The US Supreme Court issued a decision today that expands the potential liability for patent infringement. Justice Samuel Alito spoke for the Court:
After respondent SEB invented an innovative deep fryer, obtained a U. S. patent for its design, and began selling its fryer in this country, Sunbeam Products, Inc., asked petitioner Pentalpha Enterprises, Ltd., a Hong Kong home appliance maker and wholly owned subsidiary of petitioner Global-Tech Appliances, Inc., to supply Sunbeam with deep fryers meeting certain specifications. Pentalpha purchased an SEB fryer that was made for sale in a foreign market and thus lacked U. S. patent markings, copied all but the fryer’s cosmetic features, and retained an attorney to conduct a right-to-use study without telling him it had copied directly from SEB’s design. Failing to locate SEB’s patent, the attorney issued an opinion letter stating that Pentalpha’s deep fryer did not infringe any of the patents that he had found. Pentalpha then started selling its fryers to Sunbeam, which resold them in this country under its own trademarks at a price that undercut SEB’s.
SEB then sued Sunbeam for patent infringement. Though Sun beam notified Pentalpha of the lawsuit, Pentalpha went on to sell its fryers to other companies, which resold them in the U. S. market under their respective trademarks. After settling the Sunbeam lawsuit, SEB sued Pentalpha, asserting, as relevant here, that it had contra- vened 35 U. S. C. §271(b) by actively inducing Sunbeam and the other purchasers of Pentalpha fryers to sell or offer to sell them in violation of SEB’s patent rights. The jury found for SEB on the induced infringement theory, and the District Court entered judgment for SEB. Affirming, the Federal Circuit stated that induced infringement under §271(b) requires a showing that the alleged in- fringer knew or should have known that his actions would induce actual infringements; declared that this showing includes proof that the alleged infringer knew of the patent; held that, although there was no direct evidence that Pentalpha knew of SEB’s patent before it re ceived notice of the Sunbeam suit, there was adequate proof that it deliberately disregarded a known risk that SEB had a protective patent; and said that such disregard is not different from, but a form of, actual knowledge.
The Supreme Court, by an 8-1 vote, affirmed the Federal Circuit’s decision and the original jury verdict. Of note, the Supreme Court said that while Pentalpha’s “[d]eliberate indifference to a known risk that a patent exists does not satisfy the knowledge required” by federal patent law, the jury was right to find the company liable for infringement “under the doctrine of willful blindness”:
The doctrine of willful blindness is well established in criminal law. Many criminal statutes require proof that a defendant acted knowingly or willfully, and courts applying the doctrine have held that defendants cannot escape the reach of these statutes by deliberately shielding themselves from clear evidence of critical facts that are strongly suggested by the circumstances. The traditional rationale for the doctrine is that defendants who behave in this manner are just as culpable as those who have actual knowledge.
Justice Anthony Kennedy, the lone dissenter, said the majority was simply inventing a new way to allow patent-holders to sue for infringement based on what a court determines an alleged infringer should have known — a standard Kennedy suggests could now be applied to all federal criminal cases, not merely patent disputes:
The Court is correct, in my view, to conclude that 35 U. S. C. §271(b) must be read in tandem with §271(c), and therefore that to induce infringement a defendant must know “the induced acts constitute patent infringement.”
Yet the Court does more. Having interpreted the statute to require a showing of knowledge, the Court holds that willful blindness will suffice. This is a mistaken step. Willful blindness is not knowledge; and judges should not broaden a legislative proscription by analogy. In my respectful submission, the Court is incorrect in the definition it now adopts; but even on its own terms the Court should remand to the Court of Appeals to consider in the first instance whether there is sufficient evidence of knowledge to support the jury’s finding of inducement.
The Court invokes willful blindness to bring those who lack knowledge within §271(b)’s prohibition. The Court’s definition of willful blindness reveals this basic purpose. One can believe that there is a “high probability” that acts might infringe a patent but nonetheless conclude they do not infringe. The alleged inducer who believes a device is noninfringing cannot be said to know otherwise.
The Court justifies its substitution of willful blindness for the statutory knowledge requirement in two ways, neither of which is convincing.
