Global-Tech v. SEB: Supreme Court Affirms CAFC Result But Not “Deliberate Indifference” Standard

By Jason Rantanen

Global-Tech Appliances, inc. v. SEB S.A. (2011)  Download Global-Tech v SEB
Majority: Alito (author), Roberts, C.J., Scalia, Thomas, Ginsburg, Breyer, Sotomayor, Kagan.  Dissent: Kennedy.

In an 8-1 decision this morning, the Supreme Court affirmed the result in Global-Tech v. SEB, holding that while inducement of infringement of infringement requires knowledge that the induced conduct itself infringes, that knowledge element can be met by a showing of "willful blindness."  In reaching this conclusion, the Court rejected the Federal Circuit's adoption of a "deliberate indifference" standard.  By endorsing a "willful blindness" approach to knowledge – which Justice Kennedy's dissent indicates is a novel move – this opinion may have profound implications well beyond the area of intellectual property law.

Inducement of Infringement Requires Knowledge That the Induced Acts Constitute Patent Infringement
The Court first held that, like contributory infringement, inducement of infringement requires that the accused inducer know that the third party's conduct constitutes an infringement.  This is separate from any intent required to produce the acts themselves (i.e.: making, using, offering to sell, selling, or importing of a patented invention).  After recognizing that there are two conflicting interpretations of 35 U.S.C. § 271(b), the court looked to inducement's common origin with contributory infringement (which the Court in Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U. S. 476 (Aro II) held required knowledge of infringement) and concluded that the same knowledge requirement applies to inducement:

Based on this premise [that contributory infringement requires knowledge of infringement], it follows that the same knowledge is needed for induced infringement under §271(b). As noted, the two provisions have a common origin in the pre-1952 understanding of contributory infringement, and the language of the two provisions creates the same difficult interpretive choice. It would thus be strange to hold that knowledge of the relevant patent is needed under §271(c) but not under §271(b).

Knowledge Requirement Satisfied by Willful Blindness
Turning to the question directly presented by the case, the Court further held that while deliberate indifference does not satisfy the knowledge required for § 271(b), willful blindness does.  In reaching this conclusion, the Court looked to criminal law, which holds that defendants cannot escape the reach of the law by deliberately shielding themselves from clear evidence of critical facts that are strongly suggested by the circumstances.

Willful blindness exists when two requirements are met.  First, "the defendant must subjectively believe that there is a high probabilty that a fact exists."  Slip Op. at 13.  Second, "the defendant must take deliberate actions to avoid learning of that fact."  Id.  According to the Court, "[t]hese requirements give willful blindness an appropriately limited scope that surpasses recklessness and negligence."  Slip Op. at 14.  Furthermore, "[u]nder this formulation, a willfully blind defendant is one who takes deliberate actions to avoid confirming a high probability of wrongdoing and who can almost be said to have actually known the critical facts."  Id.  "By contrast, a reckless defendant is one who merely knows of a substantial and unjustified risk of such wrongdoing, see ALI, Model Penal Code §2.02(2)(c) (1985), and a negligent defendant is one who should have known of a similar risk but, in fact, did not, see §2.02(2)(d)."

While this was not the test applied by the Federal Circuit, the Court concluded that the evidence, when considered under the appropriate standard of review, met its willful blindness standard.  In reaching this conclusion, the Court looked to the Pentalpha's decision to copy all but the cosmetic features of SEB's fryer; its decision to copy an overseas model of SEB's fryer, and its decision not to inform its attorny that the product "was simply a knockoff of SEB's fryer." 

Justice Kennedy: Inducement Should Require Actual Knowledge
Writing in dissent, Justice Kennedy would have held that willful blindness is insufficient to satisfy the knowledge requirement of inducement.  "Willful blindness is not knowledge; and judges should not broaden a legislative proscription by analogy."  Kennedy Dissent at 1.  In particular, the Justice disagreed that the Court had a long precedent of invoking the doctrine of willful blindness as constituting knowledge in the criminal context.  "[T]his Court has never before held that willful blindness can substitute for a statutory requirement of knowledge."  Dissent at 3.

