Federal Circuit Equates Specific Intent with Deliberate Indifference for Inducement to Infringe a Patent

IN SEB S.A. and T-FAL Corporation v. Montgomery Ward et al., the Court of Appeals for the Federal Circuit (“CAFC”) considered the appeal of a host of issues concerning the infringement of US Patent 4,995,312 (“the ‘312 patent”) relating to a jury verdict and the district court’s post-trial rulings. The ‘312 covered deep fryers having a metal pan surrounded by an air cavity that sits within a plastic material housing that can be ordinary-grade plastic that does not have high heat resistance.

Pentalpha was one of three named defendants. The other two defendants, Montgomery Ward and Global-Tech Appliances were buying deep fryers from Pentalpha that were accused of infringing the ‘312 patent. In addition to questions of claim construction and infringement, the Court had to consider on appeal whether Pentalpha acted with sufficient intent to be liable for inducement to infringe the ‘312 patent by Montgomery Ward and Global-Tech Appliances.

The CAFC first cited its precedent that inducement requires a showing of “specific intent to encourage another’s infringement” Broadcom Corp. v. Qualcomm Inc., 543 F.3d 683, 699 (Fed. Cir. 2008) (quoting DSU Medical, 471 F.3d at 1306). But the CAFC then relied upon Crawford-EL v. Britton, 951 F.2d 1314, 1318 (D.C. Cir. 1991) for the proposition that “specific intent” in the civil context is not so narrow as to allow an accused wrongdoer to actively disregard a known risk that an element of the offense exists. And further, specific intent is equated to deliberate indifference.

Based on the facts of the case, the CAFC found that even though the SEB had not produced direct evidence that Pentalpha SEB acted with deliberate indifference based on the following:

It had purchased an SEB deep fryer in Hong Kong and copying all but the cosmetics.

It failed to inform its patent counsel that it copied the SEB deep fryer when it requested a freedom to operate search opinion.

Its Its president, John Sham, was well versed in the U.S. patent system and understood SEB to be cognizant of patent rights as well. Sham testified that he was the named inventor on 29 U.S. patents and that Pentalpha and SEB had an earlier business relationship that involved one of Pentalpha’s patented steamer products.

The CAFC also noted that the case did not “purport to establish the outer limits of the type of knowledge needed for inducement” A patentee may only need to show, as the Insituform case suggests, constructive knowledge with persuasive evidence of disregard for clear patent markings may be enough.