By Jason Rantanen
In Global-Tech v. SEB, the Supreme Court is addressing the state of mind requirement for inducement of infringement. The petitioner, along with several amicus briefs filed in support, argues that inducement should require that the accused intend to infringe the patent, and that the accused infringer must know of the patent being infringed. Earlier Patently-O discussions of those briefs are available here and here.
Last week, the respondent (SEB) filed its briefs. SEB argues that there is no basis for requiring evidence that the accused party possess actual knowledge of the patent; rather, inducement must require a lower state of mind standard than both 35 U.S.C. § 271(c) (contributory infringement) and willful infringement, a standard that is met by Pentalpha's conduct. In the alternative, SEB argues that Pentalpha's conduct constituted willful blindness, which SEB contends is a form of constructive knowledge and thus is sufficient for inducement. In addition, SEB argues that the Court should affirm because all the damages were attributable to Pentalpha's direct infringement and because, through it's finding of willful infringement, the jury necessarily found that Pentalpha had actual knowledge of the patent.
Several amicus curiae have also filed briefs in support of the respondent, all arguing that inducement should require only intent to cause the acts as opposed to some form of scienter with respect to whether those acts infringe a patent. Among these is the brief of a group of law professors led by Professor Ted Sichelman, argues that inducement should require only specific intent to cause the infringing acts – not some form of scienter with respect to whether the acts infringed a patent. The brief supports this argument by looking to tort and criminal law, pointing out that in those contexts it is not necessary for the accused to know that that the acts violate a legal duty – only that the accused intend to cause the acts themselves. It also argues that prior to the 1952 Patent Act, no court (with one exception as dicta), held that indirect infringement required knowledge of the patent. Thus, the brief argues, while inducement of infringement should require specific intent to further the acts of direct infringement, it did not traditionally – and should not – require any form of knowledge of whether those acts infringe a patent.
Oral Argument is set for Wednesday, February 23, 2011.
SEB's Brief:
Amicus Briefs in Support of Respondent:
- Brief for the American Intellectual Property Law Association in Support of Respondent
- Brief for the William Mitchell College of Law Intellectual Property Institute in Support of Respondent
- Brief for Law Professors in Support of Respondent
Note: I understand additional briefs may have been filed, including one on behalf of several companies and PhRMA, that do not appear on the ABA site. This post will be updated when those briefs are available.
yeah, it’s finding of willful infringement, the jury necessarily found that Pentalpha had actual knowledge of the patent.
Major Lolz – rumor has it that schooled boy is hangin out at techdirt bashing patents in a big way.
I wonder what the Eskimo would think O that.
“Ping, you are right”
You can stop right there Ned-o.
Schooled boy is absent. His firm is rather concerned with comments traceable back to them and muzzled his table-poundin ramblings.
Wilton, I meant to address the post to you.
I wonder why the district court instructed the jury to determine damages based solely on induced customer sales, while simultaneously instructing the jury on how to determine a RR for direct infringement. Did he believe the damages were the same, and if so, why?
Ping, you are right in part. The court did not order a new trial on damages only because the it sustained both theories of liability.
But, had the damages been the same regardless of the theory of liability, they would have been sustained if either, not both, theories been sustained.
That is the point I was making — the damages are not the same for direct and for induced infringement.
(Note also, there is no discussion of double recovery in the Federal Circuit opinion. I wonder why?)
Even the school boy is taking a turn at kickin Ned.
That’s pretty low on the totem pole.
Well, then, Wilton, take a look at the damages section of the opinion. The Federal Circuit ordered a new trial on damages because the jury instructions were for damages based upon sales of Pentalpha, but the jury verdict “form” was based upon the sales of Pentalpha’s customers. The Federal Circuit seem to think it made a difference as to the amount of a reasonable royalty whether the royalty was based upon the sales of Pentalpha or Pentalpha’s customers..
Are you reading the same opinion I’m reading? In no place of the opinion do I see the Federal Circuit ordering a new trial in SEB. The Feds affirmed the district court’s judgment.
Show me where in the opinion that the Federal Circuit ordered a new trial. When you’re done finding nothing, you can admit that you did not read the opinion very carefully.
Well, then, Wilton, take a look at the damages section of the opinion. The Federal Circuit ordered a new trial on damages because the jury instructions were for damages based upon sales of Pentalpha, but the jury verdict “form” was based upon the sales of Pentalpha’s customers. The Federal Circuit seem to think it made a difference as to the amount of a reasonable royalty whether the royalty was based upon the sales of Pentalpha or Pentalpha’s customers.