Following from this, Justice Kennedy warns of the enormous ramifications Global-Tech may have:

The Court appears to endorse the willful blindness doctrine here for all federal criminal cases involving knowledge. It does so in a civil case where it has received no briefing or argument from the criminal defense bar, which might have provided important counsel on this difficult issue.

There is no need to invoke willful blindness for the first time in this case. Facts that support willful blindness are like these tend to be the only available evidence in any event, for the jury lacks direct access to the defendant’smind. The jury must often infer knowledge from conduct,and attempts to eliminate evidence of knowledge may justify such inference, as where an accused inducer avoids further confirming what he already believes with good reason to be true. The majority’s decision to expand the statute’s scope appears to depend on the unstated premisethat knowledge requires certainty, but the law often permits probabilistic judgments to count as knowledge.

Dissent at 3-4.

53 thoughts on “Global-Tech v. SEB: Supreme Court Affirms CAFC Result But Not “Deliberate Indifference” Standard

  1. The case probably made no difference to the outcome as the inducer was probably liable for all the damages regardless give their obligations to indemnify their US resellers. They appeared in the US actions as indemnitors, IIRC.

  2. The Court’s ruling makes sense because of a very important point: Pentalpha did not tell its attorney that it had purchased and directly, deliberately copied the SEB fryer. If Pentalpha had informed its lawyer as to this fact, then the attorney likely would have found the patent. Because of this deliberate failure to inform the attorney of its copying, the prior art search was just a cover, and “willful blindness” makes complete sense. That considered, I’m glad this patent litigation was decided in favor of SEB.

  3. Does public-spirited SCOTUS

    What makes you think that SCOTUS is “public-spirited”? What exactly do you mean by this high-but-empty-sounding phrase?

    knowing that it is their job to straighten out tangled webs

    What makes you think that their job is to straighten out tangled webs?

    that their first class legal minds will be able to cut through any degree of complexity?

    Are you aware of the term “gobbledygook”?

    and to save their faces it will have to be something that looks bold and decisive

    Sort of like when they decide that cert was (after all) improvidently granted?

    Sometimes trying to be bold and decisive “in order to save face” has the exact opposite effect. Real First Class Legal Minds know this.

  4. Does public-spirited SCOTUS agree to take cases in areas of the law that have become complicated, knowing that it is their job to straighten out tangled webs, and confidently supposing that their first class legal minds will be able to cut through any degree of complexity?

    But when they come to write their decision, they find that, after all, the task is beyond their abilities.

    But having taken the case, they are then trapped into issuing a policy statement, and to save their faces it will have to be something that looks bold and decisive.

  5. Yes, as others have said…

    (this would be yet another that appears to agree with me)

  6. As others have said, the difference between “willful blindness” and “deliberate indifference” is “pedantic sophistry.” When affirming the Federal Circuit, why can’t patent law ignorant SCOTUS simply leave well enough alone?

  7. So if Hardworking is Ping, I suggest you restrain your attacks, less you want Ping to return.

    [eye roll]

  8. ANL, I will agree with you. Hardworking has turned a new leaf. He really seems committed to toning down the ad hominems.

    Also, ANL, I also enjoy our discussions. Thanks.

  9. New, thanks for your politeness. He’s all yours! I can ignore his posts just as easily as I did ping’s, so if you get something out of them, then that’s perfectly fine with me.

    Regarding restraining my attacks, I made exactly one. I don’t anticipate any more.

  10. While not a prolific poster, I like to think of myself as a regular contributor (and yes, there very much is a difference between posting and contributing, in fact, I would dare say that most regular posters contribute only a small portion of substance on any ongoing basis).

    I will take issue (and thus disagree) with your line of posts here Cy (and I note that I do so, knowing that we have recently mended fences of sorts), in relation to your comments to Hardworking.

