Global-Tech Appliances, Inc. v. SEB S.A.
179 L. Ed. 2d 1167, 131 S. Ct. 2060 (2011)
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Rule of Law:
Liability for inducing patent infringement under 35 U.S.C. § 271(b) requires knowledge that the induced acts constitute infringement. This knowledge requirement can be satisfied by a showing of willful blindness, where a defendant subjectively believes there is a high probability that a patent exists and takes deliberate actions to avoid learning of that fact.
Facts:
- SEB S.A., a French company, invented and obtained a U.S. patent for a 'cool-touch' deep fryer, which it sold successfully in the United States under its T-Fal brand.
- In 1997, competitor Sunbeam Products, Inc. hired Pentalpha Enterprises, Ltd., a Hong Kong appliance maker, to supply it with deep fryers.
- To develop a product for Sunbeam, Pentalpha purchased an SEB fryer in Hong Kong, which lacked U.S. patent markings because it was made for a foreign market.
- Pentalpha copied all but the cosmetic features of the SEB fryer to create its own product for sale in the U.S.
- Pentalpha then retained an attorney to conduct a right-to-use study but deliberately refrained from telling the attorney that its design was a direct copy of SEB's product.
- The attorney failed to locate SEB's patent and issued an opinion letter stating Pentalpha's design was non-infringing.
- Pentalpha began selling its copied fryers to Sunbeam, which resold them in the United States, undercutting SEB's market share.
- Pentalpha later sold the same fryers to Fingerhut Corp. and Montgomery Ward & Co. for resale in the U.S.
Procedural Posture:
- SEB S.A. sued Pentalpha in U.S. District Court, alleging direct and induced patent infringement.
- A jury returned a verdict for SEB on both claims and found that Pentalpha's infringement was willful.
- Pentalpha filed post-trial motions for judgment as a matter of law or a new trial, which the District Court denied.
- Pentalpha, as appellant, appealed the decision to the U.S. Court of Appeals for the Federal Circuit.
- The Federal Circuit affirmed, holding that Pentalpha's 'deliberately disregarded a known risk' that a patent existed constituted a form of actual knowledge.
- The U.S. Supreme Court granted certiorari to review the case.
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Issue:
Does liability for actively inducing patent infringement under 35 U.S.C. § 271(b) require knowledge that the induced acts constitute patent infringement?
Opinions:
Majority - Justice Alito
Yes, induced infringement under § 271(b) requires knowledge that the induced acts constitute patent infringement. The Court determined that because § 271(b) (induced infringement) and § 271(c) (contributory infringement) derive from the same common law origins, they should have the same knowledge requirement. Citing the precedent of Aro Mfg. Co. v. Convertible Top Replacement Co. (Aro II), which held that § 271(c) liability requires knowledge of the patent, the Court concluded the same standard must apply to § 271(b). However, the Court further held that this knowledge element can be satisfied by the doctrine of willful blindness from criminal law. Willful blindness exists where a defendant (1) subjectively believes there is a high probability that a fact (like the existence of a patent) exists, and (2) takes deliberate actions to avoid learning of that fact. The evidence that Pentalpha copied a successful product and concealed the copying from its patent attorney was sufficient for a jury to find willful blindness.
Dissenting - Justice Kennedy
Yes, knowledge is required, but the Court errs by holding that willful blindness can substitute for actual knowledge. The dissent argues that willful blindness and knowledge are legally distinct mental states, and courts should not broaden a statute's scope by equating them. While facts supporting willful blindness may be used as circumstantial evidence to prove actual knowledge, it is a mistake to adopt the doctrine itself, especially by importing it from criminal law into the utilitarian context of patent law without sufficient justification. The dissent contends that the majority's precedents do not support its holding and that the Court should have remanded the case for the Court of Appeals to determine if the evidence was sufficient to find actual knowledge, rather than creating a new standard.
Analysis:
This decision clarifies that the mental state for induced infringement under § 271(b) is actual knowledge, aligning it with the standard for contributory infringement. Critically, by importing the criminal law doctrine of willful blindness into patent law, the Court established that this knowledge requirement can be met even without direct proof. This prevents potential infringers from manufacturing plausible deniability by deliberately avoiding confirmation of a patent's existence, such as by instructing their attorneys not to perform a thorough search or by copying products without investigation. The ruling provides patent holders a powerful tool to prove intent, shifting the legal focus from what a defendant definitively knew to what they deliberately avoided knowing.