First, the Court appeals to moral theory by citing the “traditional rationale” that willfully blind defendants “are just as culpable as those who have actual knowledge.”
But the moral question is a difficult one. Is it true that the lawyer who knowingly suborns perjury is no more culpable than the lawyer who avoids learning that his client, a criminal defendant, lies when he testifies that he was not the shooter? The answer is not obvious. Perhaps the culpability of willful blindness depends on a person’s reasons for remaining blind. Or perhaps only the person’s justification for his conduct is relevant. This is a question of morality and of policy best left to the political branches. Even if one were to accept the substitution of equally blameworthy mental states in criminal cases in light of the retributive purposes of the criminal law, those purposes have no force in the domain of patent law that controls in this case. The Constitution confirms that the purpose of the patent law is a utilitarian one, to “promote the Progress of Science and useful Arts.”
Second, the Court appeals to precedent, noting that a “similar concept” to willful blindness appears in this Court’s cases as early as 1899. But this Court has never before held that willful blindness can substitute for a statutory requirement of knowledge. Spurr v. United States, 174 U. S. 728, 735 (1899), explained that “evil design may be presumed if the [bank] officer purposefully keeps himself in ignorance of whether the drawer has money in the bank or not, or is grossly indifferent to his duty in respect to the ascertainment of that fact.” The question in Spurr was whether the defendant’s admitted violation was willful, and with this sentence the Court simply explained that wrongful intent may be inferred from the circumstances. It did not suggest that blindness can substitute for knowledge. Neither did Turner v. United States, 396 U. S. 398 (1970), or Leary v. United States, 395 U. S. 6 (1969). As the Court here explains, both cases held only that certain statutory presumptions of knowledge were consistent with due process. And although most Courts of Appeals have embraced willful blindness, counting courts in a circuit split is not this Court’s usual method for deciding important ques- tions of law.
The Court appears to endorse the willful blindness doctrine here for all federal criminal cases involving knowledge. It does so in a civil case where it has received no briefing or argument from the criminal defense bar, which might have provided important counsel on this difficult issue.
So if Justice Kennedy is correct, then patent law not only undermines free competition and property rights — it is now a weapon to eradicate constitutional due process in non-patent cases. Just lovely.
{ 24 comments }
I’m confused. Why was this ruling even needed? I thought independent invention wasn’t a defense against infringement lawsuits?
Or was this yet another needless power grab by the judiciary?
I resent the fact that they are called “justices”. Instead, we should call them judges, because that’s what they are, nothing but human, interested and fallible judges.
To call them justice is like to call the pope holiness. The pope is a man, a sinful one at that, so no, those judges are not anymore “justices” than you and I or the pope is any more holy than you and I.
To call those judges “justices” is newspeak.
Whether or not you intentionally infringe will impact your penalties. If you are caught infringing a patent your only liable for 100% of damages.. if you infringe on purpose you liable for 300% of damages. Now I guess if a Judge feels that that you should of known then that is the same as knowing.
but the real bug-a-boo is:
Basically the Supreme court supports undermining the whole “Innocent until proven guilty” thing and it lowers the burden of proof for civil cases in general.
“Basically the Supreme court supports undermining the whole ‘Innocent until proven guilty’ thing and it lowers the burden of proof for civil cases in general.”
This thought is so muddled it’s hard even to begin explaining why it is wrong. Perhaps the quickest response is just to note that merely because the dissenting justice says so doesn’t mean it’s true.
More specifically, precisely what do you mean by “the whole ‘Innocent until proven guilty’ thing”? Willful blindness is a doctrine from the criminal law. An example of how this works is this: If the law prohibits “knowingly” transporting heroin, we don’t throw up our hands and admit defeat because someone says “I did not absolutely positively, beyond any doubt at all know I was transporting heroin.” Rather, the prosecutor puts on evidence that the guy must have known (or had reason to suspect) what was in the bag and willfully — get it? — avoided learning the truth. And then the jury decides whether the prosecution has proven its case beyond a reasonable doubt. This doctrine is needed to catch up the “clever” crook who intentionally avoids learning exactly what crime he’s participating in.