    If indeed Hardworking is Ping, then there are at least a number of critical changes that should be noticed and encouraged:

    Readability – the loss of the Ping-slang is no loss at all and Hardworking’s posts are indeed “coherent.” In fact, I find it much easier to follow what Hardworking is saying than Ned Heller’s arguments (and I do respect Ned, even though there are at times I am frustrated by him).

    Answers – Hardworking readily gives answers rather than coy “observations.”

    Respect – There is an appreciable difference in levels of personal abuse between the postings of Hardworking and Ping. While Hardworking does employ ad hominem, he does so to no more degree than anyone else posting, and his attacks are not wildly abusive and in fact generally adhere to the actual, or at least perceived, character of those he addresses.

    I for one enjoy Hardworking’s posts, whereas Ping was not palatable in the least.

    So if Hardworking is Ping, I suggest you restrain your attacks, less you want Ping to return.

  11. even on the rare occasion that you manage to put together a coherent sentence

    Less than a week ago…

    Cy Nical said in reply to Hardworking Answerer…

    And Cy – equity is just as much part of a “legal status” in an ajudication on the merits. Decisions in equity carry the force of law, do they not?

    Sure they do, and I was probably (more than?) a little off track in my previous comment.

    Mighty nice glass house you have there my friend.

  12. Whatever (especially when “exploring issues” is merely constrained to exploring issues the way you see things, no matter how thinly sliced that may be).

    Your lack of response will surely be an improvement, so “regular contributors” thank you in advance.

  13. Thanks for the advice, HW. The fact is that I couldn’t give a flip about who you are. But you have consistently demonstrated that you are incapable of carrying on an honest exploration of the “issues,” even on the rare occasion that you manage to put together a coherent sentence of your own construction.

    Go ahead, find one regular contributor here who disagrees with me.

    On second thought, don’t bother, because I won’t be responding to your “observations” again.

  14. Whatever” indeed.

    From Hal Wegner:

    “Pedantic Sophistry”: Several commented on the distinction between “deliberate indifference” and “willful blindness”. One litigator put it bluntly: “Pedantic sophistry! To a jury of average people, what’s the difference between willful blindness, deliberate indifference, and conscious avoidance? [How many] angels on the head of a pin, if you ask me.”

    Cy, a word of advice: stop being so concerned with who is saying something and pay more attention to what is being said.

    That more than anything else will be helpful in exploring issues.

  15. The condification of contributory infringement was never intended to change the basic theories. But it has.

    Thank you. Now please stop using the term incorrectly. It’s confusing. You’re not doing yourself or anyone else any favors.

  16. Malcolm, and what I am trying to tell you is that prior to 1952, contributory infringement was a label attached to any and all forms of infringement other than one party doing all steps in a process, or making or selling the infringing device. The legal theories of all contributory infringement were ground in theories of joint and several liablity in tort.

    The condification of contributory infringement was never intended to change the basic theories. But it has.

    Now, if we want to find infringement of a process patent where the steps are performed by multiple parties in coordination (cf, Univis Lens), we have to call it something other than contributory infringement, or else find no infringement whatsoever.

    Joint direct infringement has to be the way to go at this point it seems. But this, in the historical sense, nonsense.

    That was one of the points being made by Newman’s dissent in Akamai.

  17. Ned When two parties cooperate to infringe a patent, I see you to suggest that one can neatly avoid the holding in this case by not labelling it contributory infringement, but instead by labelling it something else entirely, and by calling whatever it is now labelled a form of direct infringement.

    Ned, I’m just trying to understand your comments and it gets confusing when you mix up the terminology. I really don’t care if some professor or some Supreme Court decision has made the same mistake.

    This is contributory infringement:

    35 U.S.C. § 271(c): Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or an apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringment of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.

    Two or more parties working in concert (allegedly or not) to practice the steps of a claimed process is not “contributory infringement.” It’s joint infringement.

  18. Then there was the (real) case of the church sued for infringement for using infringing stained glass windows. They impleaded the GC, who in turn impleaded the architect who specified the infringing design.

    Gone like the wind. The architect is now off the hook. The party most responsible is left scot free.

