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Thursday, September 8, 2011

Intent Standard for Induced Patent Infringement: Global-Tech Appliances, Inc. v. SEB S.A.

Brian T. Yeh
Legislative Attorney

While § 271(a) of the Patent Act (35 U.S.C. § 271(a)) creates liability for someone who directly infringes a patent (by the unauthorized use of a patented invention), § 271(b) of the act provides indirect infringement liability for someone who “actively induces” another party to engage in infringing activities. “Inducement” is a theory of indirect patent infringement, in which a party causes, encourages, influences, or aids and abets another’s direct infringement of a patent. In Global-Tech Appliances, Inc. v. SEB S.A., the question was the legal standard for the mental state necessary for a defendant to be liable for actively inducing infringement under § 271(b). The U.S. Court of Appeals for the Federal Circuit had ruled that a plaintiff may hold a defendant liable for induced patent infringement by showing that the defendant had a “deliberate indifference of a known risk” that the induced acts may violate an existing patent.

On May 31, 2011, the Supreme Court rejected the Federal Circuit’s “deliberate indifference” standard. By a vote of 8-1, the Court ruled that induced infringement under § 271(b) requires actual knowledge that the induced acts constitute patent infringement. However, in a somewhat surprising step, the Court declared that this statutory knowledge requirement could be satisfied by proof of the accused inducer’s “willful blindness” (that is, the defendant subjectively believes there is a high probability that a patent exists and takes deliberate actions to avoid learning of that fact). This is the first time that the Supreme Court has applied “willful blindness,” a criminal law doctrine, to a civil patent infringement case. It is also the first time that the Court has held that proof of willful blindness can substitute for actual knowledge, thus establishing a standard not only for patent infringement cases brought under § 271(b), but also potentially for all federal criminal cases involving knowledge.

Date of Report: August 30, 2011
Number of Pages: 12
Order Number: R41976
Price: $29.95

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