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13 October 2010

US Supreme Court Grants Certiorari in Global-Tech Appliances, Inc. v. SEB S.A.

Chapter 28 of the United States Patent Act, 35 U.S.C. § 271(b), provides that whoever actively induces infringement of a patent shall be liable as an infringer. The Supreme Court granted certiorari today in Global-Tech Appliances, Inc. v. SEB S.A., No. 10-6, to determine the mental state that must be proven to impose inducement liability under 35 U.S.C. § 271(b).

The Court’s resolution of this case will be of considerable interest to patent holders and manufacturers. If the Court holds that a plaintiff must prove that the defendant had actual knowledge of the infringed patent, inducement liability will be more difficult to establish than if the Court adopts a deliberate-indifference standard instead.

Petitioners in this case developed a home-cooking appliance after studying several features of a device that respondent had earlier produced. Petitioners’ attorney determined that petitioners’ appliance did not infringe any United States patent; however, petitioners did not inform the attorney that they had analyzed respondent’s device prior to developing their device. Petitioners sold their appliance to retailers in the United States and abroad. Petitioners learned of respondent’s patent when respondent sued a company that had bought the appliance from petitioners. Respondent subsequently sued petitioners directly, alleging that petitioners had induced their customers’ infringement of respondent’s patent. The jury found in respondent’s favor.

On appeal to the Federal Circuit, petitioners argued that they could not be held liable for inducement under § 271(b) because they were not aware of respondent’s patent before making and selling their device. In DSU Medical Corp. v. JMS Co., Ltd., 471 F.3d 1293 (Fed. Cir. 2006) (en banc), the Federal Circuit had ruled that the party must have actual knowledge of the patent being infringed to be liable for inducement. And in MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 936 (2005), a copyright case, the Supreme Court concluded that the mental state required for active-inducement infringement was “an affirmative intent that the product be used to infringe.” However, in the decision below, the Federal Circuit held that petitioners’ “deliberate indifference” as to whether its device infringed a patent was sufficient to impose liability under § 271(b).594 F.3d 1360, 1376–77.

Absent extensions, amicus briefs in support of the petitioners will be due on December 3, 2010, and amicus briefs in support of the respondent will be due on January 3, 2011. Any questions about this case should be directed to Andrew Tauber (+1 202 263 3324) in our Washington, DC office.

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