Indirect Infringement II

Indirect Infringement II Prof Merges Patent Law – 11.1.2012

Infringement • Direct • Indirect

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.

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

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.

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

Dealing with “missing pieces”

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.

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

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

Aro Mfg.

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

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

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

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

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

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

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?

CR Bard Aorta Coronary Artery

Process claim • Use of apparatus in unclogging arteries

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.

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

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.

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

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

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

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

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

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.”)

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

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).

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.

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).

Requirements (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. We think these requirements give willful blindness an appropriately limited scope that surpasses recklessness and negligence.

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

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.

Indirect Infringement II