Global-Tech v. SEB: Amicus Briefs

By Jason Rantanen

Several amicus briefs supporting Global-Tech/neither party were filed yesterday.  Among them is a brief by 41 Law, Economics, and Business Professors in support of the Petitioner that parallels a similar brief filed in support of the petition for certiorari.  The merits brief, coordinated by Mark Lemley, Timothy Holbrook, and Lynda Oswald, argues that the Court should reject the "deliberate indifference" standard articulated by the Federal Circuit in SEB, and instead hold that inducement require that the defendant "be aware of a patent and encourage an act that it knows or should know would infringe that patent."  In anticipation of an argument that may be made in support of the Respondent, the brief also asserts that a strict liability standard for inducement would be disastrous.  The brief can be directly downloaded here: Download 10-6, tsac, 41 Law, Economics, and Business Professors

The full set of amicus briefs is available on the American Bar Association Website.  It includes briefs from:

  • The Business Software Alliance in Support of Petitioner
  • Cisco Systems, Inc., Dell, Inc., and Intel Corporation in Support of Reversal
  • The Clearinghouse Association and Securities Industry and Financial Markets Association in Support of Petitioner
  • Comcast Corporation, Facebook, Inc., Intuit Inc., Microsoft Corporation, Netflix, Inc., Overstock.Com, Inc., and SAP America, Inc. in Support of Petitioner
  • Google, Inc., in Support of Petitioner
  • NewEgg, Inc., in Support of Petitioner
  • The Software Freedom Law Center in Support of Petitioner
  • Yahoo! Inc., Ebay Inc., Electronic Arts Inc., General Motors LLC, Hewlett Packard Company, McAfee, Inc., Red Hat, Inc., and Symantec Corporation in Support of Petitioner
  • The Federal Circuit Bar Association in Support of Neither Party
  • The Intellectual Property Owners Association in Support of Neither Party

16 thoughts on “Global-Tech v. SEB: Amicus Briefs

  1. But in another sense if I sell you a device that is a direct infringement, in my view, I not only cause you to infringe, but I induce it.

    Fair enough, but if I buy a device from you in Taiwan, that device is not a direct infringement of any US patent, nor does it “cause” or induce infringement of any US patent unless you offer to ship it to me somewhere within the US.

    Also, I maintain that once you are found liable for direct infringement on the sale, there is no further remedy for inducement based on the same device for the same reason that if you were licensed under the patent your customers wouldn’t need their own licenses.

  2. Well, IANAE, there is also the issue of “causation.” The briefs make a big point on this issue. They distinguish “cause” and “induce.” The two are not the same.

    I agree — to a point. But in another sense if I sell you a device that is a direct infringement, in my view, I not only cause you to infringe, but I induce it. Here, I do not believe any knowledge of the patent is needed.

  3. “Would you, as a defendant, go into court and argue the invalidity of the plaintiff’s patent based solely on the fact that unrelated patents were recently invalidated 80% of the time? Would you expect the judge to be terribly receptive to that argument?”

    My point is a lot more sarcastic and intuitive than analytical. I’m sure you’re correct that a court wouldn’t consider the “at least 46%” as relevant/admissible evidence.

    On another point, wondering what you and others think. My impression is there are two shady actors here. The defendant copied, and deliberately followed a policy of not telling his patent counsel what he copied (is that to get a “clean” or “unbiased” search?), so that patent counsel didn’t find the relevant prior art. At the same time, this sure appears to be a mature art, where each of these patents ought to cover only very narrow (some would say pedestrian, even almost trivial) advances. Don’t see any compelling reason to favor either side.

    But in terms of the rule, and the purported conflict between this case and the DSU case, is “deliberate indifference” that much different than recklessness? Fed. Cir. Bar Ass’n Brief is interesting and makes some sense, but I’m not sure they’re right about “deliberate indifference” being tantamount to negligence. In any case, I don’t think anybody can sensibly argue that Grokster won’t apply here.

