Finding of induced infringement reversed: insufficient evidence of direct infringementSeptember 12, 2007

Today, the Federal Circuit held that hypothetical instances of direct infringement are not enough to establish that a party induced direct infringement of a patent. Instead, there must be evidence of instances of actual infringement in order to establish infringement was induced if there are both infringing and non-infringing ways to operate a device. Because there was no such evidence in this case, the district court's finding of infringement was reversed, and the district court's award of damages and finding that the case was exceptional (doubling the damages and awarding attorney fees), were vacated.More detail of Acco Brands, Inc. v. ABA Locks Mfr. Co. after the jump. Acco brought an infringement suit against ABA Locks and Belkin alleging that the defendants had induced infringement of a patent on a locking system to secure equipment like personal computers. Specifically, Acco claimed that ABA and Belkin manufactured a locking system which would infringe the patent when their customers utilized the locking system. Before it rendered its decision, the jury was presented with testimony that Belkin's key locking system could be operated in two ways, one that would infringe Acco's patent and one that would not. The noninfringing method had been given as instructions when Belkin sold its locking system to its customers. Nevertheless, the jury found that the defendants had willfully induced infringement. The district court then granted enhanced damages to Acco and denied the defendant's motion for judgment as a matter of law that the patent was unenforceable and invalid. Belkin appealed these findings. The Federal Circuit, however, reversed the jury's verdict and the court's grant of enhanced damages and attorney fees to Acco. In order to prove a party induced infringement, there must be evidence of (1) direct infringement and (2) possession of "specific intent to encourage another's infringement." Direct infringement may be shown by either evidence of specific instances of direct infringement or evidence that the accused device necessarily infringed the patent. Here, the accused device did not necessarily infringe because there was a noninfringing way to utilize the locking system, which Belkin had instructed its customers to use. Because of this, Acco had to provide evidence of actual users using the infringing method (such as via testimony or surveys of such users). Testimony by Acco's expert that the most natural and intuitive way to use the Belkin lock would be the infringing way were not enough to establish that someone actually did use the Belkin lock in the infringing manner.As a result, the finding of inducing infringement was reversed, and the associated awards of damages and attorney fees were vacated.To read the full decision in Acco Brands, Inc. v. ABA Locks Mfr. Co., click here.

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