Wilton, you might think the damages on the sale of a cooker priced at $10 and a cooker priced at $100 will be the same. I do not.
If it’s the same cooker in each instance, the damages better be same. Patentees do not get 2 bites at the apple just by calling the direct infringer an inducer as well.
Wilton, you might think the damages on the sale of a cooker priced at $10 and a cooker priced at $100 will be the same. I do not.
IANAE, I beg to differ on the facts of this case. The cookers did not have to be modified in any way to infringe. They infringed the moment they were imported. They infringed on the shelf. They infringed on resell. They infringed in the hands of the end user. They infringed.
The defendant knew all of this and did not have to do anything in terms of encouraging importation, use, sales or offers to sell. What the defendant did was make an infringing cooker (and deliver it to his customer for importation into the US). That is how the defendent induced infringement.
Ned:Wilton, why bother? Damages!
You get damages for proving direct infringement too, Ned, and you don’t get anything extra for proving that the same party induced others to sell the same infringing articles. There’s no added bonus for proving that a direct infringer also induced infringement.
Ned: So you now contend that a person who sells a directly infringing device to a customer, knowing that that customer will directly infringe, is not an active inducer of infringement because she did not actually encourage the customer to do that which she knew the customer was going to do anyway?
Yes. Only, without the “now” because I always contended that.
If I sell a device to somebody without directly doing anything unlawful, it’s none of my business whether the buyer decides to find a way to infringe a patent with it. Of course, it’s a whole other kettle of fish if the device has no non-infringing uses, in which case selling it is tantamount to prompting the buyer to use it in an infringing way. But that’s not the case here.
Ned, standing at the foul line yet again.
Hey Ned, the action is down on this end of the court.
But, in practice, this may not be the case as lawyers will inevitably argue that a royalty of, for example, 200% might be a tad bit high, even though this royalty level might be necessary to achieve full compensation.
Of course they would argue that. It’s up to the patentee to convince the court that 200% is actually a reasonable rate, if in fact it is. An uphill battle to be sure, but imagine trying to convince an actual prospective licensee to pay you a 200% royalty. If you couldn’t do that, maybe 200% isn’t reasonable after all.
It’s probably easier if you have a single-patent article like a drug. The patented version costs $17 a pill, but the infringer could profitably sell it for, say, a quarter a pill. It’s not a tremendous logical leap to say that several dollars a pill would be a reasonable royalty on those facts.
Ned: This illustrates why we need a cause of action against the wholesaler where we base the damages award on the retail sales.
No, we don’t. We simply need to be able to prove that a royalty based on the retail sales is a reasonable thing to ask of the wholesaler in a licensing negotiation. Provided, of course, that it is.
The real problem with establishing hypothetical reasonable royalties is that there are never enough data points close enough to the royalty you’re trying to prove. Every patent is different, and the same patent might have a different value for every article. Unless your patent is for an entirely new article, or your claimed invention somehow translates directly into money, there is simply no evidentiary basis for a royalty that is analogous enough to satisfy the Federal Circuit.
It’s not like losing an arm, where we sort of have a rough starting point for how much that’d be worth to a typical person, and if you can prove that you’re a professional arm-wrestler or sleeve model you can wrangle a little more. 25% used to be our starting point, but now I guess we start from nothing.
IANAE, “Also, inducement is more than intent. Inducement also requires doing something that (loosely speaking) causes another person to complete an act of infringement.”
So you now contend that a person who sells a directly infringing device to a customer, knowing that that customer will directly infringe, is not an active inducer of infringement because she did not actually encourage the customer to do that which she knew the customer was going to do anyway?
Circling back to this case, if the case turned upon fixing labels on the cookers, I am sure future Chinese manufacturers could think of something to avoid liability for patent infringement in United States.
IANAE, your example about a drug that has two possible uses illustrates why inducement in this circumstance may require instructions that the infringing use be employed. “Use” and “method” are equivalent in this context, and require more than simple sales of a potentially infringing product to the defendant.
IANAE, I know, in theory, that one should be able to charge a higher royalty at the wholesale level in order to obtain full compensation instead of obtaining a royalty based upon the retail transaction. But, in practice, this may not be the case as lawyers will inevitably argue that a royalty of, for example, 200% might be a tad bit high, even though this royalty level might be necessary to achieve full compensation.
This illustrates why we need a cause of action against the wholesaler where we base the damages award on the retail sales. This makes a lot of sense and illustrates why inducement to infringe in the context of a wholesale transaction might be preferred.
Wilton, why bother? Damages!
Ned: what is the difference between acting with knowledge that an event will occur and intent that it will occur?
