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Global-Tech Appliances, Inc., et al. v. SEB S. A. - A Higher Standard For Inducement Under §271(b)

6/6/2011
Global-Tech Appliances, Inc., et al. v. SEB S. A.
Supreme Court No. 10–6
May 31, 2011

In a patent dispute that called into question the proper standard for proving induced infringement under §271(b), the Supreme Court raised the standard and thus the level of culpability required for those accused of aiding and abetting acts of direct infringement under §271(a).

Writing for an 8-1 majority, Justice Alito first confirmed that §271(b), which states simply that “[w]hoever actively induces infringement of a patent shall be liable as an infringer,” has an element of intent, and therefore requires knowledge that the induced acts constitute patent infringement. Under that construction of the statute, the Federal Circuit standard requiring deliberate indifference to a known risk that a patent exists was not the appropriate standard under §271(b).

Borrowing from a large body of criminal law, the Court held that willful blindness is the appropriate standard of culpability required for proving induced infringement. The articulated rationale for the invocation of this doctrine is that defendants who behave in this manner are just as culpable as those who have actual knowledge. Citing United States v. Jewell, the Court stated that “persons who know enough to blind themselves to direct proof of critical facts in effect have actual knowledge of those facts.” In order to prove willful blindness, (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.

Under this formulation, a willfully blind defendant is one who takes deliberate actions to avoid confirming a high probability of wrongdoing and who can almost be said to have actually known the critical facts. In contrast, a reckless defendant is one who merely knows of a substantial and unjustified risk of such wrongdoing, and a negligent defendant is one who should have known of a similar risk but, in fact, did not. Willful blindness therefore surpasses both recklessness and negligence in terms of culpability.

Notwithstanding the Federal Circuit’s application of the “deliberate indifference” test, the Supreme Court affirmed the Federal Circuit’s judgment, since the evidence was sufficient for a jury to have found induced infringement even under the willful blindness standard.

In a lone dissent, Justice Kennedy agreed with the majority that a defendant must know the induced acts constitute patent infringement, but disagreed that willful blindness can suffice to show statutory knowledge.

Based on the subtle semantic distinctions between formulations such as deliberate indifference, conscious avoidance and willful blindness, it remains to be seen whether the new test will result in a truly different standard when presented to lay juries.