Two years have passed since the deliberate indifference standard for inducement of patent infringement was replaced by the criminal law concept of willful blindness. This change yielded harsh criticism from some and left many expecting a patent owner’s task of proving inducement to be considerably more difficult going forward. However, a review of decisions to date that have addressed this new standard reveals that those concerns may not be justified, with a number of courts readily accepting evidence of willful blindness as an alternative of direct knowledge of infringing acts. Further, even as courts learn to apply this standard to patent cases, an extensive body of criminal jurisprudence can provide guidance while the new contours of induced infringement are still developed. Questions as to whether liability for inducement of infringement might exist should be carefully evaluated by considering willful blindness in both contexts.
Global-Tech and the ’willful blindness’ doctrine
In May 2011, the US Supreme Court significantly revised the law of induced infringement in the Global-Tech decision. Focusing on the requirement on that the infringer have knowledge that the induced acts constitute infringement, the Supreme Court found the prior “deliberate indifference” standard, as an alternative to showing actual knowledge, to be inadequate. In its place, the Court imported the doctrine of “willful blindness” from criminal jurisprudence. To satisfy this standard, a patentee must prove both that the infringer subjectively believed a high probability exists that infringement occurred and that the infringer took deliberate actions to avoid learning of the fact of infringement.1 In his dissent, Justice Kennedy characterised the decision of the Global-Tech majority to interject the concept of willful blindness as a “mistaken step,” arguing instead that the knowledge requirement alone was adequate and that knowledge could be inferred in cases where direct evidence of actual knowledge was lacking.2
Boundaries of the new willful blindness standard
Following Global-Tech, where can one expect the line to be drawn between innocent activity and infringing activity in the context of an induced infringement claim? The Supreme Court’s decision in Global-Tech indicates an expectation that willful blindness in patent infringement cases should have a “limited scope” exceeding recklessness or negligence, such that deliberate actions are taken to avoid confirming a high probability of wrongdoing and the defendant can almost be said to have “actually known the critical facts.” Applying this understanding, evidence that the infringer copied an “overseas” version of the patentee’s product, which was not marked with the asserted patent number, and the infringer’s failure to advise the attorney preparing a right-to-use opinion that the product being evaluated was a “knockoff” of the patentee’s product was deemed sufficient to conclude the defendant willfully blinded itself to infringing activity.
Although the Federal Circuit to date has had limited opportunity to clarify the contours of the new inducement standard, one recent opinion suggests it views the impact of the willful blindness standard to be less dramatic than some have suggested. In that opinion, the Supreme Court’s revision to the law of inducement to require evidence of willful blindness in the absence of direct knowledge was described as stating the standard “somewhat differently” from the prior deliberate indifference standard. In applying this new standard to a case where the infringer argued lack of knowledge of infringement, the Federal Circuit concluded that evidence of the infringer’s prior knowledge of the asserted patent, drafting instructions for use of the accused product that paralleled the claimed method steps, and the infringer’s failure to compare his product to the claims of the patent would have satisfied either the willful blindness or the prior deliberate indifference standard.3
In the absence of further guidance from the Federal Circuit, are any trends emerging in how district courts are applying the new willful blindness standard? A review of district court opinions that have considered questions of inducement following Global-Tech reveals varying approaches. Perhaps surprisingly given the perception that proving inducement would become more difficult following Global-Tech, a number of district court rulings suggest a willingness to use the willful blindness standard as an alternative to actual knowledge when supported by ‘reasonable’ inferences of fact. For instance, a jury’s finding of induced infringement was upheld in an Eastern District of Texas decision based on evidence that established a high probability the infringer believed the technology at issue to be patented in addition to a pattern of behavior by the infringer’s employees to avoid learning of the infringing acts.4
In another decision, a court concluded that evidence of an infringers’ knowledge of the patent, marking of the patentee’s products, and the failure of the infringers to perform an adequate investigation of potential infringement demonstrated that the defendants were, at a minimum, willfully blind to acts of inducement. An important fact for the court was the unreasonable reliance on an alleged opinion by a co-defendant and facts the court found to show a “fear” of infringement, which were considered sufficient to transform potentially negligent activity into intent sufficient to establish liability for inducement.5 Another court concluded that an infringer’s knowledge that the patentee was a competitor and evidence showing the infringer’s awareness of the patents being previously asserted against others was sufficient to establish inducement under the willful blindness standard.6
Decisions in which the evidence is found insufficient for willful blindness have primarily relied on finding a distinction between behavior that is considered merely reckless or negligent, as opposed to willfully blind
to infringing acts. For instance, evidence that the accused infringer was a large company having thousands of patents, that the company possessed a large IP department and ample resources to monitor patents, and the company’s admission that it did not routinely collect or monitor the patents of its competitors was found to constitute at most negligent or reckless behavior, but insufficient to establish inducement.7 Another decision relied on distinctions between the design of an allegedly infringing product and the design of the asserted patent as evidence that an accused infringer was not willfully blind, despite having knowledge of the patent.8
Seeking parallels from criminal jurisprudence
Although district court decisions are starting to provide a greater understanding as to the type of actions that might give rise to liability for induced infringement under the willful blindness standard, many questions remain to be answered. However, a well-developed body of authority considering willful blindness in the context of criminal law is available that practitioners now need to be mindful of when addressing induced infringement.