Nothing, unless that event is within the decision-making power of an independent third party whose actual fault it would be.
Also, inducement is more than intent. Inducement also requires doing something that (loosely speaking) causes another person to complete an act of infringement.
Cy Nical, why sue for inducement? Two reasons: first, the evidence of selling into the United States was iffy. The cookers were delivered to the US companies in China FOB. From my understanding, the US companies at that point owned them.
Second, there probably will be a difference in damages between the initial sale in China at Chinese prices and the resale in the United States based upon United States prices. The question is not necessarily about liability, but about an adequate recovery.
CY Nical, legally, what is the difference between acting with knowledge that an event will occur and intent that it will occur? You are making a big case out of this distinction here, as if there is a major difference between the two.
If this case turned on whether the defendant placed labels on the infringing cookers, I am sure future defendants could think of a remedy to avoid future liability for their customer’s patent infringement.
Wilton, extract the knowledge of the patent requirement, and what are the actual holdings in the Fed. Cir. cases?
Sigh. From the en banc portion of DSU Medical:
By the way, DSU Medical was decided in 2005. Happy now?
Now, what is your take on the issue. Mfg. sells a product to a retailer knowing he intends to resell. The product he sells him directly infringes a patent.
Then the manufacturer is directly infringing. Why bother with inducement?
Ned: I argued that all one had to show was that the defendant sold an infringing article with knowledge and intent that it be shipped into the US.
Wouldn’t that be “attempted infringement”?
Ned: I think knowledge that their customer intended to resell is sufficient.
What about cases where you sell a drug knowing that lots of patients will use it for a patented off-label use? What if the drug itself is prior art, and you’ve been selling it since before the new use was patented, but now that the new use is generally known you can’t help but be aware of it?
That’s why inducement requires more than mere awareness of the infringing act. It requires, for lack of a better word, inducement of the infringing act.
Ned: Now consider damages. The foreign MFG might be selling the cookers wholesale, but their customers are selling retail. Can the PO receive full compensation simply by obtaining a RR on the wholesale transacation, or does the current state of the law require him to prove a RR on the retail transaction?
A reasonable royalty (provided that it’s reasonable) on the wholesale transaction is enough to fully compensate the patentee. In real life, he would only have licensed the manufacturer/wholesaler, and he would never have sought or obtained any additional royalty from the retailer. If the court gives him everything he would have negotiated for, he can’t really claim that’s anything other than full compensation.
If he needs a higher royalty rate at the wholesale level than he might have gotten at the retail level, that goes to the determination of “reasonable”. Nothing more.
Ned: Now, what is your take on the issue. Mfg. sells a product to a retailer knowing he intends to resell. The product he sells him directly infringes a patent.
That’s direct infringement by the manufacturer, then. There’s absolutely no reason to discuss inducement at all, unless the question is asked on a law school exam or the plaintiff is careless enough not to claim for direct infringement.
Paul Morgan: If, as in this very case, the product sold or licensed by the patent owner was not marked with any patent numbers
It would seem that the products they sold in the US were marked with the patent number. What the infringer did was buy an unmarked product in Hong Kong, where a US patentee has no obligation or reason to mark.
So, why should that not also apply to alleged infringement inducers?
Doesn’t it? I read “no recovery” to mean “no recovery.”
Above comments note that knowledge of the patent is not required for direct infringement. But that is not the entire story. If, as in this very case, the product sold or licensed by the patent owner was not marked with any patent numbers [for asserted apparatus claims], as required by the marking statute, 35 USC 287, no recovery can be had for any patent infringement before actual notice or suit, and that notice or suit must identify the subject patents.
So, why should that not also apply to alleged infringement inducers? Should inducers be logically entitled to far more damages than direct infringers? Has this significant issue even been addressed?
I argued that all one had to show was that the defendant sold an infringing article with knowledge and intent that it be shipped into the US.
Actually you argued that “All that the patent owner would have to show is that the infringing cookers were sold to the defendants with knowledge that would be imported into the US” and that “a company may induce infringement simply by selling an infringing device to another who infringes by importation, use, reselling and the like.”
And I argued that SEB v. Montgomery Ward, your poster child for this theory, doesn’t support your proposition at least because the defendant in that case actually shipped the product into the United States.
Now consider when the sale/delivery takes place in the US.
Why? When sale/delivery takes place in the US, we’re talking direct infringement, which you can view as a strict liability tort. It makes absolutely no sense to talk about intent.
Wilton, extract the knowledge of the patent requirement, and what are the actual holdings in the Fed. Cir. cases?
