Induce Infringement / Without knowledge of Patent / Don't Turn A Blind Eye
SEB S.A., v. Montgomery Ward & Co., Inc., [2009-1099, -1108, -1119] (February 5, 2010) [RADER, Bryson, Linn] The Federal Circuit affirmed the holding that U.S. Patent No. 4,995,312 was valid, and infringed, and that defendant had induced infringement of the patent.
DISCUSSION:
Claim Construction: U.S. Patent No. 4,995,312 covers a deep fryer having a heated pan, and a plastic skirt that is “completely free with respect to the pan”. The limitation “completely free with respect to the pan” was construed to mean “there are no thermal bridges between the skirt and the pan.” The patented device had screws fixing the skirt, but these were thermally isolated and thus were not thermal bridges. The Federal Circuit perceived a slight internal inconsistency with the district court’s claim construction of “completely free” in the phrase “said skirt (3) being completely free with respect to the pan (1) with the exception of a ring (5)” because if “completely free” merely meant “no thermal bridges between the skirt and the pan,” the claim would not need to exclude expressly the ring from the completely free limitation with the fact that there was an insulting ring between the skirt and the pan. Despite the inconsistency, to the Federal Circuit the district court’s construction of “completely free” rings true. The Federal Circuit, applying the Canon that “Differences among claims can . . . be a useful guide in understanding the meaning of particular claim terms”, noted that if “completely free” actually meant “completely free” then claim 8, which calls for a rod, would be excluded. Furthermore, applying the Canon that “[A] construction that would not read on the preferred embodiment would rarely if ever be correct and would require highly persuasive evidentiary support.” the Federal Circuit said if “completely free” meant “completely free” then the claim would not cover the only embodiment. The Federal Circuit put great stock in the fact that the specification repeatedly highlights the inventiveness of eliminating thermal bridges to prevent heat transfer to the plastic skirt, and was apparently untroubled by the fact that applicant forsook this language in favor of “completely free”. The patent prosecutors (from the big city of Arlington, Virginia, got it right, while defendant’s counsel “from the middle of nowhere” (see below) doesn’t get the benefit of the doubt. The Federal Circuit said that read in light of the entire specification and with an eye to the preferred embodiment, then, the term “completely free” means “practically or functionally free.”
Because of the jury instructions, the Federal Circuit had to conclude that there was both direct infringement and inducement in order to affirm.
Actual Infringement by f.o.b. sales abroad:
As to direct infringement, defendant argued two points: First, an offer in the United States to sell goods outside of the United States does not violate the “offer to sell” provision of § 271(a). Second, in determining if a sale occurred in the United States, it was erroneous to consider “where the products were shipped from and where the products were shipped to”. The Federal Circuit observed that it had yet to define the full territorial scope of the “offers to sell” offense in § 271(a), but did point out that in Rotec Indus., Inc. v. Mitsubishi Corp., Judge Newman, concurring said that “[A]n offer to sell a device or system whose actual sale can not infringe a United States patent is not an infringing act under § 271.” The Federal Circuit said that the sales did not so clearly occur overseas that the district court’s failure to include such a limitation in its jury instructions affected the integrity of the trial. The Federal Circuit said that the only evidence of where sales occurred was that the products were delivered f.o.b. Hong Kong or mainland China. However, the Federal Circuit said that it has “rejected the notion that simply because goods were shipped f.o.b., the location of the ‘sale’ for the purposes of § 271 must be the location from which the goods were shipped.” Citing Lightcubes. Thus the district court’s instruction that the jury could consider “where the products were shipped from and where the products were shipped to” was not error.
Inducement by Turning A Blind Eye:
The district court found that there is no evidence that defendant was aware of the ’312 patent before April 9, 1998, but still found evidence to support plaintiff’s theory of inducement. This “evidence” included the fact that despite the fact that there are “a zillion patent attorneys in New York City” defendant went to a “guy in the middle of nowhere” to clear the product. The district court found that this was enough for the jury to infer that defendant understood that he was likely violating a patent. Implicit in this finding are: 1. Binghamton New Your is in the middle of no where, and 2. The zillionth best patent attorney in New York City, is better than any patent attorney in Binghamton.
Defendant argued that it could not be held liable for inducing a patent that it did not actually know existed, citing DSU Med Corp. v. JMS Co., which said that “The requirement that the alleged infringer knew or should have known his actions would induce actual infringement necessarily includes the requirement that he or she knew of the patent.”. However Federal Circuit said that DSU Medical did not set out the metes and bounds of the knowledge-of-the-patent requirement. In the Federal Circuit’s words, DSU Medical “decided the target of the knowledge, not the nature of that knowledge”.
The Federal Circuit said that inducement requires a showing of “specific intent to encourage another’s infringement” but that specific intent is not so narrow as to allow an accused wrongdoer to actively disregard a known risk that an element of the offense exists. The Federal Circuit said that the standard of deliberate indifference of a known risk is not different from actual knowledge, but is a form of actual knowledge, and a party’s knowledge of a disputed fact may also be proved through evidence that he consciously avoided knowledge of what would otherwise have been obvious to him.
The Federal Circuit held that a claim for inducement is viable even where the patentee has not produced direct evidence that the accused infringer actually knew of the patent-in-suit, and that this was such an instance. The Federal Circuit noted the following evidence that defendant deliberately disregarded a known risk that there was a patent:
1. Defendant purchased a plaintiff product in Hong Kong and copied all but the cosmetics.
2. While defendant hired an attorney to conduct a right-to-use study, it did not tell him that the product had been copied (noting that such failure would be highly suggestive of deliberate indifference in most circumstances).
3. Defendant’s did not point to any exculpatory evidence -- the lack of patent marking was rejected because defendant did not explain why it thought a product marketed in Hong Kong would have the U.S. patent number.
The Federal Circuit indicated that it was not setting the outer limit of what is sufficient constructive knowledge to constitute actual knowledge, but hinted that ignoring patent numbers marked on a product might be enough.
Labels: Canons, Federal Circuit
posted by Bryan @ 2:46 PM
