Inducing Infringement: Inferring Knowledge And Intent From A Finding Of Deliberate Indifference

Historically, the Federal Circuit has opined that inducement of patent infringement requires (1) direct infringement by a third party, (2) actual or constructive knowledge by the inducer of the patent infringed, and (3) the intent to induce infringement of that patent. A little over three years ago, the Federal Circuit handed down an opinion that made it more difficult for the patent holder to prove inducement of infringement under § 271(b) of the Patent Act by imposing a specific intent requirement. Just recently, however, the Court in SEB S.A. v. Montgomery Ward & Co.1 eased the quantum of proof required to establish inducement. It held that evidence of a deliberate indifference to the patent-in-suit may be sufficient to satisfy both the knowledge and intent requirements for proof of inducement.2

The Law Prior to Late 2006

Inducement is a common claim in patent infringement cases. It often arises where the putative inducer sells an article to its customers, who then practice a method covered by the patent-in-suit. Rather than proceeding against a large number of defendants, it may be more efficient to proceed directly against the putative inducer under an inducement theory. Similarly, the need for an inducement claim may arise where the putative inducer makes extra-territorial sales of a covered article to its customers, who then sell the article in the U.S.

The Patent Act provides that "[w]hoever actively induces infringement of a patent shall be liable as an infringer."3 Prior to late 2006, the Federal Circuit consistently held that inducement requires (1) direct infringement by a third party, (2) actual or constructive knowledge by the inducer of the patent infringed, and (3) the intent to induce infringement of that patent.4 The Court, however, was imprecise concerning the requisite intent. It didn't specify whether it was just an intent to cause the acts that later were found to infringe, or whether it was an intent to cause those acts, believing that performance of those acts would constitute direct infringement.5 The Court also did not elaborate on precisely what it meant by "actual knowledge" of the patent infringed.

The DSU Medical Decision of Late 2006

DSU Med. Corp. v. JMS Co.6 was the Federal Circuit's attempt to clarify the nature of the intent required to prove inducement. In a later Federal Circuit decision, the Court said the following: "In DSU Medical . . . this court addressed the intent necessary to support a finding of inducing infringement. . . . [T]he plaintiff must show that the alleged infringer knew or should have known that his actions would induce actual infringements."7 It held that the intent requirement for inducement includes not just an intent to cause the acts that are later found to constitute direct infringement, but also a specific intent to cause direct infringement by the performance of those acts.8 In other words, the inducer either must have actually believed, or had reason to believe, that the actions he caused would result in infringement.

The DSU Medical decision did not, however, address the knowledge-of-the-patent requirement for inducement. With respect to this element of inducement, the Court commented in dictum that "[t]he requirement that the alleged infringer knew or should have known his actions would induce actual infringement necessarily includes the requirement...