    Lemley, you dog.

  19. As bad as it is, its still far better than having the Court affirm the “deliberate indifference” standard it was asked to uphold.

    The “willful blindness” standard seems to parallel the “actual malice” standard in defamation cases against public figures – another instance where the courts seemingly have to look into the subjective mind of the defendant.

    Judge Posner has provided what I believe to be the best definition thus far of “actual malice” in Desnick v. ABC, 233 F.3d 514 (7th Cir. 2000). In it, he draws analogy to the “willful blindness” standard as used before the Global-Tech ruling. Dunno if this will shed some light, or just muddy the waters further, but for your consideration from the Desnick ruling:

    [“Actual malice”] is a term of legal art that means not what it seems to mean but that the defendant either knew that the defamatory statement…was false or was recklessly indifferent to whether it was true or false. E.g., Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 510 (1991); Milsap v. Journal/Sentinel Inc., 100 F.3d 1265, 1270 (7th Cir. 1996) (per curiam). “Reckless indifference” denotes the same state of mind that must be proved to establish liability for infringement of a federal right under color of state law or for violation of the federal mail fraud statute: knowledge by the defendant that there was a high risk of harm to the plaintiff coupled with a failure to take any feasible measure to counter the risk, either by investigating further to see whether there really is a risk and how serious it is or by desisting from the risky activity. See, e.g., Farmer v. Brennan, 511 U.S. 825, 837-38 (1994); Tesch v. County of Green Lake, 157 F.3d 465, 474-75 (7th Cir. 1998); Billman v. Indiana Dept. of Corrections, 56 F.3d 785, 788-89 (7th Cir. 1995); Archie v. City of Racine, 847 F.2d 1211, 1219 (7th Cir. 1988) (en banc); United States v. Dick, 744 F.2d 546, 551 (7th Cir. 1984); Chance v. Armstrong, 143 F.3d 698, 703-04 (2d Cir. 1998); United States v. DeSantis, 134 F.3d 760, 764 (6th Cir. 1998); Keeper v. King, 130 F.3d 1309, 1314 (8th Cir. 1997).

    In a defamation case by a public figure, therefore, “the plaintiff must demonstrate that the author ‘in fact entertained serious doubts as to the truth of his publication,’ . . . or acted with a ‘high degree of awareness of . . . probable falsity,’” Masson v. New Yorker Magazine, supra, 501 U.S. at 510 (quoting St. Amant v. Thompson, 390 U.S. 727, 731 (1968), and Garrison v. Louisiana, 379 U.S. 64, 74 (1964), respectively), or, while suspecting falsity, deliberately avoided taking steps that would have confirmed the suspicion. Harte-Hanks Communications, Inc. v. Connaughton, 491 U.S. 657, 692-93 (1989) (“intent to avoid the truth,” id. at 693); Eastwood v. National Enquirer, Inc., 123 F.3d 1249, 1251 (9th Cir. 1997); McFarlane v. Sheridan Square Press, Inc., 91 F.3d 1501, 1510 (D.C. Cir. 1996). (For the analog to this “ostrich” or “willful blindness” principle in cases under 42 U.S.C. sec. 1983, see West v. Waymire, 114 F.3d 646, 651 (7th Cir. 1997).) In other words, the defendant must either know that his published statement was probably false or, suspecting that it may be false, deliberately close his eyes to the possibility.