At bottom, the Court in this case has said that if the jury has evidence that someone willfully blinds himself to the truth about whether the technology he has copied is patented, the jury can decide that the infringement was willful rather than innocent. (Not that it is required to so find.)
The more substantial criticism is that the Court simply decided the ultimate issue without remanding for further factual determinations or analysis in light of the ruling. But that is merely a complaint about the justness of the outcome of this particular appeal, not about the rule. Because I’ve not seen the whole factual record, I’ll withhold judgment about whether the disposition was appropriate.
Good explanation, Doesn’t apply to the State Apparatus and the Plausible Deniability thing though. Oh well…
Now, regarding patents [esp. software patents]: you can suspect that someone, somewhere has a receipt with the USPTO that covers parts or all of your latest offering with about 80% probability. But you decide not to embark on a potentially fruitless search through patent files to discover the persons unknown to whom you might have to pay royalties. Indeed, if you do not actually find them or decide to disregard an applicable patent, you might well have to pay triple damages if it comes to blows with a patent holder (submarine or otherwise).
Now, even the decision to not embark on said search might well heighten the damages.
What do?
@ El Tonno May 31, 2011 at 4:39 pm
I admire how you attempt to twist the facts to meet your conclusion.
In your example, someone makes a judgment to run the risk of inadvertent infringement, in which case, the penalty is likely to equal what you would have otherwise paid. This approach assumes that the risk is small, and assumes away the possibility that the inventor would actually benefit from examining prior art.
In this case, (although like Karl, I know nothing more about the facts than are conveyed in the quoted opinion) it appears that the infringing companies deliberately tried to create a deception concerning their actual knowledge of the existence of a patent when then intended to infringe upon. That is quite different, and amounts to a fraud in order to avoid the appearance of wrongdoing.
I think you would agree that covering your eyes is not the same thing as not knowing what you would see if your eyes were open.
I think you are simply arguing to your conclusion that anything that supports the patent system is inherently bad, so anyone who is harmed by it is trotted out to support your position. Yet you completely ignore the fact that there is another side to the injury. The inventor’s interests here are also a factor.
If you assume that the perpetrator’s rights are always supreme, you would never need a court to define “justice”. If you assume that the one who avails himself of the patent system is always in the wrong, you can solve every case with ease.
As soon as you give up your obvious bias, the complexity of the real world sets in, where facts matter and intrude upon your idealized sense of justice, wherein one side is always right and the other always wrong.
Yet you would never offer a similar holding in an economic context, where the seller is always right or wrong. Although we might all agree that paying $4.00 for a loaf of bread is about right and $400 is probably wrong, we allow that the subjective judgment of value rules in the individual case. Each has their own calculation of the facts.
Yet you cannot seem to grant that facts can change the legal outcome based on an identical legal doctrine. You seem to want to insist that any decision in favor of a patent holder must be inherently wrong, regardless of the facts.
Isn’t it weird that the “crime” is about what’s in your head as opposed to what you did ?
Also, that’s aside the fact that from a libertarian view point, transporting merchandise cannot be construed as a crime. Drug selling, buying, consumption and transportation are victimless behaviors and cannot be construed as crimes according to libertarianism.
And the judges would debate the “guilt” based on what was in the mind of the suspect. In that case, it would be a crime to imagine transporting heroin even if you did not do it.
This whole thought crimes and intent crimes have got to be removed from the criminal code. Only overt actions that create victims should be prosecuted.
Yes, the libertarians do think that way. And that sort of willful blindness to reality is one of the reasons that they get about 5% of the vote and no more. If you think the heroin trade has no victims, you have not been paying attention. Look into the experience of the Netherlands if you want something like the results of an experiment with permissiveness toward heroin. No ivory tower academic debates needed; you can actually ask what happens in the real world, where some of us live and work.
Your attack on “thought” crimes is a pure straw man. First, the judges don’t debate guilt. A defendant’s intent (if relevant to the crime charged) is a fact to be found by the jury (or the trial judge in a bench trial). Appellate courts debate whether the evidence was sufficient to support the finding, not what they would have found if they had been the fact finder.