Now, what is your take on the issue. Mfg. sells a product to a retailer knowing he intends to resell. The product he sells him directly infringes a patent. The retailer sells the product and infringes. Is the Mfg. liable for inducement without more if knowledge of the patent or that the product was patented is not required?
I’m sorry, Cy Nical, but you join the convo late. We all agree that the issue of knowledge of the patent is in dispute. It is the other elements of proof that are in question.
I argued that all one had to show was that the defendant sold an infringing article with knowledge and intent that it be shipped into the US. One did not have to additionally prove that the defendant actively asked their customers to import, use, resell, etc., or to use the devices in any particular way to infringe as this latter element is completely irrelevant when the device directly infringes.
This is pretty much what you said in your post, so we seem to agree.
Now consider when the sale/delivery takes place in the US. Does one have to prove that the defendant did anything more to prove inducement — such as ask their customer to resell? I think knowledge that their customer intended to resell is sufficient.
Since knowledge that the customer intends to import/use/sell/offer to sell is a given, the ONLY facts that the PO should have to prove are the fact of the sale to the customer who then infringes by importation/use/selling or offering to sell.
Do you agree or disagree?
Now consider damages. The foreign MFG might be selling the cookers wholesale, but their customers are selling retail. Can the PO receive full compensation simply by obtaining a RR on the wholesale transacation, or does the current state of the law require him to prove a RR on the retail transaction? I am going to guess that the PO is not going to obtain full compensation on the wholesale transaction as the RR would likely be quite high. That is why they need to sue either the retailers or the wholeseller for inducement in order to obtain an adequate reward.
That is clearly why SEB sued the defendant here for inducing infringement. Their damages proof was with respect to the defendant’s customer’s sales, not the defendant’s sales.
The joys of IMHO-Ned are only now being discovered by the blog’s vigilant watchdogs.
Way to go guys. We be all safe and comfy now.
Ghost, perhaps you would be so kind as to re-read the Feds’s opinion in SEB v. Montgomery Ward. The inducement theory was based on the fact of sales of an infringing device. Nothing more. Nada.
That’s selective reading on your part, Ned. The issue relative to inducement was whether specific knowledge of the patent was required. In the inducement section there was no discussion of whether Pentalpha encouraged the other parties to import into the U.S. for the simple reason that there was no dispute about that.
Note what the court said about Pentalpha’s intent to have these products enter the U.S.:
Other than the f.o.b. terms in the invoices presented to the jury, the record shows that Pentalpha intended to sell its deep fryers directly into the United States. Pentalpha itself affixed the American trademarks of Sunbeam, Montgomery Ward, and Fingerhut to the deep fryers, and it manufactured the deep fryers with North American electrical fittings. Moreover, the invoices between Pentalpha and the three U.S. companies all identify delivery to U.S. destinations.
That goes way beyond “Nada.” Not only did Pentalpha “intend” for the product to go into the U.S., they even shipped it into the U.S. for their customers! The Federal Circuit has already recognized the “f.o.b. Hong Kong” approach for the legal fiction that it is, and suggests once again that an inducement theory probably wasn’t necessary on these facts.
Nothing in SEB v. Montgomery supports your proposition that “simply selling selling an infringing device to another who infringes by importation, use, reselling and the like” constitutes inducement. You can’t make sweeping conclusions of law on an issue based on a case that doesn’t address that issue.
Well, Ned, your interpretation of SEB and your opinion regarding whether simply selling is enough appears to run directly contrary to the Federal Circuit’s opinions in DSU Medical, Water Technologies, Manville Sales Corp., and Hewlett-Packard. Unless I’m mistaken, the CAFC’s opinion in SEB did not overrule those cases. So you may want to rethink your position on what SEB says.
Ghost, perhaps you would be so kind as to re-read the Feds’s opinion in SEB v. Montgomery Ward. The inducement theory was based on the fact of sales of an infringing device. Nothing more. Nada. Of course the defendant knew and intended the devices enter the US. But the active inducement part seems to be limited just to the sales of the infringing devices to a defendant. The courts do not, it seems, require the almost non nonsensical proof that the inducer encouraged use or resale, or as here, importation? That would be implied in fact.
Does one actually have to encourage the importation, use or reselling, or may he simply be aware of it?
The law says that the accused must specifically intend the acts which constitute infringement. That seems to foreclose liability for mere knowledge.
We have a difference of opinion here as whether a company may induce infringement simply by selling an infringing device to the another who infringes by importation, use, reselling and the like.
The difference of opinion is between you and everyone else. So it’s not that interesting after all.
