascertain what kind of evidence in the corporate setting is sufficient to justify a finding of corporate intent to induce. The objective approach is the most logical answer to this problem. If adopted by the Supreme Court (and I think there is a significant likelihood that this will happen), an objective (or “deliberate indifference”) approach will likely render useless a large percentage of the opinions rendered by outside law firms on issues of inducement. This will have major consequences in many industries, including the pharmaceutical industry. For example, among generic manufacturers of pharmaceuticals, an objective standard will make it very difficult for generic manufacturers to avoid liability for inducement by engaging in such tactis as “skinny labeling”. Notwithstandin the labeling, they will know that some significant percentage of the sales will result in infringing uses. Under an objective standard, that should be sufficient to establish liability for inducement. I submit that those who would require smoking gun evidence of specific intent (mens rea) to infringe are simply trying to pretend as if 271(b) was not part of the patent law.

    Reply
  26. I think other arguments could revolve around, for example: is ordering the copying of a product without also doing a credible patent search on it sufficient for a patent inducement action? Can a product-copier who has not been given actual notice of a relevant patent be legally affirmatively obligated to do a credible patent search to look for patents on that product?

    I would say yes on both counts, if we can only get rid of that pesky marking rule. The courts would probably disagree, based on this case where the fact of copying was no big deal really until it became evidence of how the inducer avoided knowledge of the patent. I guess it’s one more example of how freedom of commerce is more important than patents unless the patent is right up in your face.

    Makes you wonder why the PTO bothers publishing them at all, really.

    Reply
  27. In this Global-Tech Appliances Inc. v. SEB S.A., [Supreme Court No. 10-6, opinion below, SEB S.A. v. Montgomery Ward & Co., 594 F.3d 1360 (Fed. Cir. 2010)] the “Question Presented:” is “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, … or “purposeful, culpable expression and conduct‟ to encourage an infringement.” “
    But in my personal opinion, the question that should have been presented here is whether or not a defendant needs to actually know of the infringed patent or not to become liable for inducing such infringement? [Did not prior CAFC decisions clearly suggest that?] I think other arguments could revolve around, for example: is ordering the copying of a product without also doing a credible patent search on it sufficient for a patent inducement action? Can a product-copier who has not been given actual notice of a relevant patent be legally affirmatively obligated to do a credible patent search to look for patents on that product?
    Also, I do not see any basis of confusing the subject Section 271(b) actively inducing infringement with the law for enhanced damages for willful infringement under Section 284.

    Reply
  28. Whoza done absconded with my main man AINAE and substituted this schlock? First AINAE gets faced, then this feeble crrp is thrown up on the next post? This is hardly even worth the windmill ride of Malcolm, much less the galloping of the most intrepid rider of the Four Horsemen.

    No (real) witty response, no twists and turns to make the point inside out, not even a hint of obfuscation… just a lame ss “written instruction and computer” throw away line.

    Someone find the real IANAE, and quickly.

    And 6, Iza hope that you didn’t rip up your shoulder patting yourself on the back with that sock, ya big stuffed turkey. Ya would have been better off postin as Go66le.

    The clear give away was the “wiser words”, which aint cant never be associated with anything 6 says. Even if 6 were to somehow say something right (yes, even blind squirrels with mange, three legs, and half a busted tale find nuts), it would be parroted and not an original thought or utterance.

    Thus, “wiser” is off the table, as “as wise as” would be the proper terminology.

    At least ya showin your utter lack of law knowledge with the ““at least two of a wicked, a depraved, and a malignant heart“, as no one would ever utter these three items and say choose two. Put away that criminal law book, ya only goin to be hurtin yourself with it.

    Reply
  29. 6 – wiser words were never spoken.

    But if we gotta go that route, I suggest that the legal standard for the state of mind element of a claim for actively inducing infringement under 35 U.S.C. § 271(b) requires “at least two of a wicked, a depraved, and a malignant heart towards a known or should have known risk that infringement may occur due to encouragment towards an infringement.”

    Reply
  30. “Okay, but can we still get claims of the form “a set of written instructions which, when followed, cause somebody else’s computer to infringe method claim 1″?”

    lulz.

    Reply
  31. We should just cut all that nonsense out of the patent arena and call it a day.

    Okay, but can we still get claims of the form “a set of written instructions which, when followed, cause somebody else’s computer to infringe method claim 1″?

    Reply
  32. You guys care entirely too much about “inducement”. We should just cut all that nonsense out of the patent arena and call it a day.

    Reply
  33. IANAE: What I’m saying is that I don’t think knowledge of unlawfulness of conduct you’re inducing should matter. Whether they are your own acts (or acts that you knowingly induce) there should be liability. You have control over your own acts and you have control over your attempts to induce others’ acts. Knowledge of whether those acts infringe (your own or others’) doesn’t matter to me.

    Reply
  34. If A induced B to jump off a bridge, would he?