The case of US v Yi is one example of a criminal case presenting useful parallels to patent infringement claims. In Yi, the defendant was found liable of a Clean Air Act violation under a willful blindness standard. Pointing to his significant experience in real estate management, the court found a high probability he was aware of the presence of asbestos in a building under his control. A pattern of avoidance was also found based on the defendant’s failure to investigate documentary evidence that would have indicated whether asbestos was present.9
The level of sophistication of the accused and the extent of its knowledge of potentially unlawful acts will also be at issue in the context an induced infringement claim, as will be the actions undertaken after this
knowledge was obtained to either investigate or avoid learning whether unlawful activity has occurred. In order to (or disprove) a claim of induced infringement, cases that provide useful factual parallels to both prongs of the willful blindness inquiry should be consulted and relied upon when formulating the legal basis of the infringement claim.
Another area where criminal willful blindness jurisprudence can provide guidance concerns whether the accused holds a good faith belief that a legal obligation is not violated. One such example is the case of United States v Anthony, where a defendant was found to have willfully blinded himself to a tax payment requirement despite his stated belief that he was not responsible for taxes on the income at issue. The
defendant’s belief was considered not to be held in “good faith” because it was based on outdated legal authority and tax regulations.10
A good faith defense is also likely to arise in the context of an induced infringement claim, where an accused infringer will claims to believe in good faith that its actions were not infringing in order to negatethe intent requirement of inducement. However, as numerous courts examining the merits of such a claim in criminal cases demonstrate, there are limits on what beliefs will be found reasonable by an accused infringer. For instance, as Anthony indicates, that belief should not be based on an
intentionally uninformed legal understanding.
These two broad examples of willful blindness issues from criminal jurisprudence are but a starting point for analyzing a question of induced patent infringement. However, they serve to demonstrate that many of the uncertainties that still exist under the new inducement standard can be lessened by resort to factually analogous scenarios from criminal law.
Implications going forward
Although the question of whether the Supreme Court was justified in importing criminal law willful blindness into civil claims for induced patent infringement is the topic of another debate, the Global-Tech decision does not appear to be fairly subject to criticism as “a mistake” based on how lower-courts are applying this new standard in practice. It is clear, though, that the precise contours of what will constitute willful blindness in the context of inducement are still evolving.
Based on decisions to date, however, a number of practical observations can be made for those evaluating and bringing an induced infringement claim. First, willful blindness has been successfully established in a number of cases when presented as an alternative to direct knowledge of inducing infringement. Even where a court may not be inclined to infer knowledge of infringement, it will consider imposing liability under a potentially lesser showing by finding the defendant was, “at a minimum,” willfully blind. Thus, it is important to develop positions based on both theories of knowledge and willful blindness.
Second, the resolution of willful blindness is likely to turn on whether the evidence shows merely negligent or reckless behavior, or whether the evidence shows a willfully blind infringer. Here, the presence or lack of an opinion of counsel is likely to be significant, with an opinion found to be unreasonable or incompetent potentially having the unintended effect of assisting the patentee’s claim of inducement. Likewise, the lack of an opinion of counsel continues to be cited as evidence supporting an
inference of intent to infringe.
Third, a well-established case of copying can be persuasive evidence for establishing willful blindness even in the face of a denial of knowledge of the patent, as seen in the Global-Tech decision itself and subsequent lower-court rulings. Conversely, an accused infringer would be well served to seek to emphasise differences in the design and development of the accused product, as this evidence has been found to negate a willful blindness finding.
Finally, although the growing number of district court decisions are beginning to increase the predictability of willful blindness in the patent infringement context, parties would be well-served to incorporate meaningful parallels to willful blindness determinations in criminal jurisprudence that align with the facts of their case. The criminal case law can be a valuable resource when presenting the legal basis of a willful blindness contention.
1. Global-Tech Appliances v SEB SA, 131 S.Ct. 2060, 2070-71 (2011).
2. Id. at 2072-73.
3. Smith & Nephew v Arthrex, 2013 WL 163823, *4-5 (Fed. Cir. Jan. 16, 2013).