SEB (T-Fal) v. Montgomery Ward & Co. (Fed. Cir. 2010)
Part of the SEB decision revolved around the question of induced infringement. Under 35 U.S.C. 271(b) "[w]hoever actively induces infringement of a patent shall be liable as an infringer." The defendant argued that it could not have induced infringement because it had no actual knowledge of the patent. That argument is supported by the Federal Circuit's 2006 holding in DSU Medical v. JMS that the "requirement that the alleged infringer knew or should have known his actions would induce actual infringement necessarily includes the requirement that he or she knew of the patent."
In this case, the Federal Circuit further fleshed-out that requirement of knowledge after first suggesting that the quoted DSU Medical statement was dicta. "The facts of DSU Medical did not require this court to address the scope of the knowledge requirement for intent." Despite the "knowledge" language of DSU Medical, the SEB court here held that "deliberate indifference" to potential patent rights is be sufficient to satisfy the knowledge requirement of inducement charges. Thus, "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."
To be clear, the court made a distinction between "deliberate indifference" and a "should-have-known" standard.
At the outset, this court notes that the Supreme Court has indicated, in a different civil context, that “deliberate indifference” is not necessarily a “should have known” standard. Farmer v. Brennan, 511 U.S. 825, 840 (1994). The latter implies a solely objective test, whereas the former may require a subjective determination that the defendant knew of and disregarded the overt risk that an element of the offense existed. . . . For example, an accused infringer may defeat a showing of subjective deliberate indifference to the existence of a patent where it shows that it was genuinely “unaware even of an obvious risk.” More importantly, and as courts have observed in a variety of settings, the standard of deliberate indifference of a known risk is not different from actual knowledge, but is a form of actual knowledge. See, e.g., United States v. Carani, 492 F.3d 867 (7th Cir. 2007) (“Deliberate avoidance is not a standard less than knowledge; it is simply another way that knowledge may be proved.”).
Here, the Federal Circuit agreed with the district court that there was "adequate evidence to support a conclusion that [the Defendant] deliberately disregarded a known risk that SEB had a protective patent." In particular, the Federal Circuit noted (1) that the defendant had copied SEB's product; and (2) that the defendant hired a patent attorney to conduct a right-to-use study but did not tell the patent attorney that it had copied the SEB product; and (3) that the defendant's president was well versed in US patent law. Taking these facts together, the court found "considerable evidence of deliberate indifference."
A failure to inform one’s counsel of copying would be highly suggestive of deliberate indifference in most circumstances.
Jury Verdict of Inducement Affirmed