Without fully defining the territorial limits of infringement, no fundamental error occurred in finding products shipped to the United States and intended for the United States market as infringing. Further, a claim for inducement is viable even where the patentee has not produced direct evidence that the accused infringer actually knew of the existence of the patent-in-suit.
SEB, S.A. v. Montgomery Ward & Co., Inc., Nos. 2009-1099, -1108, -1119 (Fed. Cir. Feb. 5, 2010).
The patentee sued for direct and indirect infringement of a patent claiming a deep fryer with an inexpensive plastic outer shell, or skirt. A jury found for the patentee. The alleged infringer and the patentee both appealed numerous pre-trial and post-trial issues. Finding no error, the Federal Circuit affirmed.
The alleged infringer appealed the jury´s instructions regarding direct infringement under Section 271(a) contending that an “offer to sell” outside the United States does not infringe and that it was error to consider where the infringing products were shipped to and from. Because the alleged infringer did not object to the instruction, the court reviewed the instruction for fundamental error, which is an error that affects the integrity of the trial. Although the full territorial scope of the “offer to sell” has not been defined, the court held that the instruction´s failure to expressly include this limitation was not a fundamental error. The alleged infringer´s only evidence that the sales occurred outside the United States was that the infringing products were shipped free on board Hong Kong or mainland China. In contrast, there was significant evidence that the alleged infringer intended that the infringing products be sold in the United States, including the affixing of American trademarks, the use of North American electrical fittings, and the identification of delivery to the United States.
With regard to inducement to infringe, the patentee must show that the alleged inducer had the necessary intent to support a finding of induced infringement. The intent requirement includes the requirement that the alleged inducer knew of the patent. In this case, the alleged inducer appealed the denial of its motion for judgment as a matter of law on whether it had actual knowledge of the patent. Although not deciding the appropriate standard, the court explained that deliberate indifference is a form of actual knowledge.
In this case, there was sufficient evidence that the inducer was deliberately indifferent to the existence of the patent. In particular, the inducer purchased the patentee´s product and copied all but the cosmetic features. Further, the inducer had counsel perform a right to use analysis without informing counsel that the accused product had been copied from the patentee´s product. Failing to inform counsel of the copying in most circumstances is “highly suggestive of deliberate indifference.” Finally, the inducer´s president was knowledgeable about the United States patent system and patent rights.
A copy of the opinion can be found here.