“Intent” to Induce Patent Infringement, Revisited

“Whoever actively induces infringement of a patent shall be liable as an infringer.” 35 USC §271(b).

But what does it mean to “actively induce” infringement? 

Inducement requires a showing of specific intent to encourage another’s infringement. The Federal Circuit is now developing the definition of “intent” required for active inducement, one case at a time.

In a 2006 case, DSU Med. Corp. v. JMS Corp., The Federal Circuit ruled:

The plaintiff must show that the alleged infringer knew or should have known that his actions would induce actual infringements. This requirement necessarily includes the requirement that he or she knew of the patent.

In other words, it is not enough to just induce the act of direct infringement. Without knowledge of the patent itself, a person cannot induce infringement for the purposes of §271(b). 

But an important unresolved question remained after under DSU Med Corp.: must “knowledge” of the patent be “actual” knowledge, or will “constructive” knowledge suffice?

The Federal Circuit addressed this question in a recent (Feb. 2010) case, SEB v. Montgomery Ward., finding “constructive knowledge” for the purpose of inducing infringement where a person deliberately disregards a known risk that a patent exists. 

The Court ruled: ”[A] claim for inducement is viable even where the patentee has not produced direct evidence that the accused infringer actually knew of the patent-in-suit.”

In the SEB case, the record showed no direct evidence that the defendant had actual knowledge of the patent.  However, the record showed the defendant copied a new-and-improved rice cooker by having it designed and built in Hong Kong, and then imported to the United States.  The defendant also hired an attorney to conduct a right-to-use study, but did not tell him that it had based its new rice cooker on the product sold by the plaintiff. 

The Federal Circuit found this conduct a deliberate disregard of the known risk that plaintiff had a patent.

Following the rationale of other courts, the Federal Circuit explained that:

“[S]pecific intent” in the civil context is not so narrow as to allow an accused wrongdoer to actively disregard a known risk that an element of the offense exists. See Crawford-El v. Britton, 951 F.2d 1314, 1318 (D.C. Cir. 1991) (equating specific intent and deliberate indifference); Boim v. Holy Land Found. for Relief & Dev., 549 F.3d 685, 693 (7th Cir. 2008) (equating intentional misconduct with knowledge and deliberate indifference).

The Federal Circuit further explained that “a failure to inform one’s counsel of copying would be highly suggestive of deliberate indifference in most circumstances.”

The Court closed its opinion with a dictum to be addressed in the future:

Our opinion does not purport to establish the outer limits of the type of knowledge needed for inducement. For instance, a patentee may perhaps only need to show constructive knowledge with persuasive evidence of disregard for clear patent markings, similar to the constructive notice requirement in § 287(a).

Apparently, the Federal Circuit intends to further develop the “intent” requirement for inducing infringement in future cases, as proper fact patterns are presented.

Prevailing counsel in SEB SA v. T-Fal Corp. was Norman H. Zivin

The Federal Circuit panel included: Judge Randall R. Radar, Judge William C. Bryson and Judge Richard Linn.

The Southern District of New York judge in the case below was Judge Steven C. Robinson.