The Supreme Court recently affirmed the Federal Circuit’s decision that Pentalpha Enterprises, Ltd. (wholly owned subsidiary of Global-Tech Appliances, Inc.) induced infringement of SEB SA’s deep fryer patent. Global-Tech Appliances, Inc., et al., v. SEB S. A. (2011). However, the Supreme Court rejected the Federal Circuit’s finding that only deliberate indifference to the risk of infringement was needed for a finding of induced infringement and raised the bar for proving inducement.

Infringement of another’s patent is codified in 35 USC §271. §271(a) covers direct infringement, while §271(b) and §271(c) deal with contributory infringement, i.e. aiding and abetting of direct infringement by another party. §271(a) states “[e]xcept 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.” Since direct infringement requires no more than unauthorized use of a patented invention, an infringer’s knowledge or intent is irrelevant in direct infringement cases.

§271(b) and §271(c) cover two different categories of contributory infringement: induced infringement and sale of a component of a patented invention. §271(b) recites “[w]hoever actively induces infringement of a patent shall be liable as an infringer.” §271(c) states “[w]hoever 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.” With regard to the knowledge or intent element of §271(c), the Supreme Court held that a violator of §271(c) must know “that the combination for which his component was especially designed was both patented and infringing.” Aro Mfg. Co. v. Convertible Top Replacement Co. 377 U.S. 476 (1964) (Aro II).

In Global-Tech v SEB, the Supreme Court explained that since §271(b) and §271(c) have a common origin (contributory infringement), and the text of both provisions are ambiguous as to the intent needed to impose liability, the same knowledge is required under both §271(b) and §271(c). Further, the Supreme Court stated that “deliberate indifference” to a known risk that a patent exists does not satisfy the knowledge required by §271(b), but instead, the knowledge element can be met by showing of “willful blindness.” Two requirements for the “willful blindness” standard are: 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 the fact. In this case, Pentalpha purchased an overseas model of SEB’s fryer, knowing that it would not bear U.S. patent markings; copied all but the fryer’s cosmetic features; and decided not to inform its attorney that the product to be evaluated was simply a knockoff of SEB’s fryer. Taking all of these facts together, the Supreme Court held that the evidence was more than sufficient for a jury to find that Pentalpha subjectively believed there was a high probability that SEB’s fryer was patented and took deliberate steps to avoid knowing that fact, and that it therefore willfully blinded itself to the infringing nature of its sales.

In this case, the Supreme Court’s interpreted the knowledge element of the statute to be satisfied by “willful blindness”. As warned by Justice Kennedy in his dissent, this case may have ramifications for future cases involving knowledge, such as the knowledge or intent element of the false marking statute. Further, it is also noteworthy that since a finding of liability under induced infringement requires subjective intent, the risk of such liability can be significantly reduced by a competent opinion supporting a reasonable belief that the patent is invalid or non-infringing.