inducement

Issues

PATENT, INFRINGEMENT, INDUCEMENT, STATE OF MIND

Respondent SEB S.A. owns a patent for a deep fryer featuring an inexpensive, insulated plastic outer shell. In 1997, Petitioner Pentalpha Enterprises, LTD, a subsidiary of petitioner Global-Tech Appliances, Inc. (collectively, “Global-Tech”), developed and manufactured a deep fryer that copied features of SEB's deep fryer. On August 27, 1999, SEB sued Global-Tech for patent infringement in the United States District Court for the Southern District of New York. The jury found Global-Tech liable for direct and active inducement of patent infringement, and Global-Tech appealed to the Court of Appeals for the Federal Circuit. That court affirmed, holding that Global-Tech acted with deliberate indifference to the risk of infringing SEB's patent. Global-Tech appealed, arguing that the Federal Circuit applied the wrong standard for the mental-state element of actively inducing patent infringement under 35 U.S.C. § 271(b). Global-Tech asserts that the proper standard is “purposeful, culpable expression and conduct to encourage an infringement,” the standard the Supreme Court articulated in MGM Studios, Inc. v. Grokster, Ltd. On the other hand, SEB argues that a patent infringer does not need to have actual knowledge of a patent to be liable for actively inducing patent infringement. The Supreme Court’s decision will affect patent litigation, the extent and cost of patent searches, and market competition and innovation.

Questions as Framed for the Court by the Parties

Written by

Edited by

Additional Resources

Issues

Akamai Technologies, Inc. (“Akamai”) sued Limelight Networks, Inc. (“Limelight”) for allegedly infringing a patent for a method of delivering web content. Limelight had performed all but one step of the patented method, leaving its customers to perform the remaining step. The Federal Circuit held that Limelight’s conduct constituted infringement by inducement under 35 U.S.C. § 271(b). The Federal Circuit ruled that the combined conduct of multiple entities may constitute patent infringement where a party performs all but one step of a patented method and knowingly induces another party to perform the remaining step of the method. Akamai argues that the Federal Circuit’s new standard more comprehensively protects the rights of patent owners. However, Limelight counters that the standard too broadly expands the scope of patent infringement liability and could lead to more abusive patent litigation. Limelight argues that to be a violation of § 271(b), a single entity must directly infringe on a patent under § 271(a), and that no such violation is present here. On the other hand, Akamai argues that the Supreme Court should re-instate the jury’s verdict, which found that Limelight controlled a third party’s conduct sufficient to satisfy § 271(a). Additionally, Akamai argues that the Federal Circuit’s new rule is consistent with common law tort principles and with Supreme Court precedent.

Questions as Framed for the Court by the Parties

Written by

Edited by