Indirect Infringement II

1. Indirect Infringement II Prof Merges Patent Law – 11.8.2011

3. CVSG – Saint-Gobain case Saint–Gobain Ceramics & Plastics, Inc. v. Siemens Medical Solutions USA, Inc., Supreme Court No. 11-301, opinion below, Siemens Medical Solutions USA, Inc. v. Saint–Gobain Ceramics & Plastics, Inc. 647 F.3d 1373 (Fed Cir. 2011)(Lourie, J.), reh’g den, 647 F.3d 1373 (2011)

4. Infringement • Direct • Indirect

5. 35 U.S.C. § 271(a) (a) Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States, or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.

6. Indirect infringement: Inducement and contributory infringement 35 USC 271 (b): Whoever actively induces infringement of a patent shall be liable as an infringer.

7. 271(c): Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.

8. Infringement checklist • Single entity? • Perform infringing act? • In US?

9. Dealing with “missing pieces”

10. Infringement checklist • Single entity? • Perform infringing act? • In US?

11. 35 USC 271(c) (c) Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination, or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.

12. What is required for indirect infringement? • Someone has to directly infringe • The indirect infringer must instruct or enable the infringer’s actions

13. Infringement checklist • Single entity? • Perform infringing act? • In US?

14. Contributory Infringement • Start with the Aro case in the Supreme Court

15. Aro Mfg.

17. Aro I – Direct and Indirect Infringement • Claims included (1) convertible top and (2) car itself • Convertible Top Replacement Co. sued Aro Co., a “replacement top company” • Car owners are DIRECT infringers • Aro was (at most) a contributory infringer

18. Aro I - issues • “Reconstruction and repair” doctrine • For owners of LICENSED cars only (GM cars) “Repair” is ok, reconstruction is not • Includes an implied license notion: purchasers implicitly have right to maintain what they buy

19. Aro I: What About Ford Car Owners? • Their repair of convertible tops IS an infringing act • No “implied license” to repair convertible tops; never paid patentee for use of patented invention

20. Aro II • Ford customer sales: unlicensed • Even “repair” is infringing here • Not a question of exhaustion • Customers infringe: repair “perpetuates the infringing use” - p. 971

21. This case, Aro II • Aro is back in court for alleged infringement of CTR’s patent – by virtue of repair of tops on Ford Cars • BUT:Aro cannot be a direct infringer; so the suit is for CONTRIBUTORY INFRINGEMENT

22. Aro II: 271(c) • 271(c) “knowledge” • Knowledge: of both patent and infringement • See p. 912 n 8

23. Exhaustion: Implicit in Aro II • At issue in LG v Quanta case from Supreme Court last term • Who is liable in the “chain of possession” of a patented item? When does liability cut off?

24. Infringement checklist • Single entity? • Perform infringing act? • In US?

25. CR Bard Aorta Coronary Artery

27. Process claim • Use of apparatus in unclogging arteries

28. 271(c): Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.

29. Substantial noninfringing uses? • Claim specifies catheter opening location • Are there noninfringing uses of the defendant’s catheter?

30. Casebook, p. 918 [O]n this record a reasonable jury could find that, pursuant to the procedure described in the first of the fact patterns (a noninfringing procedure), there are substantial noninfringing uses for the ACS catheter.

31. Infringement checklist • Single entity? • Perform infringing act? • In US?

32. 35 U.S.C. § 271(g) Additional Protection for Product Made By Process Patents: Import Into the United States or Offer to Sell, Sells or Uses Within the United States a Product Which is Made By a Process Patent. • Importation Must Occur During Term of Patent • Product Made by Process Not Considered As Such After (i) materially changed by subsequent process, or (ii) becomes trivial and nonessential component of another product

33. Microsoft v. AT&T

34. 271 USC (f)(1) Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.

35. Software as component • Overseas supply

36. (2) Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.

37. The question before us: Does Microsoft’s liability extend to computers made in another country when loaded with Windows software copied abroad from a master disk or electronic transmission dispatched by Microsoft from the United States? Our answer is “No.”

38. Other complexities • Components imported into US • 271(g)

39. Global-Tech Appliances v. SEB • 131 S. Ct. 2060 (2011)

40. Facts • SEB – French company with innovative deep fryer technology • US Patent 4,995,312 • Sunbeam  Pentalpha/Global-Tech [Outsourced design of competitive product]

43. Infringement law/strategy • Why sue a party who is not a direct infringer? • Business reasons: Don’t offend customers/distributors • Foreign bias concerns • How does inducement/contributory infringement come into play? • Must decide under case law whether adding non-direct infringers leaves a viable case

44. Pentalpha/Global-Tech Product Clearance Procedure • Pentalpha did not tell lawyer that it had copied directly from SEB design • Attorney failed to find SEB patent in search prior to issuing opinion letter • Willful infringement relevance

45. Infringement theories • Direct infringement: Pentalpha itself made, used and perhaps sold some infrginging copies of the SEB design • Indirect: Pentalpha induced its contractual partners/branded buyers (Sunbeam, Fingerhut, Montgomery-Ward) to use and sell infringing copies

46. Inducement standard • Some level of knowledge (scienter) is required for indirect infringement • The specific act of the accused party is attenuated, not directly listed among the prohibited menu of activities; so to even out the analysis some knowledge is required (“I know my acts will lead you to infringe.”)

47. Federal Circuit standard Court should find infringement where defendant “deliberately disregarded a known risk that SEB had a protective patent.”

48. Conflicting precedent: P. 45 In Aro II, a majority held that a violator of § 271(c) must know “that the combination for which his component was especially designed was both patented and infringing,” 377 U.S., at 488, and as we explain below, that conclusion compels this same knowledge for liability under § 271(b).

49. Holding – p. 46 [W]e agree that deliberate indifference to a known risk that a patent exists is not the appropriate standard under § 271(b). We nevertheless affirm the judgment of the Court of Appeals because the evidence in this case was plainly sufficient to support a finding of Pentalpha’s knowledge under the doctrine of willful blindness.

50. Willful Blindness • Given the long history of willful blindness and its wide acceptance in the Federal Judiciary, we can see no reason why the doctrine should not apply in civil lawsuits for induced patent infringement under 35 U.S.C. § 271(b).