Now, this is really getting interesting. We have a difference of opinion here as whether a company may induce infringement simply by selling an infringing device to the another who infringes by importation, use, reselling and the like. Does one actually have to encourage the importation, use or reselling, or may he simply be aware of it? The active part of statute can be considered the sale of an infringing device.
Okay, so when is notice not necessary? And if there are instances where notice is not necessary, then what the heck is the point of the marking statute?
When the patentee doesn’t sell/market the patented product, which is most of the time in the litigation I’ve worked on.
Go read 35 USC 286 and then read section 287. The latter is an exception to the general rule in the former.
The point of the marking statute is that IF the patentee is selling a patented product, he needs to let the public know that it can’t be copied. We’ve discussed the marking statute elsewhere, ad nauseum. My personal opinion is that it is a bit dated, but it is what it is.
Okay, so when is notice not necessary? And if there are instances where notice is not necessary, then what the heck is the point of the marking statute?
Whether or not that’s true, isn’t notice, or at least constructive notice, of the patent-in-suit necessary to obtain damages for direct infringement?
Only sometimes, Wilton.
I have a question. SEB is arguing that knowledge of the infringed patent is not necessary to prove inducement. Whether or not that’s true, isn’t notice, or at least constructive notice, of the patent-in-suit necessary to obtain damages for direct infringement? If so, then shouldn’t the same be required of the alleged inducer in order to obtain damages therefrom? It seems to me that in order for the plaintiff to obtain damages for past infringement, knowledge of the patent on the part of the inducer will have to be proven at some point during the case.
I’m pretty sure that’s not the standard for inducement, even irrespectively of awareness of the patent. Simply knowing that your customer intends to infringe is not inducement.
“[P]roof of actual intent to cause the acts which constitute the infringement is a necessary prerequisite to finding active inducement.” Hewlett-Packard Co. v. Bausch & Lomb, Inc., 909 F.2d 1464, 1469 (1990).
Ned: All that the patent owner would have to show is that the infringing cookers were sold to the defendants with knowledge that would be imported into the US.
I’m pretty sure that’s not the standard for inducement, even irrespectively of awareness of the patent. Simply knowing that your customer intends to infringe is not inducement.
IANAE,
“It’s just that you have to also induce the product into the US, or else you’re not factually responsible for the infringement.”
I’m not so sure whether this is right. But I will concede this point for the time being.
As to why the defendant here was sued for 271(b) inducement, they had, I believe, more than just the one US customer. The inducement action would extend to all of them without regard to whether the sales were FOB or not, without regard to whether they were the importing party or not, etc. All that the patent owner would have to show is that the infringing cookers were sold to the defendants with knowledge that would be imported into the US.
The Feds would further require knowledge of the patent, but that is the issue now before the Supreme Court.
Ned: You said that a party outside the US cannot be liable for inducing infringement inside the US?
Is that right?
No, that’s not right. What I said is that a party that sells the claimed product outside the US can’t infringe the US patent by that sale alone.
Ned: The infringement took place in the US.
I think we’re getting closer to the issue now. No matter where a company is, you have to look at what act constituted the infringement, who did it, and who (if anyone) induced it.
On the facts of this case, the products were manufactured outside the US. That alone is not an infringing act, and no infringing act is completed until the products were imported into the US, with both the importation and eventual domestic resale constituting acts of infringement.
I’m actually not sure why contributory infringement is even an issue in this case, since Global-Tech actually invoiced and shipped the products to the US. You’d think that would be enough to make out direct infringement, and it was. I can’t imagine how one might simultaneously draw the conclusions that Global-Tech did not directly infringe but did induce infringement on these facts.
Still, they did a lot more to induce US infringement than merely producing an article overseas and selling it to US companies. They designed the product to run off a US wall outlet and printed the instructions in English, which pretty much made them suitable only for importation into the US. That’s on top of actually shipping them in bulk to retailers in the US, which could be argued to induce sale in the US even if you ignore infringement by importation.
Nobody is talking about personal jurisdiction or where parties are located. It’s all about who is doing the infringing.
Ned: I do not recall whether anyone even raised the issue that liabity for inducing infringement in the US was excused if the acts of inducement took place outside the US.
I don’t see how that could ever be a viable defense to inducement. It’s just that you have to also induce the product into the US, or else you’re not factually responsible for the infringement.
“personal jurisdiction is a side issue”
Oh really?
That’s one side issue that will stop your argument in its tracks.
There is quite a difference between one merely selling a US patented item overseas and the rest of your arguments. You may have meant to conidtion your statement a little better – and by all means restate your original position as need be – but to continue to flail is unseemly.
