Wednesday, June 01, 2011

J. Kennedy a minority of one in Global-Tech decision

By an 8-1 vote, the Supreme Court affirmed the judgment, but not the reasoning, of the CAFC in the case Global-Tech v. SEB.

The reasoning of the CAFC at issue before the Supreme Court:

Summarizing a recent en banc
decision, the Federal Circuit stated that induced in­
fringement under §271(b) requires a “plaintiff [to] show
that the alleged infringer knew or should have known
that his actions would induce actual infringements” and
that this showing includes proof that the alleged infringer
knew of the patent. Id., at 1376. Although the record
contained no direct evidence that Pentalpha knew of
SEB’s patent before April 1998, the court found adequate
evidence to support a finding that “Pentalpha deliberately
disregarded a known risk
that SEB had a protective pat­
ent.” Id., at 1377. Such disregard, the court said, “is not
different from actual knowledge, but is a form of actual
knowledge.” Ibid.

An article by Mark Lemley is cited:

As noted above, induced infringement was not consid­
ered a separate theory of indirect liability in the pre-1952
case law. Rather, it was treated as evidence of “contribu­
tory infringement,” that is, the aiding and abetting of
direct infringement by another party. See Lemley, In­
ducing Patent Infringement, 39 U. C. D. L. Rev. 225, 227
(2005). When Congress enacted §271, it separated what
had previously been regarded as contributory infringe­
ment into two categories, one covered by §271(b) and the other covered by §271(c).

OF Aro-II:

While there is much to be said in favor of both views
expressed in Aro II, the “holding in Aro II has become
a fixture in the law of contributory infringement under
[section] 271(c),” 5 R. Moy, Walker on Patents §15:20,
p. 15–131 (4th ed. 2009)—so much so that SEB has not
asked us to overrule it, see Brief for Respondent 19, n. 3.
Nor has Congress seen fit to alter §271(c)’s intent re­
quirement in the nearly half a century since Aro II was
decided. In light of the “‘special force’” of the doctrine of
stare decisis with regard to questions of statutory inter­
pretation, see John R. Sand & Gravel Co. v. United States,
552 U. S. 130, 139 (2008), we proceed on the premise that
§271(c) requires knowledge of the existence of the patent
that is infringed.

The Supreme Court rejects "deliberate indifference" but adopts
"willful blindness" -->

Returning to Pentalpha’s principal challenge, we 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.

The majority cited the Jewell case of CA9:

It is also said that persons who know enough
to blind themselves to direct proof of critical facts
in effect have actual knowledge of those facts.
See United States v. Jewell, 532 F. 2d 697, 700 (CA9
1976) (en banc).

Of "willful blindness" -->

While the Courts of Appeals articulate the doctrine of
willful blindness in slightly different ways, all appear to
agree on two basic 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.

In terms of unfortunate names:

SEB’s cool-touch fryer was an innovation in the U. S.
market when Pentalpha copied it. App. to Brief for Re­
spondent 49. As one would expect with any superior
product, sales of SEB’s fryer had been growing for some
time. Ibid. Pentalpha knew all of this, for its CEO and
president, John Sham, testified that, in developing a
product for Sunbeam, Pentalpha performed “market re­
search” and “gather[ed] information as much as possible.”
App. 23a. Pentalpha’s belief that SEB’s fryer embodied
advanced technology that would be valuable in the U. S.
market is evidenced by its decicosmetic features of SEB’s fryer.


Even more telling is Sham’s decision not to in-
form the attorney from whom Pentalpha sought a right-to­
use opinion that the product to be evaluated was simply a
knockoff of SEB’s deep fryer. On the facts of this case, we
cannot fathom what motive Sham could have had for
withholding this information other than to manufacture a
claim of plausible deniability in the event that his com­
pany was later accused of patent infringement.

[Query: in a freedom to operate opinion, a patent attorney
compares the proposed product against claims of existing patents;
did the attorney identify the appropriate claims? The Supreme Court
noted: Asked whether the attorney would
have fared better had he known of SEB’s design, Sham
was nonresponsive. All he could say was that a patent
search is not an “easy job” and that is why he hired attor­
neys to perform them. ]

Justice Kennedy, in dissent, also cited Jewell:

Yet the Court does more. Having interpreted the stat-
ute to require a showing of knowledge, the Court holds
that willful blindness will suffice. This is a mistaken step.
Willful blindness is not knowledge; and judges should not
broaden a legislative proscription by analogy. See United
States v. Jewell, 532 F. 2d 697, 706 (CA9 1976) (en banc)
(Kennedy, J., dissenting) (“When a statute specifically
requires knowledge as an element of a crime, however, the
substitution of some other state of mind cannot be justified
even if the court deems that both are equally blamewor-
thy”) In my respectful submission, the Court is incorrect
in the definition it now adopts; but even on its own terms
the Court should remand to the Court of Appeals to con-
sider in the first instance whether there is sufficient evi-
dence of knowledge to support the jury’s finding of

Justice Kennedy writes: One
can believe that there is a “high probability” that acts
might infringe a patent but nonetheless conclude they do
not infringe.


And although most Courts of Appeals have embraced
willful blindness, counting courts in a circuit split is not
this Court’s usual method for deciding important questions of law.


The majority’s decision to expand the
statute’s scope appears to depend on the unstated premise
that knowledge requires certainty, but the law often per-
mits probabilistic judgments to count as knowledge. Cf.
Connecticut Mut. Life Ins. Co. v. Lathrop, 111 U. S. 612,
620 (1884) (Harlan, J.) (“[B]eing founded on actual obser-
vation, and being consistent with common experience and
the ordinary manifestations of the condition of the mind, it
is knowledge, so far as the human intellect can acquire
knowledge, upon such subjects”).

See also

Brief in Global-Tech v. SEB


Blogger New said...

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.

4:40 PM  

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