Global-Tech Appliances, Inc. v. SEB S.A.: Importing criminal law into patent infringement


Tuesday’s Supreme Court decision in the Global-Tech Appliances v. SEB S.A. case set a higher mental state required to show infringement by inducement.  Many in the patent community are contemplating what implications the decision will have on the area of intellectual property? To get you up to speed, Vanessa Perez-Ramos, associate at Birch, Stewart, Kolasch & Birch, sent in this article discussing the key points of the opinion.

Relying on the well-established criminal law doctrine of “willful blindness,” the Court in Global-Tech Appliances, Inc., et al. v. SEB S.A., 563 U.S. _____ (2011), affirmed CAFC’s ruling that Global-Tech was liable for induced patent infringement of SEB’s deep fryer patents under 35 U.S.C. § 271(b).

Pentalpha Enterprises, a Global-Tech subsidiary, purchased an SEB fryer in a foreign market (which fryer unsurprisingly lacked U.S. patent markings) and virtually copied all of the fryer’s features, with the exception of the fryer’s cosmetic elements. Pentalpha hired an attorney to conduct a right-to-use study, but did not inform the attorney that the fryer was a replica of an SEB’s fryer. The attorney failed to locate SEB’s patent, and issued an opinion that Pentalpha’s fryer did not infringe any of the patents found by him. Penthalpa sold the fryers to Sunbeam Products, Inc., and Sunbeam resold them in the U.S. under its own trademarks. After settling a lawsuit against Sunbeam for patent infringement, SEB sued Pentalpha for actively inducing Sunbeam (and others) to sell or offer to sell the fryers at issue in contravention of § 271(b).

35 U.S.C. § 271(b) states: “Whoever actively induces infringement of a patent shall be liable of infringement.” In determining whether “actively induc[ing] infringement” requires knowledge on the part of the inducer that the conduct induced in another amounts to infringement, the Court looked at the statutory text and case law predating the enactment of § 271. Relying on Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476 (Aro II), the Court concluded that induced infringement under § 271 (b) requires knowledge of the existence of a patent that is being infringed (e.g., “knowledge that the induced acts constitute patent infringement”).

Although the Court admitted that deliberate indifference to a known risk that a patent exists (the standard employed by CAFC) is not the appropriate standard under § 271(b), the Court nonetheless concluded that the “knowledge” requirement can be satisfied by evidence of willful blindness, e.g., evidence that a defendant took deliberate actions “to avoid confirming a high probability of wrongdoing and…can almost be said to have actually known the critical facts.”

The Court articulated a two-prong test for willful blindness: (1) the defendant must subjectively believe that there is a high probability that a fact exists, and (2) the defendant must take deliberate actions to avoid learning of that fact. The Court concluded that Pentalpha’s actions, especially the fact that the attorney was not informed that Pentalpha’s fryer was “simply a knockoff of SEB’s deep fryer,” evidence that Pentalpha subjectively believed there was a high probability that SEB’s fryer was patented (e.g., prong (1)) and took deliberate steps to avoid learning about SEB’s patent (e.g., prong (2)).



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2 Responses to “Global-Tech Appliances, Inc. v. SEB S.A.: Importing criminal law into patent infringement”

  1. BBaum says:

    I suggest that the Federal Circuit is the one that grafted a criminal law concept onto inducement in DSU Medical v. JMS, when they held that “specific intent” was required for inducement. Specific intent is a concept well known to criminal lawyers (and to be fair, it is a tort concept as well). And the issue of “willful blindness” is also well known in criminal law. The Federal Circuit’s problem arose because it did not know enough criminal law to deal with willful blindness, so it adopted a different concept — “deliberate indifference” — from yet another area of law; civil rights under 42 U.S.C. 1983. The Supreme Court correctly recognized that the problem of one intentionally remaining ignorant of facts is addressed by the “willful blindness” doctrine. I would attribute the Federal Circuit’s reliance on the wrong test to the fact that it has neither a civil rights nor a criminal docket.

  2. patent_litigation says:

    The Court’s ruling makes sense because Pentalpha did not tell its attorney that it had purchased and directly, deliberately copied the SEB fryer. If Pentalpha had informed its lawyer as to this fact, then the attorney likely would have found the patent. Because of this deliberate failure to inform the attorney of its copying, the prior art search was just a cover, and “willful blindness” makes complete sense. That considered, I’m glad this patent litigation went in favor of SEB. However, (hopefully) this kind of fact pattern will likely be so rare that the ruling will not have a huge effect on patent litigation in the immediate future.

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