Liability for Future Indirect Infringement

By Jason Rantanen

In an earlier post, I summarized the Federal Circuit's affirmance of a preliminary injunction prohibiting Apotex from marketing its generic version of AstraZeneca's budesonide in AstraZeneca LP v. Apotex, Inc

The majority's discussion of inducement of infringement in this case is particularly interesting because it deals with inducement of infringement in the context of future acts, as opposed to damages for past inducement – and when dealing with future infringement, it's unclear whether an intent element should apply to indirect infringement at all.

Apotex Had Specific Intent to Cause Infringement
In its opinion affirming the district court's preliminary finding of inducement, the Federal Circuit rejected Apotex's argument that it lacked specific intent to cause infringement, concluding that Apotex knew about potential infringement problems posed by its label but nevertheless decided to proceed nonetheless.  Similarly unpersuasive to the court was Apotex's argument that it lacked specific intent because the FDA required it to include the pivotal titration language.  The majority pointed out that Apotex had a variety of options besides proceeding in the face of a risk of an infringement suit, including waiting until the patents expire, challenging infringement and validity, and formally appealing the FDA's denial of Apotex's proposed labeling amendment.  Given these circumstances, the court concluded that Apotex had the necessary specific intent to cause inducement.

Is Intent to Cause Infringement Even Relevant When Dealing With the Future?
The court's ruling, however, could be supported in another way: by concluding that inducement with respect to future acts of infringement does not require the patentee to establish that the accused party posessed "specific intent" to infringe the patent.   This is because when dealing with the future, there will necessarily be a court finding that the relevant third party conduct infringes. Inherent in the court's determination is the conclusion that once-daily use of Apotex's product – the use that the court concluded would result from Apotex's label – infringes AstraZeneca's patents.   In other words, once the court made this determination, AstraZeneca conclusively knew1 that patients taking its medication in a manner that it intended (i.e.: once daily) would infringe the method claims, and therefore continuing to engage in that conduct would satisfy the requrements of specific intent.  That Apotex may not want to infringe the patents is beside the point: its knowledge that the third party's conduct infringes, coupled with an intent to cause that conduct, is all that is required for this element of inducement, and for future acts those requirements would automatically be met. 

I'm not the first to identify this issue – Professor Timothy Holbrook made it few years back as well.  See Timothy Holbrook, The Intent Element of Induced Infringement, 22 SANTA CLARA COMPUTER & HIGH TECH. L.J. 399, 406 (2006).  Nevertheless, this is an instance where the argument that inducement of future infringement does not require the patent holder to prove specific intent to infringe could have been raised, and the parties apparently did not.

1 Note that this case involved a preliminary injunction, and thus the court's findings were necessarily non-final.  Thus one could argue that Apotex did not "know" that the future conduct would infringe despite the district court's preliminary determination of infringement because it could be subject to later change.   However, as in many pharmaceutical patent cases, the lower court's determination was made following substantial briefing and argument (along with a five-day hearing), and its reasoning was affirmed on appeal.  Furthermore, even in the preliminary injunction context, the focus should not be on the question of what Apotex thought in the past about infringement, but rather whether it would be substantially certain that the third party conduct would infringe in the future – an analysis that collapses into the district court's determination on the question of infringement.

18 thoughts on “Liability for Future Indirect Infringement

  1. 18

    Mmm not really. Writing directions to take a drug is hardly giving someone the keys to someone else’s property. Sorry broje, one deprives one person of one thing, and the other doesn’t.

    Patents are, by definition, non-rivalrous property rights. Inducement is giving someone else the keys to infringe on another’s property rights.

    So it’s like a lockpicking kit? Those are legal to sell so far as I’m aware.

    It wouldn’t be legal if the kit was intentionally targeted for a specific person’s door.

    And of course lets not forget that this particular “invention” that supposedly belongs to someone is probably on the 101 chopping block. Perhaps what we really need is a law that states that people who make a claim to property which fails 101 and thus is not their property shall pay those whom they harass? I think such a law would indeed be sound.

