Bose Corporation v. SDI Technologies, Inc. (Fed. Cir. 2014) (nonprecedential) 13-1347.Opinion.3-12-2014.1
Panel: Chen, Clevenger (author), Hughes
Despite being nonprecedential, this opinion is interesting because it’s the first time to my knowledge that the Federal Circuit has endorsed a “points in time” approach to an intent-based patent infringement doctrine such as inducement.
Background: Bose alleged that SDI indirectly infringes Patent No. 7,277,765, relying on both inducement and contributory infringement theories. The district court granted summary judgment of noninfringement in SDI’s favor based a failure to meet the claim limitations as construed (for 144 of the accused products) and on a lack of intent to infringe (for the remaining product).
Intent to infringe: On appeal, the Federal Circuit reversed the district court’s grant of summary judgment as to the inducement issue. (It affirmed, however, the court’s ruling of noninfringement with respect to the other 144 products on claim construction grounds).
On the issue of intent, the Federal Circuit agreed that there were periods of time during which SDI might have possessed the requisite level of intent, and thus summary judgment as to those periods was inappropriate. First, between the time when SDI learned of the patent and May 22, 2009, when it received an opinion of counsel, SDI may have possessed the requisite intent – that was an issue for the jury to decide:
Where the record reveals no basis for a good-faith belief sufficient to thwart liability, summary judgment of no liability cannot stand. Whether SDI had such a good-faith
belief prior to receiving the opinion of counsel is a triable issue for the jury to consider. Therefore the summary judgment incorrectly absolves SDI of liability from December 10, 2008 until May 22, 2009, when SDI received the opinion of counsel.
Slip Op. at 18. The CAFC did conclude that for the period after SDI received the letter, it could not be liable for inducement, particularly since Bose never challenged the competency of the counsel who drafted the letter or even entered it into evidence despite possessing a copy.
But, the CAFC declined to extend that conclusion into the future – specifically, to the period after judgment would be rendered in this case:
Bose further argues that the District Court improperly allowed the opinion of counsel to absolve SDI of potential post-verdict liability. The District Court found that the patent’s validity and the iW1 device’s infringement were both triable issues for the jury. A jury could, at trial, find the patent not invalid and infringed. In this scenario, SDI’s opinion of counsel would not shield it from postverdict liability because SDI could not credibly argue that it maintained its good-faith belief of invalidity following a verdict to the contrary. The summary judgment improperly absolved SDI of potential post-verdict liability.
Slip Op. at 18. This move is significant because it’s the first time that I’m aware of that the Federal Circuit has considered the state of mind of the accused infringer at various time periods when evaluating intent (rather than adopting some sort of “omniscient being” standpoint) or adopted a post-verdict theory that intent must follow (which both I and Tim Holbrook have argued is the right way to think about intent in inducement cases). Here, I think the court gets the reasoning exactly right.