Indirect and Foreign Infringement

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Indirect Infringement II

Prof Merges

Patent Law – 11.1.2012

Direct

Indirect

Infringement

35 U.S.C.

§

271(a)

(a) Except 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.

Indirect infringement: Inducement and contributory infringement

35 USC 271 (b):

Whoever actively induces infringement of a patent shall be liable as an infringer.

271(c): Whoever 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.

Infringement checklist

Single entity?

Perform infringing act?

In US?

Dealing with “missing pieces”

Infringement checklist

Single entity?

Perform infringing act?

In US?

35 USC 271(c)

(c) Whoever 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.

What is required for indirect infringement?

Someone has to directly infringe

The indirect infringer must instruct or enable the infringer’s actions

Infringement checklist

Single entity?

Perform infringing act?

In US?

Contributory Infringement

Start with the Aro case in the Supreme Court

Aro Mfg.

Aro I – Direct and Indirect

Infringement

Claims included (1) convertible top and (2) car itself

Convertible Top Replacement Co. sued Aro

Co., a “replacement top company”

Car owners are DIRECT infringers

Aro was (at most) a contributory infringer

Aro I - issues

“Reconstruction and repair” doctrine

For owners of LICENSED cars only (GM cars)

“Repair” is ok, reconstruction is not

Includes an implied license notion: purchasers implicitly have right to maintain what they buy

Aro I: What About Ford Car

Owners?

Their repair of convertible tops IS an infringing act

No “implied license” to repair convertible tops; never paid patentee for use of patented invention

Aro II

Ford customer sales: unlicensed

Even “repair” is infringing here

Not a question of exhaustion

Customers infringe: repair “perpetuates the infringing use” - p. 971

This case, Aro II

Aro is back in court for alleged infringement of CTR’s patent – by virtue of repair of tops on Ford Cars

BUT: Aro cannot be a direct infringer; so the suit is for CONTRIBUTORY INFRINGEMENT

Aro II: 271(c)

271(c) “knowledge”

Knowledge: of both patent and infringement

See p. 912 n 8

Exhaustion: Implicit in Aro II

At issue in LG v Quanta case from Supreme

Court last term

Who is liable in the “chain of possession” of a patented item? When does liability cut off?

Infringement checklist

Single entity?

Perform infringing act?

In US?

CR Bard

Aorta

Coronary

Artery

Process claim

Use of apparatus in unclogging arteries

271(c): Whoever 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.

Substantial noninfringing uses?

Claim specifies catheter opening location

Are there noninfringing uses of the defendant’s catheter?

Casebook, p. 918

[O]n this record a reasonable jury could find that, pursuant to the procedure described in the first of the fact patterns (a noninfringing procedure), there are substantial noninfringing uses for the ACS catheter.

Global-Tech Appliances v. SEB

131 S. Ct. 2060 (2011)

Facts

SEB – French company with innovative deep fryer technology

US Patent 4,995,312

Sunbeam

Pentalpha/Global-Tech

[Outsourced design of competitive product]

Infringement law/strategy

Why sue a party who is not a direct infringer?

Business reasons: Don’t offend customers/distributors

Foreign bias concerns

How does inducement/contributory infringement come into play?

Must decide under case law whether adding nondirect infringers leaves a viable case

Pentalpha/Global-Tech Product

Clearance Procedure

Pentalpha did not tell lawyer that it had copied directly from SEB design

Attorney failed to find SEB patent in search prior to issuing opinion letter

Willful infringement relevance

Infringement theories

Direct infringement: Pentalpha itself made, used and perhaps sold some infrginging copies of the SEB design

Indirect: Pentalpha induced its contractual partners/branded buyers (Sunbeam,

Fingerhut, Montgomery-Ward) to use and sell infringing copies

Inducement standard

Some level of knowledge (scienter) is required for indirect infringement

The specific act of the accused party is attenuated, not directly listed among the prohibited menu of activities; so to even out the analysis some knowledge is required (“I know my acts will lead you to infringe.”)

Federal Circuit standard

Court should find infringement where defendant “deliberately disregarded a known risk that SEB had a protective patent.”

Conflicting precedent: P. 45

In Aro II, a majority held that a violator of

§

271(c) must know “that the combination for which his component was especially designed was both patented and infringing,” 377 U.S., at

488, and as we explain below, that conclusion compels this same knowledge for liability under

§

271(b).

Holding – p. 46

[W]e 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.

Willful Blindness

Given the long history of willful blindness and its wide acceptance in the Federal Judiciary, we can see no reason why the doctrine should not apply in civil lawsuits for induced patent infringement under 35 U.S.C.

§

271(b).

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. We think these requirements give willful blindness an appropriately limited scope that surpasses recklessness and negligence.

Infringement checklist

Single entity?

Perform infringing act?

In US?

35 U.S.C.

§

271(g)

Additional Protection for Product Made By

Process Patents: Import Into the United States or

Offer to Sell, Sells or Uses Within the United

States a Product Which is Made By a Process

Patent.

Importation Must Occur During Term of

Patent

Product Made by Process Not Considered

As Such After (i) materially changed by subsequent process, or (ii) becomes trivial and nonessential component of another product

September 2000 43

271 USC (f)(1)

Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States , shall be liable as an infringer.

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