U.S. SUPREME COURT, DECISION OF 31 MAY 2011, GLOBALTECH APPLIANCES, INC. V. SEB S.A.

The U.S. Supreme Court found that a defendant’s “deliberate indifference” to a potential patent did not satisfy the “knowledge” required to prove active inducement of patent infringement. The court did find, however, that its higher standard of “willful blindness” could be used to satisfy this requirement.

Active inducement is a theory of indirect patent infringement. To establish active inducement, a plaintiff must generally show that:

(1) a direct infringement occurred,

(2) the defendant's actions induced this direct infringement, and

(3) the defendant had a specific intent to induce infringement.

In the lower court decision, the Federal Circuit addressed the scope of knowledge required for a defendant to have a specific intent to induce infringement. The Federal Circuit found that a direct showing of a defendant's actual knowledge of the patent was not necessary. Instead, the knowledge requirement could be satisfied by a subjective test — a showing of the defendant's "deliberate indifference of a known risk" that the plaintiff had a protective patent.

On appeal, the U.S. Supreme Court rejected the Federal Circuit’s approach, ruling that "deliberate indifference" does not satisfy the knowledge requirement under 35 U.S.C. §271(b) for induced infringement. The court criticized the Federal Circuit’s test as allowing a finding of "knowledge" when there is merely a "known risk." The court also criticized this test as demanding only "deliberate indifference" to this risk, instead of "active efforts by an inducer to avoid knowing about the infringing nature of the activities."

While the court thus eschewed the Federal Circuit's test, it did rule that the knowledge requirement in § 271(b) could instead be satisfied by a higher standard – willful blindness. The court found that "willful blindness" includes two basic requirements:

(1) the defendant must subjectively believe that there is a high probability that a fact exists, and

(2) the defendant must take deliberate actions to avoid learning that fact.

Looking forward, the court's ruling arguably further heightens the showing that a plaintiff must make for a defendant to be liable for active inducement of infringement under § 271(b). In the absence of actual knowledge, a plaintiff may attempt to establish a defendant's subjective belief that there is a high probability that the relevant product is patented, and then show deliberate actions that the defendant took to avoid learning this fact. Correspondingly, opinions of counsel, such as prior art searches and noninfringement opinions, will likely continue to play an important role in potentially avoiding liability under § 271(b). Companies obtaining such opinions should be sure to first inform their patent attorneys conducting such an analysis of any third-party products or services that may have served as an inspiration for the company's new product or service. Companies should also consider informing their attorneys of other key facts they have knowledge of that may facilitate the search and analysis, such as known close products or services they have reviewed.

The fact that the Supreme Court has arguably heightened the standard for proving knowledge for indirect infringement under § 271(b) is further notable because the Federal Circuit has recently limited direct infringement in other contexts, potentially forcing plaintiffs to rely on such an indirect infringement theory in certain instances. For example, the Federal Circuit recently found that, for systems claims where the end user's acts satisfy certain claim limitations and a company's acts satisfy others, the company cannot be liable for direct infringement unless it puts the system as a whole into service (i.e., controls the system and obtains a benefit from it). In many instances, however, the end user will put the system into service (i.e., "use" the system), and thus plaintiffs may be forced to rely on a theory of indirect infringement such as active inducement.