    This is the criminal sense of recklessness, Farmer v. Brennan, supra, 511 U.S. at 839-40; Hill v. Shobe, 93 F.3d 418, 421 (7th Cir. 1996); Hemmings v. Gorczyk, 134 F.3d 104, 108 (2d Cir. 1998) (per curiam), or, if a little broader, is so only by a hair, West v. Waymire, supra, 114 F.3d at 650-52, whereas in tort cases the term sometimes denotes little more than gross negligence. Farmer v. Brennan, supra, 511 U.S. at 836 n. 4; Duckworth v. Franzen, 780 F.2d 645, 652 (7th Cir. 1985); In re New York City Asbestos Litigation, 678 N.E.2d 467 (N.Y. 1997) (per curiam); W. Page Keeton et al., Prosser and Keeton on the Law of Torts sec. 34, p. 213-14 (5th ed. 1984). Negligence, the standard in defamation suits brought by private rather than public figures, does not require proof of a state of mind at all, but only that the defendant failed to exercise the care that a reasonable person in his position would have exercised. The contrast with recklessness in the strong sense in which the term is used to denote the standard in constitutional, mail-fraud, and public-figure defamation cases is stark. “Reckless conduct [in a public-figure defamation case] is not measured by whether a reasonably prudent man would have published, or would have investigated before publishing. There must be sufficient evidence to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his publication. Publishing with such doubts shows reckless disregard for truth or falsity and demonstrates actual malice.” St. Amant v. Thompson, supra, 390 U.S. at 731.

  20. As the Supremes noted, it was generally understood that prior knowledge of the patent was not required.

    The Supremes noted the opposite.

  21. 6, do you think Congress in 1952 intended to codify the law of contributory infringement or to change it? As the Supremes noted, it was generally understood that prior knowledge of the patent was not required.

    So, you sell me an infringing product. I am sued by the patentee. I cross claim against you for indemnity. Can you legitimately defend on the basis that you did not know of the patent?

  22. Add some “willful blindness” to that you you’ve brewed yourself a cup of Supreme tea.

  23. Malcolm, joint infringement and contributory infringement used to be the same thing. See, e.g.,
    Walker on Patents, Sections 405-8.

    link to books.google.com

    When two parties cooperate to infringe a patent, I see you to suggest that one can neatly avoid the holding in this case by not labelling it contributory infringement, but instead by labelling it something else entirely, and by calling whatever it is now labelled a form of direct infringement.

    Joint direct infringement seems appropos.

    Cute.

  24. I have not yet read the Decision but, from it, ‘m reading this:

    “Willful blindness exists when two requirements are met. First, “the defendant must subjectively believe that there is a high probabilty that a fact exists.” Slip Op. at 13. Second, “the defendant must take deliberate actions to avoid learning of that fact.” Id.”

    and I’m thinking that’s straightforward enough, and that it occurs all the time. How about these two examples concerning real people that we all know.

    First, there was Admiral Nelson, deliberately putting the telescope to the socket containing his glass eye, and declaring that he could not see any signal sending him his orders. He was surely willfully blind at that moment.

    Then we have in the newspapers today Mr Mladic, commander of the Serb force that notoriously murdered 8000 Bosnian Muslims in Srebrenica. He says he gave orders not to kill anybody and then went away. So, he says, he didn’t know anything about the massacre which then occurred and has no responsibility for what then happened. Presumably the International Criminal Court in The Hague will tell us in due course whether he was culpable (or willfully blind).

  25. Ned, you are confusing joint infringement with contributory infringement.

    35 U.S.C. § 271(c): Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or an apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringment of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.

    One way to help keep it straight: think “conSHRIMPutory infringement.”

  26. As witnessed by your very post – which is every bit that thin slice of baloney.

  27. Except Jove, the turn of phrase, the jest in the word play is lost on you.

    You need to develop a sense of humor.

  28. Except Cy,

    There is no such requirement of particularized “avoid hearing something negative about a patent that you already know about.”

    Also, my comment was more than merely “systematic indifference,” it was active insistence of avoidance, at the same time availing of the benefits of that same system being avoided. What could be more blinded? What could be more willfully so?

  29. Non Seq., FYI, there are two cases en banc on this issue. One of them deals with contributory infringement with two or more actors cooperating by performing steps of a process sequentially on the same article and in cooperation.

  30. yes. according to J. Kennedy ‘unconscious copying’, (an infringement of copyright) would be impossible.

    unconscious = blindness
    copying = willful

    Being willful already implies the use of knowledge. Being blind does NOT mean ‘I dont know’, it could mean ‘i dont care’.

    Is J.Kennedy an anti-patent or Pro-IP theft judge?