    Any 101 argument is irrelevant to the validity of inducement. What should or should not qualify for a patent has no bearing on whether someone should be accountable under this kind of theory. Fix the patentability issue and you fix the inducing bad patents issue.

    …Oh boy. I shouldn’t have started responding to your message piecemeal, without reading the whole thing first. If I had seen that second half, I wouldn’t have even bothered ha.

  2. 16

    “That’s what inducing infringent is.”

    Mmm not really. Writing directions to take a drug is hardly giving someone the keys to someone else’s property. Sorry broje, one deprives one person of one thing, and the other doesn’t.

    “The invention belongs to someone else, but you are selling your customers an infringement kit, with instructions to infringe, and no notice that using the kit as instructed will violate someone else’s legal rights.”

    So it’s like a lockpicking kit? Those are legal to sell so far as I’m aware.

    But lets just be honest broje, you’re saying that if they put a notice on the pill bottle that using it in the manner instructed would infringe a patent then the facts would be changed enough to make a hill of beans?

    And of course lets not forget that this particular “invention” that supposedly belongs to someone is probably on the 101 chopping block. Perhaps what we really need is a law that states that people who make a claim to property which fails 101 and thus is not their property shall pay those whom they harass? I think such a law would indeed be sound.

    Of course, the real issue here may very well be that we turned taking medicine into “propertylol”.

    “I once saw an “expert witness” on the stand claim that he used “high technology” to research the given topic. On cross that “high technology” was merely Google. It was hilarious.”

    Google is rather high technology lol.

    “nducing someone to interfere with someone else’s rights has been a tort for a century and a half longer than the First Amendment has existed.”

    And yet I don’t recall seeing anything about that in the case that introduced the topic to the courts for the first time.

    “You of all people should be aware that 35 USC 112, second paragraph, requires it to be specifically pointed out. You’re an examiner, so if it’s specific enough for you, it should be specific enough for … well, you.”

    “requires it”? Requires what? The claim? I do believe that for the actual statute to be constitutional the type of speech being prevented needs to be specifically laid out in the statute itself. With all of the jackrabbit patents being issued today, one could presumptively silence pretty much any type of speech that one could predict.

    “wrong in his judicial role of interpreting the law?”

    I don’t think I said that. I said he was wrong in the direction in which he influenced the law to be written.

    “While Stevens, whose legacy will be in trying to write law from the bench, simply divined the will of the legislature in how the law should have been written, and is your role model for ignoring what the law actually is.

    I see the difficulty you have 6 in your attempts to even pass the LSAT. Law is not the right field for you son.”

    Mmmm, you might be right, dictatorship might be better suited for me. I’m thinking perhaps a few third world countries.

    Or perhaps rousing the people against your nonsense lawls.

    “While Stevens, whose legacy will be in trying to write law from the bench, simply divined the will of the legislature in how the law should have been written, and is your role model for ignoring what the law actually is.”

    By the by, if you read my comment a little better, and understood the case before them, then you’d understand why nothing I said implied any of that.

  3. 14

    “You gotta love the “millenials” or whatever they’re called these days. Stick a few words into a search engine, click on the first link in the results, skim the page, and you’ve learned everything there is to know. You’re now an expert.”

    I once saw an “expert witness” on the stand claim that he used “high technology” to research the given topic. On cross that “high technology” was merely Google. It was hilarious.

  4. 13

    “I wonder, does anyone know if anyone has ever brought a first amendment defense in a induced infringment case like this”

    Why don’t you go assert free speech as a defense in a libel suit, and see how far that gets you.

    There are limits on free speech, and its not just speech that causes imminent danger of physical harm.

    You can’t go around selling people keys to other people’s houses, with an address, and instructions to go take their stuff under the belief that it’s your stuff and you just sold it to them.

    That’s what inducing infringent is. The invention belongs to someone else, but you are selling your customers an infringement kit, with instructions to infringe, and no notice that using the kit as instructed will violate someone else’s legal rights.

