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'Induced' patent violation rule upheld

May 31, 2011 at 12:15 PM   |   Comments

WASHINGTON, May 31 (UPI) -- The U.S. Supreme Court ruled 8-1 Tuesday that "induced" patent infringement -- getting someone else to violate a patent -- requires knowledge of the violation.

The case involves a deep fryer.

SEB S.A. invented an innovative deep fryer, and began selling it in the United States. Court records say Sunbeam Produces asked a subsidiary of Global-Teach Appliances, Hong Kong-based Pentalpha Enterprises, to supply Sunbeam with deep fryers meeting certain innovative specifications.

Pentalpha bought an SEB fryer made for sale in foreign markets, one without U.S. patent markings, and copied the fryer's innovative features, court records say.

Pentalpha then started selling the innovative fryers to Sunbeam, which resold them in the United States at a price lower than what SEB was asking, court records say.

SEB then sued Sunbeam for patent infringement, but though Sunbeam notified Pentalpha of the suit, Pentalpha went on to selling its fryers to other companies, which resold them in the United States under their own trademarks.

After settling the Sunbeam suit, SEB sued Pentalpha, saying it had violated federal law by actively inducing Sunbeam and other purchasers of Pentalpha fryers to sell them in violation of SEB's patent rights.

A jury ruled for SEB, and the Federal Circuit Court of Appeals in Washington affirmed the jury's verdict.

The U.S. Supreme Court agreed in a majority opinion written by Justice Samual Alito.

The majority said induced infringement under federal law "requires knowledge that the induced acts constitute patent infringement," though the law's language is ambiguous.

"Deliberate indifference to a known risk that a patent exists does not satisfy the knowledge required by" the federal law, the majority said, but the appeals court's judgment "must be affirmed because the evidence in this case was plainly sufficient to support a finding of Pentalpha's knowledge under the doctrine of willful blindness" to the existence of the patent.

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