Supreme Court Rules That "Willful Blindness" Is Sufficient for Inducement of Patent Infringement
A common defense to claims of inducement of patent infringement is that the accused infringer did not know of the patent and so could not have intended to induce its customer to infringe the patent. That defense was put in jeopardy last year when the Federal Circuit broadened the concept of “actual knowledge” of a patent for purposes of proving induced infringement. SEB S.A. v. Montgomery Ward & Co., Inc., 594 F.3d 1360 (Fed. Cir. 2010). The issue is important to many industries because induced infringement is commonly alleged in situations where a defendant’s customers (rather than the defendant itself) use the allegedly infringing product or process. The Federal Circuit has struggled for years to articulate a concise standard in this area, and the Supreme Court, apparently dissatisfied by the Federal Circuit’s ruling, agreed earlier this year to review this critical area of patent law
In a near unanimous decision on May 31, the Supreme Court reaffirmed that a defendant accused of inducement of infringement must have knowledge that the acts it induced constitute patent infringement but this “knowledge” element will be satisfied by a finding of “willful blindness” to the existence of the patent. This assessment, taken from criminal law, is more stringent than the “deliberate indifference” test previously articulated by the Federal Circuit. Global-Tech Appliances, Inc. v. SEB S.A.
Under the doctrine of “willful blindness,” a defendant is liable for induced infringement even if it did not have actual knowledge of a patent if it (1) subjectively believed that there is a high probability that a patent exists; and (2) took deliberate actions to avoid learning of that fact. Willful blindness, the Court held, has a “limited scope that surpasses recklessness and negligence” and that a willfully blind defendant “is one who takes deliberate actions to avoid confirming a high probability of wrongdoing and can almost be said to have actually known the critical facts.”
Although the Supreme Court overturned the Federal Circuit’s standard for inducement liability, it affirmed the result on the grounds that the evidence was more than sufficient for a jury to find that the accused infringer met the willful blindness standard. In Global-Tech, the infringer, Pentalpha:
- Copied the patentee’s “cool-touch” deep fryer;
- Believed that the patentee’s product embodied advanced technology that would be valuable in the U.S. market, as shown by its decision to copy all but the cosmetic features of the deep fryer;
- Copied an overseas model of the patented deep fryer, aware that it would not bear U.S. patent markings;
- Failed to inform the attorney from whom it sought a right-to-use opinion that it had copied the deep fryer.
The Court stated that it “cannot fathom” what motive Pentalpha might have had for withholding this information from its attorney other than to manufacture a claim of plausible deniability in the event that it was later accused of patent infringement.
As a practical matter, the willful blindness standard will likely be difficult to meet, and so, in most cases, patentees will have to show that an alleged infringer had actual knowledge of the patent. As the Supreme Court pointed out, willful blindness requires more than reckless or negligent conduct, and evidence that an accused infringer subjectively believed that there was a high probability that it was inducing patent infringement will be difficult to obtain. If the defendant in this case, Pentalpha, for example, had just told its right-to-use attorney that it had copied a competitor’s product or even if it had copied a U.S. model of the deep fryer that had no patent markings, it may have escaped liability. Thus, it is likely that cases of active inducement, in the absence of actual knowledge of the patent and the infringing nature of the induced acts, will probably be few and far between.