  4. It’s a whole lot more than “sometimes.”

    Yes, but it’s not particularized and it’s not a basis for a reasonable belief about any one patent. If I choose a patent at random, you can’t objectively reasonably believe that the chosen patent is invalid based on other patents being invalidated.

    If you flip a coin, each outcome has a greater than 46% chance of occurring, but that doesn’t give you a reasonable belief that the next flip will come up heads unless you know the particular coin is unfair that way. By the by, what do you think will be the fate of Schrodinger’s next cat?

    And that’s not even considering how tiny a sample size we’re working with, or the effects of selection bias on that sample. A percentage close to 50% might imply nothing more than litigants being well attuned to the economics of litigating only the very close cases and settling the rest.

    But let’s say the percentage is 60% or 80%. Would you, as a defendant, go into court and argue the invalidity of the plaintiff’s patent based solely on the fact that unrelated patents were recently invalidated 80% of the time? Would you expect the judge to be terribly receptive to that argument?

  5. “The mere fact that “at least 46%” of all patents are invalidated does not found an objectively reasonable belief that the particular patent before you is invalid.

    That’s why the standard is objective. So you don’t claim you sincerely believed it based on irrelevant, non-particularized information like “I heard patents are sometimes invalidated”.

    Posted by: IANAE | Dec 08, 2010 at 09:46 AM”

    You talk as if “at least 46%” is some trivial fraction of the total. It’s a whole lot more than “sometimes.” Furthermore, it is a generalized factor that could well be weighed in an “objective” test. Objective tests do not look at the motives of a particular actor, although they should look at the particular patent at issue. But what if “at least 46%” turns out to be 60% in the particular art? 80%?

    I think this Brief is symptomatic of Lemley’s pro-big business, pro-weak patent enforcement attitude, but what the hell, the Supremes will probably reverse the Federal Circuit, why else would they grant cert. ?

  6. The importer is the sole party responsible for the infringement,

    Fixed. Before people jump all over it for no reason.

  7. Ned: If the first seller is also not liable for this, he may be off-the-hook entirely, and yet be the sole party responsible for the infringement.

    If the first seller is selling outside the US, and not inducing the importation into the US, he’s not responsible for anything and he shouldn’t be liable for anything. You’d effectively be suing someone for selling a US-patented article outside the US and nothing more. The importer is the sole party liable for the infringement, in that case.

    smashmouth football: there could never be inducement liability, because it would always be possible to have an objectively reasonable belief that the patent at issue is invalid.

    The mere fact that “at least 46%” of all patents are invalidated does not found an objectively reasonable belief that the particular patent before you is invalid.

    That’s why the standard is objective. So you don’t claim you sincerely believed it based on irrelevant, non-particularized information like “I heard patents are sometimes invalidated”.

  8. At p. 9 of Lemley’s Brief: “Even after a patent is issued, tremendous uncertainty remains about its scope and validity. When challenged in litigation, at least forty-six percent of patents are invalidated.” (citations omitted)

    At p. 14 of the same Brief: “Courts may also wish to consider whether a company that is aware it is encouraging infringement of a patent should be able to defend against an inducement claim because it had an objectively reasonable belief that that patent was invalid.”

    If we accept both arguments, then, according to Lemley and his cohorts, there could never be inducement liability, because it would always be possible to have an objectively reasonable belief that the patent at issue is invalid.

  9. Tinla, the first sale may be outside the US and beyond the law. However, the buyer/US importer could resell in device in the US which is a direct infringement. If the first seller is also not liable for this, he may be off-the-hook entirely, and yet be the sole party responsible for the infringement.

    But for the first sale in this case being deemed to be the US sale, the party solely responsible for the infringement here would be completely free from liability, a prospect I find repellant.

  10. Ned, I still don’t understand why you, the first seller, would be off the hook. Why is the first seller not a direct infringer if “the device is a direct infringment” as you say?

  11. Utter folly? So – I sell you an infringing device. You resell it. Who is responsible for the damage?

    Lemley an his crew seem to believe the original seller should be let off the hook.

    Remarkable.

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