    From the very sentence structure, I would say that your question is nonsensical. Wouldn’t B have had to jump for actual inducement to have occurred? Running with the (bad) analogy, surely A will be prosecuted for any such inducement.

    The question…is not a trivial one.

    So what? What does this red herring have to do with anything under discussion?

    It’s not automatically

    Once again, …and the definition of “induced” would be…?

    Try to keep up.

    Reply
  35. Let’s just stop trying to protect A inthis situation, m’Ok?

    If A induced B to jump off a bridge, would he?

    The question of how far A has to go before he’s responsible for B doing a bad thing is not a trivial one. It’s not automatically A’s fault or his responsibility, for the exact same reason that B is strictly liable to C.

    Reply
  36. Whatever A induced B to do is therefore B’s responsibility.

    cf

    and some degree of control over the actions of B

    ..and the definition of “induced” would be…?

    Let’s just stop trying to protect A inthis situation, m’Ok?

    Reply
  37. I’m waiting for Michael R. Thomas to argue for a malum in se interpretation of patent infringement.

    Reply
  38. Knowledge of patent rights doesn’t apply to direct infringement.

    It sort of does. If the patentee is selling a patented article, you are not liable for past infringement unless you’re on notice of the patent. The most the court will do is tell you that, now that you’re aware of it, you should stop.

    There’s also the treble damages issue, but that’s not really the same because it goes to remedies rather than liability vel non.

    It shouldn’t apply to inducement either.

    I don’t think we can be so quick to conclude that. Suppose that A induces B to directly infringe the patent of C. B is strictly liable for direct infringement. A is liable not for violating the rights of C (he is presumptively not a direct infringer), but for causing B to violate the rights of C. Whatever A induced B to do is therefore B’s responsibility. It is up to B to ensure that his conduct does not infringe any patents, regardless of what A tells him to do, and C has a strict liability defendant in B. The liability of A is based on a theory that A essentially conspired to induce B to do something unlawful, which inherently requires at least an objectively culpable mental state and some degree of control over the actions of B.

    Reply
  39. Intent that acts occur (rather than intent that infringing acts occur) should be the standard.

    If you intentionally induce acts, you should be held liable if those acts infringe regardless of any knowledge of infringement. Knowledge of patent rights doesn’t apply to direct infringement. It shouldn’t apply to inducement either.

    Reply
  40. Even if you shoot someone in the head, intending to kill them, you don’t desire to commit murder

    W

    T

    F

    Reply
  41. In large part this is because fault in patent infringement, unlike the tort tradition in which it was developed, involves assessment of particular legal – as opposed to factual – consequences, consequences that are both rarely certain and unlikely to ever be desired.

    You’ve hit on a pretty important distinction there, and it’s a pretty good argument for an objective standard.

    However, while one does not often “desire” to infringe a patent, that’s probably the wrong question to ask. Even if you shoot someone in the head, intending to kill them, you don’t desire to commit murder, which is a purely legal consequence of your actions. You might not even know what the specific test is for murder, if you’re not a lawyer.

    The important distinction between most torts and crimes on the one hand, and indirect patent infringement on the other hand, is that most torts and crimes impose liability for conduct that “everybody knows” is wrong – conduct that one has every reason to expect that there’s some law against. We are all imputed with the knowledge that you shouldn’t shoot people in the head, so the mere act of doing so is culpable without further investigation. If you want to argue lack of subjective knowledge that shooting someone in the head is wrong, you have to go as far as to argue mental incapacity.

    I propose to you that indirect patent infringement requires knowledge of the legal consequences of one’s actions because that’s the only way to know that what you’re doing is wrong, and it’s the only way to even know you should be taking precautions in the first place – unless you’re copying a marked product, but then you still have notice. That level of knowledge is present in other areas of law, it’s just so obvious that nobody talks about it except crazy people.

    Of course, once you’re aware of the patent and the attendant risk of infringement, you need to be objectively reasonable in how you deal with that risk. An unreasonable belief that you don’t induce infringement, based on a facially incompetent legal opinion, should no more avail you than a clearly inadequate system for cleaning your slippery floor. An unreasonable belief that you do induce infringement won’t be actionable so long as no infringement actually occurs. There’s no cause of action for attempted infringement.

    This is a complex and interesting subject, and it merits further discussion. I enjoyed reading your article.

    Reply
  42. Agree.

    The Supremes like to cite their own cases when reviewing the Federal Circuit. However, this time, they should carefully consider the willful infringement standard announced by the Feds in Seagate. It makes a lot of sense in determining when conduct is “willful.”

    Reply
  43. Seems like we’re talking about ‘willful blindness’ here… with trademarks, damages can be just as high ….

    ” it suggests that a better approach is to conceive of the fault element as requiring an objective inquiry into whether a high risk of patent infringement would have been obvious to another in the accused party’s position”

    … that sounds strangely similar to 35 USC 103.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>