Induced Patent Infringement Standard: How To Avoid Proving Intent And Fast Forward To Actual Knowledge

Q:"How do you want your induced patent infringement?"
A:"Willful blind, not deepfried"

Spicy vegetarian deep-fried noodle nest
Source: Veggy Monkey Eats

The U.S. Supreme Court decided Global-Tech versus SEB May 31, 2011. It gives a standard for induced patent infringement: namely willful blindness, that goes beyond recklessness and negligence.

The facts are interesting too for IP Dragon:
"Pentalpha is a Hong Kong maker of home appliances and a wholly owned subsidiary of petitioner Global-Tech Ap­pliances, Inc. In order to develop a deep fryer for Sunbeam, Pentalpha purchased an SEB fryer in Hong Kong and copied all but its cosmetic features. Because the SEB fryer bought in Hong Kong was made for sale in a foreign market, it bore no U.S. patent markings. After copying SEB’s design, Pentalpha retained an attorney to conduct a right-to-use study, but Pentalpha refrained from telling the attorney that its design was copied directly from SEB’s."

So what can be learned from these bare facts? A way for patent holders to avoid this problem of proving intent and fast forward proving actual knowledge is to use the patent numbers of the patents you own in different jurisdictions on your products. Maybe a sticker is suboptimal, because removable. Engraved in or stamped on the metal or plastic could do the trick.

Now back to the case. It was about which intent test to use in case of 35 U.S.C. §271(b): "Whoever actively induces infringement of a patent shall be liable as an infringer."

The Federal Circuit had used the deliberate indifference test.
The Supreme Court opines that the deliberate indifference test makes it possible that knowledge is found where there is just a known risk that the induced acts are infringing. Instead the Supreme Court (8 minus 1) think that some active effort by the inducer is needed to avoid knowing about the infringing nature of the activities.

In this humble author's opinion the wording "actively induces" does not correspond to "deliberate indifference", which seems a mental state. So in this respect he agrees with the outcome of the Supreme Court's decision.

What is the willful blindness test exactly:
(1) the defendant must subjectively believe that there is a high probability that a fact exists;
(2) the defendant must take deliberate actions to avoid learning of that fact.

There seems to be a continuum from no knowledge to recklessness/negligence to deliberate indifference to willful blindness to actual knowledge.

Read the Supreme Court decision here.

Eileen McDermott, whose coverage of the court deliberations is excellent, is quoting Global-Tech's counsel William Dunnegan who was proposing to use a "purposeful, culpability test". This was followed by John Roberts C.J. question of how to apply such a standard across different industries. McDermott points out that in some amici briefs it became clear that for example the semiconductor industry has 420,000 patents. McDermott quoted the reaction of John Roberts C.J. after Dunnegan said that there might be different standards per industry: "Well we're not going to adopt a special rule for the deep-fryer industry." Read McDermott's court report for Managing IP here.