Knowledge Is Power: Requiring 'Knowledge Of The Patent'

Originally published in Law360, September 22, 2011

Law360, New York (September 22, 2011, 1:11 PM ET) -- The patent law, through sections 35 U.S.C. §§ 271(b) and 271(c), provides a vehicle for patentees to hold indirect patent infringers liable. Section 271(b), the focus of this article, addresses induced infringement in very simple terms: "Whoever actively induces infringement of a patent shall be liable as an infringer." Section 271(c), the contributory infringement counterpart to section 271(b), is more lengthy and includes a knowledge element by its plain terms.1

In interpreting section 271(c), the U.S. Supreme Court held long ago that a contributory infringer must know not only that a component it sold be especially adapted for acts underlying the infringement, but also that the resulting combination for which the component was made was patented.2That is, to be liable, a contributory infringer must, in the first place, know of the patent whose infringement she contributes to.

In contrast to section 271(c), section 271(b) does not include express language requiring a knowledge or intent component. Not until its recent decision in Global-Tech Appliances Inc. v. SEB SA3 had the Supreme Court weighed in on section 271(b); but the Federal Circuit and other lower courts have routinely held that section 271(b) requires some form of intent on the part of the accused inducer to be liable. Yet the boundaries of that intent requirement and how it will be applied in practice have remained unclear until recently.

Prior Federal Circuit case law seems to reach somewhat conflicting conclusions about the intent requirement; two cases decided in 1990 prescribed different tests — one much easier to meet than the other. In Hewlett-Packard Co. v. Bausch & Lomb Inc., the Federal Circuit held that induced infringement only requires intent on the part of the accused inducer to cause the acts that constitute infringement,4 whereas in Manville Sales Corp. v. Paramount Systems Inc., a different panel of the Federal Circuit held that inducer must have "specific intent to encourage another's infringement and not merely that the defendant had knowledge of the acts alleged to constitute infringement" and included the requirement that the inducer "knew or should have known that his actions would induce actual infringements."5

In 2006, an en banc Federal Circuit attempted to resolve the seeming conflict present in its jurisprudence in DSU Medical Corp. v. JMS Co.,6 and held that liability for inducement of infringement requires that "the alleged infringer knowingly induce*+ infringement and possess[] specific intent to encourage another's infringement."7 Furthermore, the Court held that intent to induce "necessarily includes the requirement that *the accused inducer+ knew of the patent."8

But, as then-Chief Judge Paul Michel recognized in his concurring opinion, DSU Medical did not provide an answer to "what satisfies the 'knowledge of the patent' requirement in cases brought under 35 U.S.C. § 271(b)."9

Actual Knowledge or Deliberate Indifference?

It was not until 2010 that the Federal Circuit had occasion to address this question, i.e., what satisfies the knowledge requirement, in SEB SA v. Montgomery...