  31. I like this decision very much.

    But then again, I’m excellent at very thinly slicing baloney.

  32. Ned How can one be guilty of contributory/inducement of infringement by performing one step of a process in concert with another, unless there is direct infringement that the contributory infringer “knows” is an infringement?

    Scale back on the coffee, Ned. ;)

  33. I don’t understand your divided infringement argument as this has nothing to do with inducement or contributory infringement. Either a party is liable for the performance of steps or its isn’t. If a party is liable for actions that infringe, then it is a direct infringer. Whether liability attaches won’t be statutory so it won’t be limited by this decision.

  34. They should have overruled Aro Manufacturing as being plainly inconsistent with pre-1952 law, as they noted. Aro, as noted, deeply divided the Supreme Court and it appeared here the Supremes would have entertained overturning Aro had they been asked directly. Not asked, they chose to follow it.

    Aro commanded the result here.

    This holding severely complicates the divided infringement analysis now under way by the Feds in two en banc cases. How can one be guilty of contributory/inducement of infringement by performing one step of a process in concert with another, unless there is direct infringement that the contributory infringer “knows” is an infringement?

    Aro was wrongly decided; and its fetid apparition now haunts us.

  35. I think it will depend on the facts, but the “general” behavior you are describing sounds more reckless (at least with with respect to the avoidance of knowledge of a particular patent being infringed) than willfully blind.

  36. So you are saying that if Congress actually wanted to have only “actual” knowledge, they would have drafted the language to actually include the word “actual” in front of knowledge? By Jove, you have just proved the case. Alas, for your opponent.

    Except that’s not what 6 actually said. He said that Congress should (now) add “actual,” not that they should have.

  37. “… can those same companies now actively continue to insist that their own employees (and counsel) avert their gaze from competitors’ use of that system in order to avoid treble damages…?”

    Absolutely. Systematic indifference to what your competitors are patenting is quite clearly different than willfully going out of your way to avoid hearing something negative about a patent that you already know about.

  38. IMO the congress should just add “actual” in front of knowledge.

    Interesting, 6. So you are saying that if Congress actually wanted to have only “actual” knowledge, they would have drafted the language to actually include the word “actual” in front of knowledge?

    By Jove, you have just proved the case. Alas, for your opponent.

  39. Well they were pretty upset and all. I mean on the whole, they were pretty poed at oral arguments. Kennedy is apparently the only one who wasn’t poed or was able to see through his barely contained rage. And frankly I think ol’ Kennedy got it right. blindness is not knowledge. IMO the congress should just add “actual” in front of knowledge.

  40. Do I understand John Roethel aright, that the concept of getting clearly and convincingly onto one side of the tipping point, ie the preponderance, rather than the other, but at the same time still entertaining substantial doubts, is an oxymoron. I think I think the opposite.

    Is there not a sliding scale: the more plausible each of the two outcomes is, the more evidence is needed, simply to get beyond the tipping point between the two.

    At least that is my understanding of how the English courts look at the Presumption of Patent Validity and the preponderance of evidence standard.

  41. This decision is interesting if only for its layers of subtlety.

    The dividing line between willfull blindness and deliberate indifference will be critical.

    Hmmmmm…
    willful – deliberate
    blindness – indifference

    So if major companies know that the patent system is meant to showcase the state of the art and those same companies use the patent system to protect their state of the art advances, can those same companies now actively continue to insist that their own employees (and counsel) avert their gaze from competitors’ use of that system in order to avoid treble damages…? A poster child for willful blindness meets the very avaidance of what the patent system was meant for (dissemination of knowledge).

  42. There’s a lot to be said for the dissent’s argument that the Court has made up a new standard of liability out of thin air. Perhaps this augurs the coming “beyond a reasonable clear and convincing showing of the preponderance” standard for patent invalidity.

  43. J. Kennedy said “Willful blindness is not knowledge.” Other Justices said willful blindness = knowledge?

    In my humble opinion, others may say that we can infer alleged infringer’s knowledge from her action, willful blindness.

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