The Supreme Court Retools The Test For Induced Patent Infringement

In Global-Tech Appliances, Inc. v. SEB S.A. (S. Ct., May 31, 2011), the Supreme Court adjusted the requirements for active inducement liability for patent infringement under 35 U.S.C. § 271(b). Induced infringement requires proof of actual knowledge that a patent is infringed, including actual knowledge of the infringed patent, but such knowledge can be shown by proof of "willful blindness."

Background Facts

SEB, a French appliance manufacturer, obtained a U.S. Patent for a cool-touch deep fryer. Sunbeam Products, Inc., a U.S. competitor, commissioned Pentalpha Enterprises, Ltd., a Hong Kong appliance manufacturer and a wholly owned subsidiary of Global-Tech, to develop a deep fryer for sale in the United States. Pentalpha purchased an SEB fryer in Hong Kong and copied all but the ornamental features. Pentalpha obtained a right-to-use opinion for its fryer from outside counsel, but Pentalpha did not inform its attorney that it had copied the SEB fryer, and the attorney's patent search missed the SEB patent. SEB sued Pentalpha for direct and induced infringement, and the jury returned a verdict in favor of SEB on both theories.

Pentalpha argued in post-trial motions that there was insufficient evidence to support induced infringement under 35 U.S.C. § 271(b). The appliance purchased in Hong Kong was not marked with a U.S. patent number, and Pentalpha claimed it did not actually know of SEB's patent until it received notice of the Sunbeam lawsuit. Pentalpha's argument was rejected by the District Court and the U.S. Court of Appeals for the Federal Circuit. Although the Federal Circuit concluded § 271(b) requires proof that an infringer "knew or should have known his actions would induce actual infringement," it further concluded Pentalpha had "deliberately disregarded a known risk that SEB had a protective patent," which, it held, "is a form of actual knowledge."

Section 271(b) Requires Proof of Actual Knowledge of Patent Infringement

In reviewing Pentalpha's arguments, the Supreme Court turned initially to the language of § 271(b) itself, which states: "Whoever actively induces infringement of a patent shall be liable as an infringer." While the court acknowledged the statute fails to mention intent, it inferred that at least some intent is required. However, the statute leaves open whether one is liable under the statute for inducing another to engage in conduct which "happens to amount to infringement" or only when the inducer knows the...