Feb 201018

CAFC: You Can’t Copy And Then Turn A Blind Eye To Avoid Induced Infringement

The Federal Circuit has recently addressed the issue of the knowledge required to support a finding of induced infringement under 35 U.S.C. § 271(b).  SEB S.A., et al. v. Montgomery Ward & Co., et al., Case Nos. 2009-1099, -1108, -1119 (Fed. Cir. 2010).  The Federal Circuit addressed past precedent and drew upon case law from other civil contexts to ultimately find that “a claim for inducement is viable even where the patentee has not produced direct evidence that the accused infringer actually knew of the patent-in-suit.”  P. 25.  The Federal Circuit found that the record supported the conclusion that the defendant deliberately disregarded a known risk that a patent covered its product.  In this case, (1) the defendant copied the plaintiff’s product, (2) the defendant hired a patent attorney to perform a right-to-use study for its product, but did not tell the patent attorney that it had copied the plaintiff’s product, and (3) the defendant’s president was well versed in the U.S. patent system.  As a result and based on a finding of direct and induced infringement, the Federal Circuit upheld the $4.8 million judgment against the defendant.

The Federal Circuit clearly stated that a “failure to inform one’s counsel of copying would be highly suggestive of deliberate indifference in most circumstances.”  Id.  As is always the case, clients should be open and honest with their attorneys.  This is particularly important if the disclosed invention was in any way based upon a known product or design.  Inventors should understand that this type of information is important to the work of their patent attorney.

To download a copy of the SEB decision, please click here.