On December 13, 2006, the Federal Circuit issued its en banc decision in DSU Medical Corp. v. JMS Co., Lmtd. resolving a perceived conflict in Federal Circuit case law regarding the mens rea required to find a defendant guilty of inducing patent infringement under 35 U.S.C. § 271(b). In DSU Medical, the Federal Circuit found that inducement requires "more than just intent to cause the acts that produce direct infringement. . . . . [I]nducement requires evidence of culpable conduct, directed to encouraging another’s infringement, not merely that the inducer had knowledge of the direct infringer’s activities."
35 U.S.C. § 271(b) states that any party who "actively induces infringement of a patent shall be liable as an infringer." Prior to the holding in DSU Medical, the Federal Circuit had posited two different standards for determining what acts constituted "active inducement." In Hewlett Packard Co. v. Bausch & Lomb, Inc. (909 F.2d 1464 (Fed. Cir. 1990)), the court indicated that merely intending to cause the acts which constitute infringement was sufficient, regardless of whether the defendant subjectively believed that the acts would infringe a patent claim. In contrast, the Federal Circuit held in Manville Sales that “[t]he plaintiff has the burden of showing that the alleged infringer’s actions induced infringing acts andthat he knew or should have known his actions would induce actual infringements.” Manville Sales Corp. v. Paramount Systems, Inc.
At issue in DSU Medical was a jury instruction that utilized the Manville Sales standard: "The plaintiff has the burden of showing that the alleged infringer’s actions induced infringing acts and that he knew or should have known his actions would induce actual infringements."
The en banc panel in DSU Medical upheld the district court's jury instruction, rejecting the less specific standard for intent postulated in Hewlett Packardin favor of the Manville Sales standard. Additionally, the panel then found a basis for the jury's verdict of non-infringement under 271(b) by pointing to the fact that the defendant had obtained opinions of non-infringement from its legal counsel: "[T]he record contains evidence that ITL did not believe its Platypus infringed. Therefore, it had no intent to infringe. Accordingly, the record supports the jury’s verdict based on the evidence showing a lack of the necessary specific intent" (emphasis added).
DSU Medical has important implications for patentees, defendents and would-be defendants accused of inducing infringement. For patentees, the burden of proving induced infringement is substantially increased. Patentees may want to take affirmative steps - such as sending copies of issued patents to potential inducers of infringement - to ensure that potential infringers are aware of the patents. Patentees should keep records of such notifications as future evidence that a defendant should have known of the infringement.
Potential infringers, on the other hand, could shield themselves from charges of inducing infringement by obtaining a well-reasoned opinion of counsel that explains why the induced acts are not infringing. Although not expressly held by the panel in DSU Medical, the reasoning of the case strongly suggests that a defendant's reasonable belief in the invalidity of a patent would also shield against a finding of induced infringement, even if there was no dispute that the induced acts fell within the literal scope of the claim.
Although not explored by the panel in DSU Medical, the decision suggests that a defendant in possession of a reasonable opinion of invalidity or non-infringement would likely be immune from any damages under 271(b) accrued before a district court (or possibly a higher court) affirmatively found the patent valid and infringed.