Second, if you think you can eliminate intent crimes, are you comfortable with the idea that premeditated murder and negligent homicide are going to be treated as the same thing? And do we just do way with self-defense? If I kill someone who is attacking me or someone else, that’s just a homicide like any other because YOU are too squeamish to allow someone to ask “what was he thinking when he blasted that guy?”
You don’t like the collectivist dictators, but you trust yourself enough to make all sorts of sweeping judgments. I don’t think F.A.v.H. would approve.
Forgive me if I’m not too excited about this supposed impending calamity for all free people: The caveat here is “if Justice Kennedy is correct.” Dissenting opinions predicting that the Court’s decision will bring about the end of civilization as we know it are Legion. With all due respect, a trained chimp could probably mine the day’s dissenting opinions for predictions of doom, add a few sentences that provide no analysis, and post it to the Web. Perhaps we should wait for someone actually to make a serious, thought-out argument about the consequences of this decision, before we conclude that the sky has fallen.
Karl,
What a refreshing take you have articulated.
I find that many who comment here hold views similar to “market failure” ideas; that because the market fails left unattended, interventions by the “regulators” are needed. Ironically, they would never agree with that sentiment in an economic context, but do so often in the legal context.
You have articulated clearly the doctrine of “willful blindness” as it applies to a situation where most would agree that without it, justice would not be served. Yet in other circumstances, say where IP is involved, such a “fuzzy” doctrine cannot be left to the discretion of the courtroom process, where it is most likely to be abused in the service of “statist abuse of liberty”.
As you say, the sky is most often falling when fuzzy discretion is allowed to operate in the service of the ideal of justice. The bias seems to be in favor of only the brightest of lines in order to remove the possibility of judicial abuse of an otherwise free people.
Whereas with anything other than the brightest lines of distinction, wrong outcomes are possible, with only bright-line doctrines to work with, wrong outcomes are inevitable. Just as we must trust the “invisible hand” of the market to allocate resources, even though perfection is not achieved in every case, justice is an approximate thing, and is best left to the legal principles that have developed to address prior wrong outcomes, and in the hands of people who can evaluate facts and discriminate between difficult distinctions of right and wrong.
As with free market mechanisms, freedom to apply judgment and discretion within carefully evolved legal doctrines are most likely to produce approximately just outcomes. Anything else is the legal equivalent of the Road to Serfdom.
We have a lovely little thing called economics which details precisely how markets function to allocate resources and how non-market structures, like government courts, cause problems. Perhaps you’ve heard of it?
@Seattle May 31, 2011 at 5:22 pm
Sarcasm aside, yes I believe I have. As apparently you have missed my point, let me be more direct.
While many here seem to be able to understand and trust a system that depends upon individual calculations of subjective value in the economic context, few grant the same legitimacy to individual judgment of justice in a legal context. While trust in the invisible hand of economics seems fine to most, trust in the invisible hand of justice does not seem as generous, yet in many ways, they are analogous.
Many who oppose IP in general, rely on an argument which complains of arbitrariness in the legal doctrines, yet few see an equivalent problem with the arbitrariness of human action in the economic context.
I find that ironic.
The differences is that in an economic context you make decisions for yourself. In a legal context decisions of judges are forced upon the parties arbitrating.
If courts were private for arbitration to occur both parties would have had past agreement to accept the outcome, and if there was a sense of unfairness with regularity a private court could not remain in business. The values of that court would be kept in check by the values of other consumers.
If judges rulings can be compared to the “invisible hand” of the market, then dictators deserve the same trust as individuals making decisions for themselves.
Uh, yeah. But I don’t enter into a consensual agreement with some hoodlum who is stealing my patent. He just steals it and I have to chase after him. I may well agree to arbitrate with my licensees, and that decision is a bargained-for term in an agreement that I will pay for if I want it. But why would a scoundrel in some other country agree to my private arbitration after he’s stolen my patent?
