In Global-Tech Appliances, Inc. v. SEB S. A., 563 U.S. ___, (2011), the Supreme Court clarified an ambiguity in 35 U.S.C. 271(b) regarding the intent needed to impose liability for induced infringement. Section 271(b) states "[w]hoever actively induces infringement of a patent shall be liable as an infringer.” Departing from a standard applied by the Federal Circuit, the Supreme Court held in its 8-1 decision that "willful blindness" is sufficient.
SEB obtained U.S. Pat. 4,993,312 for a deep fryer with a “cool touch” outer housing. Sunbeam asked Pentalpha (a Hong Kong subsidiary of Global-Tech) to supply deep fryers. Pentalpha purchased a SEB fryer made for the foreign market lacking U.S. patent markings and copied all but the fryer's cosmetic features. Pentalpha acquired a right-to-use study without telling its attorney it had copied directly from SEB. The study failed to locate SEB's patent and found no infringement. Pentalpha sold fryers to Sunbeam, which resold them in the U.S. SEB sued Sunbeam and Sunbeam notified Pentalpha of the lawsuit, but Pentalpha continued selling fryers to other U.S. resellers. SEB subsequently settled with Sunbeam and sued Pentalpha and its other U.S. resellers in 1999 asserting direct 271(a) and actively induced 271(b) infringement.
In 2006, a jury found willful infringement and inducement by Pentalpha, which appealed on the grounds it had no actual knowledge of SEB's patent until the Sunbeam litigation in 1998. The Fed. Cir. affirmed, acknowledging that a showing of “specific intent to encourage another’s infringement” was required, but that such “specific intent” includes “deliberate indifference” shown by a subjective determination that they knew of and disregarded an overt risk that an element of the offense existed.
On appeal, the Supreme Court held that “deliberate indifference” to a known risk that a patent exists does not satisfy the knowledge required by 271(b). However, the Fed. Cir. was affirmed because the evidence was plainly sufficient to support a finding of Pentalpha's knowledge under the doctrine of “willful blindness.”
“Willful blindness” is well established in criminal law such that defendants cannot escape the reach of “knowing” or “willful” statutes by deliberately shielding themselves from clear evidence of critical facts that are strongly suggested by the circumstances. All federal courts of appeal but one require that: 1) the defendant must subjectively believe there is a high probability that a fact exists, and 2) the defendant must take deliberate actions to avoid learning of that fact. In contrast, the Federal Circuit “deliberate indifference” standard permits a finding of knowledge when there is merely a "known risk" that the induced acts are infringing; it does not require active efforts by an inducer to avoid knowing about the infringing nature of the activities. With all facts taken together, Pentalpha subjectively believed there was a high probability that SEB's fryer was patented and took deliberate steps to avoid knowing that fact. Consequently, the requisite intent existed for induced infringement.