GLOBAL-TECH APPLIANCES, INC., ET AL. v. SEB S. A.
No. 10-6
Supreme Court of the United States
May 31, 2011
563 U.S. 754
Argued February 23, 2011
William Dunnegan argued the cause for petitioners. With him on the briefs was Laura Scileppi.
R. Ted Cruz argued the cause for respondent. With him on the brief were Allyson N. Ho, Norman H. Zivin, and Wendy E. Miller.*
*Briefs of amici curiae urging reversal were filed for the Business Software Alliance by Andrew J. Pincus; for Cisco Systems, Inc., et al. by Seth P. Waxman, Mark C. Fleming, Anthony E. Peterman, and Tina M.
Briefs of amici curiae urging affirmance were filed for the American Intellectual Property Law Association by Peter A. Sullivan and William G. Barber; for Hoffmann-La Roche Inc. et al. by James W. Dabney, Stephen S. Rabinowitz, Henry C. Lebowitz, Randy C. Eisensmith, and John F. Duffy; for Law Professors by Ted Sichelman, pro se; and for the William Mitchell College of Law Intellectual Property Institute by R. Carl Moy.
Briefs of amici curiae were filed for the Federal Circuit Bar Association by Edgar H. Haug, Chiemi D. Suzuki, and Mark P. Walters; for the Intellectual Property Owners Association by Gary M. Hoffman, Jeffrey K. Sherwood, Douglas K. Norman, and Kevin Rhodes; for the Motion Picture Association of America et al. by Paul D. Clement, Daryl Joseffer, and Adam Conrad; and for 41 Law, Economics, and Business Professors by Mark A. Lemley, pro se.
JUSTICE ALITO delivered the opinion of the Court.
We consider whether a party who “actively induces infringement of a patent” under
I
This case concerns a patent for an innovative deep fryer designed by respondent SEB S. A., a French maker of home appliances. In the late 1980‘s, SEB invented a “cool-touch” deep fryer, that is, a deep fryer for home use with external surfaces that remain cool during the frying process. The cool-touch deep fryer consisted of a metal frying pot surrounded by a plastic outer housing. Attached to the housing was a ring that suspended the metal pot and insulated the housing from heat by separating it from the pot, creating air space between the two components. SEB obtained a U. S. patent for its design in 1991, and sometime later, SEB
In 1997, Sunbeam Products, Inc., a U. S. competitor of SEB, asked petitioner Pentalpha Enterprises, Ltd., to supply it with deep fryers meeting certain specifications. Pentalpha is a Hong Kong maker of home appliances and a wholly owned subsidiary of petitioner Global-Tech Appliances, Inc.1
In order to develop a deep fryer for Sunbeam, Pentalpha purchased an SEB fryer in Hong Kong and copied all but its cosmetic features. Because the SEB fryer bought in Hong Kong was made for sale in a foreign market, it bore no U. S. patent markings. After copying SEB‘s design, Pentalpha retained an attorney to conduct a right-to-use study, but Pentalpha refrained from telling the attorney that its design was copied directly from SEB‘s.
The attorney failed to locate SEB‘s patent, and in August 1997 he issued an opinion letter stating that Pentalpha‘s deep fryer did not infringe any of the patents that he had found. That same month, Pentalpha started selling its deep fryers to Sunbeam, which resold them in the United States under its trademarks. By obtaining its product from a manufacturer with lower production costs, Sunbeam was able to undercut SEB in the U. S. market.
After SEB‘s customers started defecting to Sunbeam, SEB sued Sunbeam in March 1998, alleging that Sunbeam‘s sales infringed SEB‘s patent. Sunbeam notified Pentalpha of the lawsuit the following month. Undeterred, Pentalpha went on to sell deep fryers to Fingerhut Corp. and Montgomery Ward & Co., both of which resold them in the United States under their respective trademarks.
SEB settled the lawsuit with Sunbeam, and then sued Pentalpha, asserting two theories of recovery: First, SEB
Following a 5-day trial, the jury found for SEB on both theories and also found that Pentalpha‘s infringement had been willful. Pentalpha filed post-trial motions seeking a new trial or judgment as a matter of law on several grounds. As relevant here, Pentalpha argued that there was insufficient evidence to support the jury‘s finding of induced infringement under
The District Court rejected Pentalpha‘s argument, as did the Court of Appeals for the Federal Circuit, which affirmed the judgment, SEB S. A. v. Montgomery Ward & Co., 594 F. 3d 1360 (2010). Summarizing a recent en banc decision, the Federal Circuit stated that induced infringement under
We granted certiorari. 562 U. S. 960 (2010).
II
Pentalpha argues that active inducement liability under
A
In assessing Pentalpha‘s argument, we begin with the text of
Although the text of
When a person actively induces another to take some action, the inducer obviously knows the action that he or she wishes to bring about. If a used car salesman induces a customer to buy a car, the salesman knows that the desired result is the purchase of the car. But what if it is said that the salesman induced the customer to buy a damaged car? Does this mean merely that the salesman induced the customer to purchase a car that happened to be damaged, a fact of which the salesman may have been unaware? Or does this mean that the salesman knew that the car was damaged? The statement that the salesman induced the customer to buy a damaged car is ambiguous.