Let me try to make you understand: court systems are there to impose consequences on UNWILLING participants. The alternative to that is private force. I know how to operate things like machine guns, grenade launchers, the like. (Thanks, U.S. Army. I enjoyed the experience.) But I’m not sanguine about living in a world where I have to use force to punish those who cross me, or use a major show of force to deter people from crossing me. Anyone interested in vacationing in Mexico? It sounds lovely this time of year. They’ve got lots of folks who don’t accept the idea of some government fool telling them what to do.
Platitudes sound pretty effective in the abstract. But I live in the real world, where there are lots and lots of scoundrels.
They don’t have to. The corrupt government and court system works hand in hand with the drug cartels to keep their profits high and competition low. The cartels would not exist without the court system, nor the enforcement from the state.
It seem to me that your the one who is being naive here.
It’s funny that Wildberry would leave the market to the invisible hand because no central planner can calculate and allocate perfectly the resources according to millions of minds and individual free wills.
Yet, when it comes to justice, he would then place central justice planners because when it comes to justice, everything must be calculate and allocated by the superior intellect of central planners.
What a twisting of logic, because the market requires the invisible hand, let’s trust justice in visible central planning hands.
Wildberry, you need to argue better than that, your argument here is a contradiction. So which is it, must everything be planned or left to self ?
I’ve got news for you, leaving justice in the hands of a few judges at the supreme court is actually the opposite of the invisible hand.
And what exactly is your alternative to a hierarchical court system? Chaos? Law of the Claw? I don’t think anyone fairs better under those venerable systems. Justice Jackson many years ago cautioned that the justices “are not final because we are infallible, we are infallible because we are final.” (He was arguing against federal courts having collateral review of state criminal cases.) I am not very happy about most of the Supreme Court’s decisions for a variety of reasons. But to imagine that we can just do without courts suggests that you have allowed academic arguments to trump things like the reality of living in a society in which conflicts arise. Some people are scoundrels and always will be. They will steal your design, steal your car, or anything else not nailed down. You have no consensual relationship with scoundrels other than living on the same planet. They exercise their WILL against you, and you can either roll over and take it (invite more scoundrels to swoop in) or have use some legal mechanism against them. If you think you’d fair better without a court system, ask yourself what you would do if I decided to steal all of your property. You’d better get a lot of friends with guns, because I’m a pretty good shot, and I can assemble a lot of scoundrels on short notice. If my choice is a hierarchical court system to deal with scoundrels or to revert to making myself a literal serf of a medieval lord (aka toughest thug around), I’ll take the court system.
The Cornballer strikes again!
@ Matthew Swaringen May 31, 2011 at 6:25 pm
I agree there are differences; analogies can only stretch so far, but I still think it’s a valid point.
I was referring to juries being able to assess facts to make the necessary distinctions needed to reach a just outcome. That is the invisible hand, not the judge. This is why we can relate to the example Karl gave regarding “willful blindness” in the criminal context.
I do not think arbitration is the only way to arrive at justice; in fact an arbitrator acts as both judge and jury and the decisions are un-appealable, so the likelihood of both parties being unhappy is also high, maybe higher. Arbitration is mostly sought to control the costs of trial.
I think you minimize the human factor here. No justice system can long persist without general support of the people. That support is also a factor in keeping the conduct of the courts in check. In the jury system, it is jurors who sit in judgment, not the judge.
In order for this case to reach the supreme court, it had to come up through a lower court, which meant a trial, which meant facts were presented. The interpretation of facts and application of legal principles of right and wrong are within the grasp of the average citizen, which is why juries are capable of hearing complex cases.
By prior agreement the parties may choose to allow the judge to be the finder of fact as well as the arbiter of law. That puts him in the same position as an arbitrator. Why do you assume that he is biased toward one party or another, or has an agenda apart from the parties?
Your last comment does not make sense to me. How does the dictator analogy fit?
I am saying the opposite of what I think you are saying; the invisible hand of a dictator is the opposite of the individual traders. It is precisely because in a free market, pricing is set by free traders who reach subjective calculation of value that the hand is “invisible”. Likewise, it is the judgment of individual jurors that calculates the truth and the just outcome.
I am saying that the mechanisms are similar; that individual jurors allocate justice based on subjective judgments of “value”.
