The U.S. Court of Appeals for the Federal Circuit, in an en banc decision, clarified the required intent needed to induce infringement, explaining that mere knowledge of acts alleged to constitute infringement is not enough. The Court held that the mere knowledge that others may directly infringe does not amount to inducement. Rather, the inducer must have an affirmative and specific intent to cause another’s direct infringement. DSU Medical Corp. vs. JMS Co. Ltd., Case Nos. 04-1620, 05-1048, 1052 (Fed. Cir., Dec. 13, 2006) (Radar, J.) (en banc).
DSU sued JMS for patent infringement, inducement and contributory infringement of two patents generally directed to a needle guard. The needle guard could be operated in two modes: an open-shell configuration and a closed-shell configuration. JMS purchases a product from a third party, ITL, and generally closes the needle guard around a needle set before distributing them to customers. DSU alleged that JMS and ITL induced each other’s infringement. JMS was found to directly infringe, but ITL was found not liable for induced infringement or contributory infringement. The court’s en banc decision only applies to the intent element of induced infringement.
The jury was presented with evidence that ITL was informed in January 1997 that its needle guard infringed DSU’s patent. ITL, however, contacted an Australian patent attorney who concluded that the product did not infringe. JMS and ITL then also obtained letters from U.S. patent counsel that the product did not infringe DSU’s patents. Evidence was also presented that the owner of ITL had no intent to infringe. The Court noted that ITL did not believe that it infringed DSU’s patent and, therefore, ITL had no intent to infringe.
The trial court instructed the jury that "the defendants must have intended to cause the acts that constitute the direct infringement and must have known or should have known than [sic] its actions would cause the direct infringement." DSU challenged the jury instruction.
In upholding the jury instruction, the en banc panel noted that the alleged infringer must knowingly induce the infringement. "The plaintiff has the burden of showing the alleged infringer’s actions induced infringing acts and that he knew or should have known his actions would induce actual infringements," the Court ruled, citing Manville Sales. This includes the requirement that the alleged inducer knew of the patent at the time of the acts alleged. Moreover, the en banc panel noted that mere knowledge (by the alleged inducer) of the acts that constitute the direct infringement is insufficient. Rather, the inducer "must have an affirmative intent to cause direct infringement." The Court looked for support to the Supreme Court decision in the Grokster copyright infringement case, noting that "[i]nducement requires evidence of culpable conduct, directed to encouraging another’s infringement, not merely that the inducer had knowledge of the direct infringer’s activities."
Based on the above en banc holding, the panel concluded that having obtained an initial non-infringement letter from an Australian attorney and later a letter from U.S. attorney voicing a similar conclusion, as well as evidence that ITL did not intend to infringe, there was sufficient evidence for the jury to conclude that there was no culpable inducement to infringe.
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