The Supreme Court recently clarified the state of mind that an accused infringer must possess to be liable for inducing patent infringement. Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2068 (2011). A patent holder can sue one person (the accused) for inducing another person (the actor) to infringe a patent. To be liable under inducement, the accused must have intended that the infringement occurred. The exact state of mind the accused must possess has been a source of debate.
Before 2006, two lines of cases offered two different standards. The first line of cases held that the accused need only intend the underlying acts occur. The second line of cases held that the accused must also intend that the actor would infringe the patent by performing those acts. For example, imagine a patent that claims steps A, B, and C. Under the first line of cases, the accused only had to intend that the actor performed steps A, B, and C. Under the second line of cases, the accused must also know that doing so would infringe the patent. In 2006, the Federal Circuit clarified the law, choosing the second line of cases to set the standard. To be held liable, the accused must (1) know about the patent and (2) intend that the actor infringe the patent. DSU Med. Corp. v. JMS Co., Ltd., 471 F.3d 1293, 1306 (Fed. Cir. 2006) (en banc).
Subsequent cases, however, weakened this requirement by holding that actual knowledge of the patent was not required. Instead, some cases held that an accused could be liable if he was deliberately indifferent to the existence of the patent. In SEB S.A. v. Montgomery Ward & Co., Inc., 594 F.3d 1360, 1373–79 (Fed. Cir. 2010), aff’d sub nom. Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011), despite a lack of evidence that the accused had actual knowledge of the patent, the jury decided that the accused “knew or should have known” about the patent. On appeal, the Federal Circuit stated that the accused was deliberately indifferent to the existence of a patent, holding that deliberate indifference was the same as actual knowledge.
On appeal in Global-Tech, the Supreme Court abolished the deliberate indifference standard, holding that willful blindness was sufficient to hold an accused liable for inducement. While the accused had hired an attorney to perform a patent search, he had not informed the attorney that he had copied the patentee’s design for a deep fat fryer. While the Federal Circuit rejected the trial court’s reasoning, the court affirmed the inducement decision, holding that the accused’s actions met the newly established test for willful blindness: (1) The accused subjectively believed that there was a high probability that the patent existed; and (2) He took deliberate actions to avoid learning whether such a patent, in fact, actually existed. Global-Tech, 131 S. Ct. at 2063.
Under Global-Tech, patent holders will have a harder time holding accused parties liable for inducement. Accused parties rarely provide direct evidence of subjective intent that a patent exists, and any related documents are often shielded from discovery by attorney-client privilege. Proving intent using only circumstantial evidence will likely be more difficult under the new standard.