  5. 12

    “Yeah after having familiarized myself with the topic a bit…”

    You gotta love the “millenials” or whatever they’re called these days. Stick a few words into a search engine, click on the first link in the results, skim the page, and you’ve learned everything there is to know. You’re now an expert.

    “But he apparently never bothers to make the case as to why the doctrine of contributory infringement was either desirable or necessary. Good thing, since that is impossible.”

    Professor IANAE has sufficiently rebutted this nonsense.

    “My interest in this case suddenly has become a whole lot bigger than it used to be.”

    Too bad your understanding will never get a whole lot bigger.

    Lulz

  6. 10

    6: That is, before this nonsensical statutory or judicially made (I don’t even remember which) “right” to exclude others from inducing others to infringe your statutory patent right sprang forth unlooked for.

    Inducing someone to interfere with someone else’s rights has been a tort for a century and a half longer than the First Amendment has existed.

    6: All, or most, of those types of speech seem to be rather specifically prevented by statutes (at least that I know of, I didn’t check all of them).

    I had no idea the First Amendment didn’t apply to statutes. Fascinating.

    6: I don’t believe that “writing instructions for the use of a drug on a label” is very specifically pointed out. But what do I know, perhaps it is. Perhaps that’s a bad statute if so.

    You of all people should be aware that 35 USC 112, second paragraph, requires it to be specifically pointed out. You’re an examiner, so if it’s specific enough for you, it should be specific enough for … well, you.

  7. 9

    So…

    Judge Giles Rich, who guided the legislature in writing the law, then as a judge somehow was wrong in his judicial role of interpreting the law?

    While Stevens, whose legacy will be in trying to write law from the bench, simply divined the will of the legislature in how the law should have been written, and is your role model for ignoring what the law actually is.

    I see the difficulty you have 6 in your attempts to even pass the LSAT. Law is not the right field for you son.

  8. 8

    Yeah after having familiarized myself with the topic a bit it seems that the courts have long recognized that such a “doctrine” leads to absurdities. Just as in the first case dealing with contributory infringement, this case also depends on the patentee getting “the benefit of a patent” on ordinary articles of commerce, i.e. the old medicine in old bottles with old labels with new writing thereupon.

    “The doctrine of contributory infringement was first addressed by this Court in Morgan Envelope Co. v. Albany Paper Co., 152 U. S. 425 (1894). That case was a suit by a manufacturer of a patented device for dispensing toilet paper against a supplier of paper rolls that fit the patented invention. The Court accepted the contributory infringement doctrine in theory but held that it could not be invoked against a supplier of perishable commodities used in a patented invention. The Court observed that a contrary outcome would give the patentee “the benefit of a patent” on ordinary articles of commerce, a result that it determined to be unjustified on the facts of that case. Id., at 433.”

    link to scholar.google.com

    My interest in this case suddenly has become a whole lot bigger than it used to be.

    “We disagree with petitioners’ assessment. In our view, the relevant legislative materials abundantly demonstrate an intent both to change the law and to expand significantly the ability of patentees to protect their rights against contributory infringement.”

    From the above decision. Yes, I’m sure the court does feel that congress was sufficiently influenced in 1952 by special interests (specifically the patent lawlyers lobbying for this change) to codify nonsense that conflicted with at least the first amendment.

    As with most of the other nonsense in patent lawl, it all started with a monumental blunder by the courts back in the day. And, as per usual, the Justice Dept. was there to oppose it. Funny how the justice dept actually does have justice in mind when it comes to patents but so rarely does in other contexts isn’t it?

    And of course at the center of all the nonsense, there stands one man. Archnemesis of the People, Destroyer of All that is Good, and Right with the Patent Laws, Confounder of First Principles, the one, the ONLY Giles Rich. God rest his soul.

    Rich testified: “that early patent misuse decisions “seem to us now to have been just,” but that “this doctrine has been carried too far—so far that it . . . has practically eliminated from the law the doctrine of contributory infringement as a useful legal doctrine.” But he apparently never bothers to make the case as to why the doctrine of contributory infringement was either desirable or necessary. Good thing, since that is impossible.