Turning a blind eye to this basic fact explains why you are stumbling here.
looking glass,
The infringement took place in the US.
That is enough to hail the foreign entity into court for inducing such patent infringement provided, of course, one can obtain personal jurisdiction. But, personal jurisdiction is a side issue. If one can obtain it, as was done in this case when the foreign manufacturer responded to his indemnity obligations with respect to one customer, the patentee should be able to sue him for ALL US infringement for which he is ultimately responsible.
IIRC, the Supremes have already extended the reach of US law to acts abroad that have effect in the US in the case of the anti-trust laws. I see no reason why the same reasoning does not apply here.
Recall, in this very case the defendant was held liable for inducing infringement in the US even though the acts took place outside the US. I do not recall whether anyone even raised the issue that liabity for inducing infringement in the US was excused if the acts of inducement took place outside the US. But if the “defense” was not raised, there was a good reason for it not being raised.
“Does the law care one iota that the sale took place outside the US?
No.”
Oh really?
As New Light and IANAE point out, you have a problem with “extraterritoriality” here.
Any law you want to cite can only have effect if that law reaches the party.
ping a ling,
OK.
Now please explain to me why the commercial law universally provides indemnity again one who sells you an infringing device? Does that law negate indemnity IF the seller did not know of the patent?
No.
Does the law say that the seller is off-the-hook if he himself is not liable for patent infringement for any reason?
No.
Does the law care one iota that the sale took place outside the US?
No.
Now, slowly, please, explain to me why the patent law does not similarly impose responsibilty for my patent infringement on the person who caused it unless he was aware of the patent?
Cite the words in 271(b) that negate that liability, please.
I A N A E!!!!!
You said that a party outside the US cannot be liable for inducing infringement inside the US?
Is that right?
I suggest you familiarize yourself with the facts of this case.
OK?
Now discuss.
You know, Doyle Brunson considers a pair of deuces to be better starting cards than A-K, and in fact the deuces will win slightly more often.
Also, it only takes three deuces to beat two pair, and a pair on the board will win you less money against someone with two pair because he knows you have him beat with 2-anything.
Peter peter pizza face,
you claim to hold the King and Ace.
I tell you now i only hold deuces,
But they apply to all your ruece’s.
On the flop your good you gain an Ace.
But I also gain a Two.
Now a King comes nice and neat.
For Peter yes it do.
But then the river that leads to Weir,
It surley be my Two.
So you get Big Slick times twice,
And my four deuces crush you.
Ned: IMHO, the (maker of and) seller of an infringing device to their customers is the one responsible for the infringement.
Okay, yes, “selling” is one of the ways to infringe a patent. However…
Ned: We need to be able to sue the seller for infringement even if they are located outside the US as is the defendant manufacturer in the present case.
I believe my learned colleague was groping for the word “extraterritoriality”. You can’t hold somebody liable for infringement of a US patent based only on selling the claimed product outside the US. That’s so ridiculous I can’t believe it has to be explained to you again.
If the seller isn’t importing it into the US, not only has he done nothing wrong but he’s induced nobody to do anything wrong. It’s none of his business where his customers carry the device after he’s sold it. Even if each of his customers buys a single article and walks it across the border into the US. Unless he’s doing something more, like opening a shop in Canada that is visible from across the border, with big signs facing the US and saying what a wonderful product it would be if only you could use it somewhere English-speaking.
I think you’re conflating “the party responsible for the infringement” with “the party you’d prefer to sue”. Go on, find me a fact pattern where the party responsible for the infringement (as opposed to “responsible for the product”) can’t be sued. Bankruptcy of the infringer doesn’t count.
Merits briefs are here, including what look to be 11 amicus briefs.
link to scotusblog.com
IMHO-Ned Law.
Ya gotta love the ability to ignore the trivialities of actually making sense.
Sweet sarah,
I do not think that Dim will be able to help you (or hurt you). Maybe you can help him…?
If the party responsible for the infringement cannot be sued directly, we’d simply have to pass another law stating that he is. Now just how would we word such a new law? Identically with the currently law? It would seem. But we would have to add this:
Without regard to prior knowledge of the patent.
Such stupidity should be avoided in the first instance by yet another Supreme Court slap down of the Federal Circuit.
New light, making the foreign sellers liable as inducers is a straight-forward way of addressing a problem the Feds have been wrestling with in recent cases. They have stretched the theory of what constitutes “selling” in the US to absurd lengths in order to hold the foreign manufacturer liable. There would have been no need for this if they could be sued as inducers for all the damage they do the moment they come to the aid of one of their customers claiming indemnity.
