The United States Supreme Court has released yet another opinion involving patent law, continuing a recent trend which has seen numerous opinions altering the patent jurisprudence landscape. In Global-Tech Appliances, Inc. v. SEB S.A. (2011), 8 out of 9 justices held that liability under 35 U.S.C. §271(b) requires a specific standard of knowledge that induced acts constitute patent infringement. The opinion changes the level of the knowledge require by the statute by invoking a criminal law doctrine for the first time in a civil case involving patents – and in doing so, perhaps signals a much wider application of the theory into other civil cases, something not usually seen coming from the Court’s forays into patents.
The case emerged from a Federal Circuit appeal involving patent litigation that asserted a theory of infringement based on actively inducing others to sell or offer to sell products in violation of the patent holder’s rights. Known as inducement of infringement, the theory is codified in §271(b), which states simply that “[w]hoever actively induces infringement of a patent shall be liable as an infringer” – language which had been construed by the Federal Circuit to require a standard of “deliberate indifference” that infringement might occur.
The Supreme Court held that inducement of infringement indeed requires knowledge on the part of the accused inducer that a third party’s conduct constitutes patent infringement. The Court noted that although §271(b) is silent as to whether knowledge is required, it imported the knowledge component from the concept of contributory patent infringement that has long been required in §271(c) – reasoning that “the two provisions have a common origin and create the same difficult interpretive choice,” particularly given that inducement of infringement was not always considered a separate theory, but instead was formerly treated as evidence of contributory infringement.
The main issue, however, was whether the Federal Circuit’s “deliberate indifference” standard should be the law. Borrowing from criminal jurisprudence, the Court then held, for the first time, that liability for patent infringement under the inducement theory of §271(b) requires “willful blindness.” In an attempt to further define what this means, the Court noted that “the defendant must subjectively believe that there is a high probability that a fact exists. Second, the defendant must take deliberate actions to avoid learning of that fact. These requirements give willful blindness an appropriately limited scope that surpasses recklessness and negligence.”
The lone dissenting voice came from Justice Kennedy, who noted that this was the first time the Court held that “willful blindness” is a substitute for actual knowledge where a statutory requirement of knowledge exists. Justice Kennedy went further, questioning whether such an extension was even appropriate at all, let alone in a civil case involve patents – and without any briefing or comment on the issue whatsoever.
The case is therefore notable for two reasons. First, it changes the level of knowledge required to prove, and be liable for, inducement of infringement. Second, and perhaps more importantly, it adopts a doctrine from criminal law to further define what the Court found to be a statutory knowledge requirement. In doing so, the opinion notes ominously that “[g]iven the doctrine’s long history and wide acceptance in the Federal Judiciary, there is no reason why the doctrine should not apply in civil lawsuits” – and although qualified by “for induced patent infringement under §271(b)” – the implication is evident that it could be imported for other civil lawsuits as well.