It is one thing to define a doctrine, as Karl has adequately done. It is another to say that a particular fact pattern applied to that doctrine is “just”. Our legal system depends on a fundamental trust that when given the facts, people can distinguish right from wrong. Some people have a basic trust in that idea, similar to the trust we have in a free market.
Subjective judgments of “value” in economics have no “yardstick” imposed by “authority” and it all works out well enough, mostly. The “yardstick” is created spontaneously and continually morphs over time.
In formal law a juror’s subjective judgment of “value” is constrained by a very authoritative yardstick. This is where the anarchist sees the problem, a codified rigidity that serves some well and others not so much. Hidebound. “Law” can be created spontaneously and morph over time by the same mechanism, namely anarchy.
It is not the end result, which may be virtually identical (or not), that should be the measure, rather the process used to determine what “justice” and “morality” is wanted by the people in the present.
Previous generations have all tried to leave their “marks” on our morality, but the reality is that we keep only what we want and discard the trash. Our descendants will do the same, so let’s make it a bit less of a hassle for them.
It is unfortunate that men have created not only said law, but also a doctrine that man is to serve said laws, and forget that laws were created to serve man in the first place.
It’s nice to see someone noting the distinction between a substantive outcome and the process. Neither trial by ordeal nor trial by jury guarantees a “correct” outcome, however you might want to define “correct.” I can agree with Hayek’s condemnation of an executive agency making “case-by-case” decisions, but I can’t avoid court’s making case-by-case decisions: (With some exceptions) you get one bundle of disputed facts at a time. Since flawed human beings are involved in every aspect of this process, the best we can hope for, it seems to me, is a pre-existing system of rules, determined in accord with the consent of the governed. The alternative to that is some dictator imposing his WILL, whether it be the oh-so-clever leftist graduate of Yale law school or the oh-so-clever libertarian graduate of the University of Chicago.
I love freedom — real freedom, not correct substantive results. So I’m tolerant of the failures of a system that is run by flawed humans.
The Supreme Court of Canada just made a ruling that makes nearly all adult Canadians serial sex offenders. They ruled that a person cannot give consent to any sex act that will occur when they are unconscious, either before or after the fact. This might not seem so bad except that the detailed ruling explicitly includes acts like kissing/cuddling up to a sleeping spouse.
According to this precedent if my wife asks me to kiss her before I leave for work, wakes up as I am kissing her and kisses me back, then says “thanks for the kiss”, I have officially committed sexual assault. At any time she could have me arrested and charged with a crime… and the arrest would stick even if she admits under oath she made it up to win a custody battle (this was actually what happened in the precedent setting case).
Every sexually active Canadian woke up a sex offender this past Friday… as if the government needs another excuse to throw innocent people in jail.
p.s. If you don’t believe me read about it here.
How utterly terrifying. As soon as your wife calls the police to have you arrested for sexual assault after you kiss her, you let us know. Then I’ll be sure to get my crack team of freedom fighter to battle for you. In the meantime, I’m going to look for some free state to live in, where a man’s right to insert a dildo into his unconscious girlfriend’s anus is respected, not trampled on.
If you live at a high enough level of abstraction, all cases are easy. Not so in the real world. Whether some particular sexual activity is consensual when two people practice erotic asphyxiation can be a difficult question: if I give you general consent to have sex with me while I’m unconscious, is that a blank check allowing you to do anything you want to me, or only the usual sorts of things we’ve always done? I’m not yet weeping for the demise of freedom in Canada just because I might not have reached the same decision on this issue as the Canadian Supreme Court.
Let me give you a slightly different hypothetical to your “morning kiss”: Let’s say you and your wife are out drinking heavily. When you get home, she says “let’s have sex,” but passes out before you finish. You then think, I’ve always wanted to put a dildo in her anus, and proceed to do so, injuring her. She complains to the police and you’re charged with sexual assault. Outrageous miscarriage of justice? If you think so, imagine reversing the roles and you’re the one with the unwanted insertion because your wife decides she’s feeling a bit perverse after you’ve passed out. Now how do you feel about it?
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