You must give the whole background evidence, so a “MODERN” Family deals fairly with what is put before them. Don’t you think that is fair new light? Need a flashlight?
Seems pretty straight forward. Reminds me of In re Donaldson and paragraph 6 of 112. The language seems pretty clear. Prediction: no scienter required.
Whether that’s the right result (e.g., should scienter be required) can be debated?
And were Mike an Louise really in Rockland at the same time? I sure hope so.
How can you Quash something when I ain’t there to say anything? A worm and now a Quash wow. sounds like some kind of a beetle manifestation.
What is it called when you entice someone into a Mortgage with a lower rate, then demand more land for it, then immediately breach the contract by stopping their water, then not cap the wells so the ground Water is destroyed? Any of you Scholars know. How many laws are broken in that instance? and then keeping the Person that has been harmed in what they call an intellectual Box, and then keeping from getting a Lawyer to help them get out. How about you New Light? You seem to read the Laws verbatim, now address this Query would you?
New Light it seems you are in the dark.
ChicagoIP,
How does one start off as a not-willful not-inducer of product B and later become an inducer for product B during some later year?
Unless youo have left out some detail (like the person changed what he was doing in the interrim), I am not following your story and how it can be real.
Thanks for the clarification.
Ned,
How does the foreign manufacturer be a seller to US customers and not import?
If the importation is done by the US customer, it is that customer (and that customer alone) that has violated the law.
I think you have multiple issues with basic legal principles including extraterritality (sp?), standing, and actual patent law.
I think I understand what you are wishing for, but see no possible way of balancing the law with that wish.
IMHO, the (maker of and) seller of an infringing device to their customers is the one responsible for the infringement. We need to be able to sue the seller for infringement even if they are located outside the US as is the defendant manufacturer in the present case. The patentee should NOT be placed in a position that he has to sue every single customer to be provided full compensation for the infringement. But that is the potential consequence of the decision five years ago by the Feds that knowledge of the patent is required for inducement. This requirement potentially leaves the patent holder without a remedy against a foreign seller to US customers who himself has not has not made, used, sold, imported or offered to sell inside the US.
FWIW, one of the Fuji v. Jazz cases/appeals has an interesting inducement/willfulness fact pattern involving a defendant who has full knowledge of the patent, but insist that his action was not willful or inducing, because he believed that (1) the patent was not valid, (2) he was not infringing, (3) the plaintiff was misusing the patent, (4) the patent rights were exhausted under first sale, (5) he was engaged in permissible repair not infringing making, and (6) he didn’t know.
The pattern got more interesting when Fuji tried to enforce the judgment against the willful inducer in bankruptcy. In re Benun, 386 B.R. 59 (Bankr. D.N.J. 2008). The decision went like: He was a willful inducer for some product A during some year, a not-willful not-inducer for other product B during those same year, and an inducer for product B during some later year. Among these willful or not willful inducement or non-inducement liabilities, some of these willful and inducing actions were sufficiently willful and malicious to warrant preserving liability beyond bankruptcy (non-discharge) and other willful and inducing actions where not sufficiently willful and malicious to warrant preserving liability beyond bankrutpcy.
Oh, and some of the liablity deemed sufficient willful and malicious that survived beyond bankruptcy was nonetheless not willful enough to meet the standard of willfulness in patent law.
No One: 1. In criminal law, ignorance of the law is no excuse. Ignorance of the existence of a patent should also be no excuse. Otherwise there will be an epidemic of willful blindness.
In criminal law, ignorance or mistake of fact is an excuse. In interference with contractual relations, ignorance of the contractual relation is an excuse. The existence and scope of a patent are facts.
Also, willful blindness isn’t actually ignorance. It’s knowledge. An epidemic of willful blindness would lead to an epidemic of liability for inducement.
No One: 2. The threshold for creating a legal controversy is so low that it can be triggered by even suggesting a friendly discussion about your patent.
I suppose that’s relevant somehow? Surely you’d have the requisite level of knowledge for inducement once someone suggested a friendly discussion about a particular patent of theirs.
Among these is the brief of a group of law professors led by Professor Ted Sichelman, argues that inducement should require only specific intent to cause the infringing acts – not some form of scienter with respect to whether the acts infringed a patent.
And just to be clear: the intent to induce infringement of a method claim by sale of an unpatented device with a substantial non-infringing use can NEVER be shown absent express instructions from the inducer to the direct infringer.
Kaplan and the jury hot topics
no one The threshold for creating a legal controversy is so low that it can be triggered by even suggesting a friendly discussion about your patent.