    Oh and look, in that decision I posted above, there’s our old friend Stevens, along with his buddy White (who penned this portion), pointing out to his dim-witted fellows on the court why their reasoning is shoddy at best:

    “The Court acknowledges that respondent refused to license others to sell propanil, but it observes that “nothing on the face of the statute requires it to do so.” Ante, at 202; cf. ante, at 213-214. As much could be conceded, but it would not follow that respondent is absolved from a finding of patent misuse. Section 271 (d) does not define conduct that constitutes patent misuse; rather it simply outlines certain conduct that is not patent misuse.”

    Of course, maybe they had other reasoning that only they are privy to, but we’ll never know.

  9. 5

    “I wouldn’t expect the First Amendment to give much protection for inducing someone to break the law or violate someone else’s rights”

    Lulz, your (or a court/lawl) having made the term “violating someone else’s rights” even apply to this situation came a long time after the first amendment was around. The first amendment I do believe, in this situation came first. That is, before this nonsensical statutory or judicially made (I don’t even remember which) “right” to exclude others from inducing others to infringe your statutory patent right sprang forth unlooked for.

    Perchance the whole statute or judicial holding even encumbering businesses with this nonsense liability should have been scrapped a long time ago.

    “You could raise it, I suppose, but you could raise it just as convincingly in defense of conspiracy to commit crimes, slander, trademark dilution, “exporting” the contents of a patent application, tortious interference with contractual relations, copyright infringement, shouting “fire” in a crowded theater…”

    All, or most, of those types of speech seem to be rather specifically prevented by statutes (at least that I know of, I didn’t check all of them). I don’t believe that “writing instructions for the use of a drug on a label” is very specifically pointed out. But what do I know, perhaps it is. Perhaps that’s a bad statute if so.

    I wonder, if they instead printed a news article reporting the fact that taking 1 dose every however often would treat x condition would that still induce infringement or would that be covered under freedom of the press?

    Fact is, dabbling in prevention of speech or distribution of news worthy facts should have always been far beyond the reach of patent lawl.

  10. 4

    I wonder, does anyone know if anyone has ever brought a first amendment defense in a induced infringment case like this

    I wouldn’t expect the First Amendment to give much protection for inducing someone to break the law or violate someone else’s rights. You could raise it, I suppose, but you could raise it just as convincingly in defense of conspiracy to commit crimes, slander, trademark dilution, “exporting” the contents of a patent application, tortious interference with contractual relations, copyright infringement, shouting “fire” in a crowded theater…

  11. 3

    “This all sounds like time travel problems.”

    lulz. That’s what happens when you delve too deeply into nonsense.

    In a word: madness.

    Why in the world we would ever permit “induced infringement” findings is the real issue here.

    I wonder, does anyone know if anyone has ever brought a first amendment defense in a induced infringment case like this

  12. 2

    Jason The court’s ruling, however, could be supported in another way: by concluding that inducement with respect to future acts of infringement does not require the patentee to establish that the accused party posessed “specific intent” to infringe the patent.

    I don’t entirely agree with the court’s decision, but I can at least understand the reasoning. This kerfuffle about “future intent” seems like a pointless exercise in sophistry and I don’t blame the parties for not bringing it up. Why would you want to piss a judge off?

    The marjority’s discussion of inducement of infringement in this case is particularly interesting because it deals with inducement of infringement in the context of future acts, as opposed to damages for past inducement

    But even when considering “past inducement”, the seame elements are there: knowledge of the patent, acts that cause a third party to infringe, and actual infringement by that third party “in the future” relative to both the aforemetioned knowledge and acts.

  13. 1

    Summary of the above: Inducement of future infringement need not require the patent holder to prove present specific intent to infringe since

    1. AstraZeneca had present knowledge that the third party’s present conduct infringes.

    2. AstraZeneca had present intent to cause that same infringing conduct in the future.

    Apotex presently did not want to infringe the patents in the future is beside the point.

    This all sounds like time travel problems.

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