Federal Circuit considers intent required for inducing infringement en bancDecember 14, 2006

The Federal Circuit resolved a perceived conflict in its case law regarding the necessary level of intent required for a defendant to be found liable for inducing infringement of a patent. The court considered one subsection of DSU Medical Corp. v. JMS Co. en banc to resolve the conflict. The court held that to prove the intent necessary for liability for inducing infringement, there must be “evidence of culpable conduct, directed to encouraging another’s infringement, not merely that the inducer had knowledge of the direct infringer’s activities.” More details of the case after the jump.The case revolved around two patents directed toward prevention of needle-stick injuries. The inventions provide needle-guards for standard winged-needle sets used for injections. The patent claims required a fully-assembled structure, that is, the guard with the needle assembled within. The allegedly infringing product was sold without a needle, and a needle was inserted later, by either the health care provider or the distributor. JMS purchased the allegedly infringing needle guards from another company, ITL, in Singapore and Malaysia, and generally closed the guards around needles before distributing them to customers. ITL escaped liability for both contributory infringement because it did not engage in any acts within the United States, as there was no evidence that it sold any guards to JMS in the United States, a necessary requirement for contributory infringement. On the issue of inducing infringement, the court first addressed what it perceived as a conflict in its prior precedent on the necessary intent for inducement. After discussing the applicable case law, the court noted that in order to establish liability for inducing infringement, the “patent holder must prove that once the defendants knew of the patent, they actively and knowingly aided and abetted another’s direct infringement.” It is not enough to know about the infringing acts; instead there must be “specific intent and action to induce infringement.” Additionally, the court noted that the Supreme Court had cited this standard for inducement liability with approval in Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., a copyright case dealing with inducing infringement liability under copyright law. Based on the Supreme Court’s application of the law of inducement of patent infringement to copyrights, the Federal Circuit held that, to the extent a conflict existed, the inducement law cited by the Supreme Court should control. As a result, the court summarized the requirement by holding that “inducement requires evidence of culpable conduct, directed to encouraging another’s infringement, not merely that the inducer had knowledge of the direct infringer’s activities. Another noteworthy holding is that the court stated that while an infringement may have a foreseeable, and therefore compensable, effect on future contracts, such a situation cannot occur when the future contract is for a non-infringing substitute for the patented product. To read the full decision, click here.

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