Meanwhile, the Federal Circuit seems to have just held that practicing a prior art method and thinking about or having a friendly discussion about the results of that prior art method in light of some teaching in a patent’s claims may constitute infringement of that patent.
Talk about judicially sanctioned theft …
1. An epidemic of willful blindness is worse than an epidemic of potential liability.
2. Companies suing patentees is not a problem.
Judicially sanctioned theft is good for the soul.
EXACTLY!
1. In criminal law, ignorance of the law is no excuse. Ignorance of the existence of a patent should also be no excuse. Otherwise there will be an epidemic of willful blindness.
2. The threshold for creating a legal controversy is so low that it can be triggered by even suggesting a friendly discussion about your patent.
Companies will assert they don’t know about your patent, and if you only bring it to their attention they will sue you.
This is judicially sanctioned theft.
“but with a limited weasel-out-of-liability clause for infringement without notice.”
fixed.
As for the infringement as intuitively bad or not, that would be up to debate as some would see it bad (including the law as direct infringement is a strict liability issue)
Also, you forgot to discuss False Marking, which falls to the criminal side, I think.
Now that I think about it some more, I suppose it boils down to whether you consider ignorance of a patent to be inexcusable ignorance of the law (like criminal law or torts), or excusable ignorance of a fact (like a contract).
It’s not immediately obvious which one it should be. Patents are user-defined like contracts, but they’re also available to the public like statutes, but with a weasel-out-of-liability clause for infringement without notice.
While the grant and validity of patents might be considered a matter of public policy akin to criminal law or torts, infringement and enforcement are very much private matters between the parties akin to contracts.
What’s more, unlike most torts and crimes, the acts that constitute patent infringement probably don’t intuitively strike us as inherently bad things to do unless we’re aware of the patent. Even if you don’t know the technical definition of murder (for example, and most people don’t), you could be expected to figure out for yourself that any action likely to get you charged with murder is a bad thing to do.
And then there’s the broader question of what responsibility you should have to ensure that someone else’s activities are lawful with respect to other private parties, and whether it’s reasonable to expect that someone else to conduct his own activities within the law.
Of course, all this might be moot, since this is so blatantly a case of willful blindness, and willful blindness is tantamount to actual knowledge. But it’s an interesting discussion nonetheless.
Paul: if ignorance of the patents is not a defense, then how do you distinguish appropriate liability for inducing infringement from making everyone selling almost anything potentially liable?
Well, the direct infringer is liable in any event, so the patentee is not without recourse. The inducer is not the direct infringer, so if he simply specs out a product (or whatever), he’s not doing anything wrong. It’s up to the direct infringer to satisfy himself that what he’s doing is lawful, or to secure indemnification from whoever is paying him to do it, or otherwise to refuse to perform the infringing act.
How is this unlike a situation where A might offer B a business proposition that, if accepted, would force B to breach his existing contract with C? It’s ultimately B’s responsibility to conduct himself according to his contract. If A doesn’t know about the contract between B and C, he should be able to argue in his defense that it was B’s responsibility to refuse to do anything unlawful.
HO HO HO and a bottle of scum.
If I were all of you I’d be angry, very angry at the worm that hid all of what I was saying. Piracy was what was to be addressed.
yes it be the AUX.
Pray for, Paul, do tell why you believe such is not analogous? And pray distiinguish why the Court would join you rview, whenceforth, in the past they held the opposing view?
Whither thou comest thy senses?
Nah – ghetto speak be much easier.
C’mon Homey, back up what you say, specially as the Supremes have held the opposite.
Page 47 of the SEB brief faces up to the real rub here, which is, if ignorance of the patents is not a defense, then how do you distinguish appropriate liability for inducing infringement from making everyone selling almost anything potentially liable?
Interestingly, they specifically suggest:
“Accordingly, any rule that the Court sets out in this case can be quite narrow:
• First, the Court could hold that the Grokster
standard governs, and Pentalpha’s highly
culpable conduct constituted “other affirmative
steps taken to foster infringement.”
• Second, even more narrowly, the Court could
hold that a defendant cannot be willfully
blind to another’s intellectual property and
remain immune from inducement liability.
• And third, at the most narrow, the Court
could hold that in the limited circumstances
where a defendant reverse engineers and
copies a commercial product the copier is
obliged to at least make some effort to ascertain
whether the copied product is protected
by U.S. patents before selling the copies on
the U.S. market.”
[I’m not touting any of these, but I do think that a software system clearly intended for massive transfers of copyrighted materials is not analogous to copying a product that might be validly patented or not.]