So is
B
Finding no definitive answer in the statutory text, we turn to the case law that predates the enactment of
Unfortunately, the relevant pre-1952 cases are less clear than one might hope with respect to the question presented here. Before 1952, both the conduct now covered by
The pre-1952 case law provides conflicting signals regarding the intent needed in such cases. In an oft-cited decision, then-Judge Taft suggested that it was sufficient if the seller of the component part intended that the part be used in an invention that happened to infringe a patent. He wrote that
On the other hand, this Court, in Henry v. A. B. Dick Co., 224 U. S. 1 (1912), overruled on other grounds, Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U. S. 502 (1917), stated that “if the defendants [who were accused of contributory infringement] knew of the patent and that [the direct infringer] had unlawfully made the patented article... with the intent and purpose that [the direct infringer] should
Our decision in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U. S. 913 (2005), which looked to the law of contributory patent infringement for guidance in determining the standard to be applied in a case claiming contributory copyright infringement, contains dicta that may be read as interpreting the pre-1952 cases this way. In Grokster, we said that “[t]he inducement rule... premises liability on purposeful, culpable expression and conduct.” Id., at 937.
While both the language of
C
As noted above, induced infringement was not considered a separate theory of indirect liability in the pre-1952 case law. Rather, it was treated as evidence of “contributory infringement,” that is, the aiding and abetting of direct infringement by another party. See Lemley, Inducing Patent Infringement, 39 U. C. D. L. Rev. 225, 227 (2005). When Congress enacted
Aro II concerned
“Whoever offers to sell or sells... a component of a patented [invention]..., constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.” (Emphasis added.)
This language contains exactly the same ambiguity as
This question closely divided the Aro II Court. In a badly fractured decision, a majority concluded that knowledge of the patent was needed. 377 U. S., at 488, and n. 8; id., at 514 (White, J., concurring); id., at 524–527 (Black, J., dissenting).5
Justice Black‘s opinion, which explained the basis for the majority‘s view, concluded that the language of
Four Justices disagreed with this interpretation and would have held that a violator of
While there is much to be said in favor of both views expressed in Aro II, the “holding in Aro II has become a fixture in the law of contributory infringement under [section] 271(c),” 5 R. Moy, Walker on Patents § 15:20, p. 15–131 (4th ed. 2009)—so much so that SEB has not asked us to overrule it, see Brief for Respondent 19, n. 3. Nor has Congress seen fit to alter
Based on this premise, it follows that the same knowledge is needed for induced infringement under
III
Returning to Pentalpha‘s principal challenge, we agree that deliberate indifference to a known risk that a patent exists is not the appropriate standard under
A
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 of willful blindness hold 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 this doctrine is that defendants who behave in this manner are just as culpable as those who have actual knowledge. Edwards, The Criminal Degrees of Knowledge, 17 Mod. L. Rev. 294, 302 (1954) (hereinafter Edwards) (observing on the basis of English authorities that “up to the present day, no real doubt has been cast on the proposition that [willful blindness] is as culpable as actual knowledge“). It is also said that persons who know enough to blind themselves to direct proof of critical facts in effect have actual knowledge of those facts. See United States v. Jewell, 532 F. 2d 697, 700 (CA9 1976) (en banc).
This Court‘s opinion more than a century ago in Spurr v. United States, 174 U. S. 728 (1899),6 while not using the term
Following our decision in Spurr, several federal prosecutions in the first half of the 20th century invoked the doctrine of willful blindness.7 Later, a 1962 proposed draft of the Model Penal Code, which has since become official, attempted to incorporate the doctrine by defining “knowledge of the existence of a particular fact” to include a situation in which “a person is aware of a high probability of [the fact‘s] existence, unless he actually believes that it does not exist.” ALI, Model Penal Code § 2.02(7) (Proposed Official Draft 1962). Our Court has used the Code‘s definition as a guide in analyzing whether certain statutory presumptions of knowledge comported with due process. See Turner v. United States, 396 U. S. 398, 416–417 (1970); Leary v. United States, 395 U. S. 6, 46–47, and n. 93 (1969). And every Court of Appeals—with the possible exception of the District of
Given the long history of willful blindness and its wide acceptance in the Federal Judiciary, we can see no reason why the doctrine should not apply in civil lawsuits for induced patent infringement under
Pentalpha urges us not to take this step, arguing that
Pentalpha further contends that this Court in Grokster did not accept the Solicitor General‘s suggestion that Grokster and StreamCast could be held liable for inducing the infringement of copyrights under a theory of willful blindness. Reply Brief for Petitioners 14 (citing Brief for United States as Amicus Curiae, O. T. 2004, No. 04–480, pp. 29–30). But the Court had no need to consider the doctrine of willful blindness in that case because the Court found ample evidence that Grokster and StreamCast were fully aware—in the ordinary sense of the term—that their file-sharing software was routinely used in carrying out the acts that constituted infringement (the unauthorized sharing of copyrighted
B
While the Courts of Appeals articulate the doctrine of willful blindness in slightly different ways, all appear to agree on two basic requirements: (1) The defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact.9 We think these requirements give willful blindness an appropriately limited scope that surpasses recklessness and negligence. Under this formulation, a willfully blind defendant is one who takes deliberate actions to avoid confirming a high probability of wrongdoing and who can almost be said to have actually known the critical facts. See G. Williams, Criminal Law § 57, p. 159 (2d ed.
The test applied by the Federal Circuit in this case departs from the proper willful blindness standard in two important respects. First, it permits a finding of knowledge when there is merely a “known risk” that the induced acts are infringing. Second, in demanding only “deliberate indifference” to that risk, the Federal Circuit‘s test does not require active efforts by an inducer to avoid knowing about the infringing nature of the activities.
In spite of these flaws, we believe that the evidence when viewed in the light most favorable to the verdict for SEB is sufficient under the correct standard. The jury could have easily found that before April 1998 Pentalpha willfully blinded itself to the infringing nature of the sales it encouraged Sunbeam to make.10
SEB‘s cool-touch fryer was an innovation in the U. S. market when Pentalpha copied it. App. to Brief for Respondent 49. As one would expect with any superior product, sales of SEB‘s fryer had been growing for some time. Ibid. Pentalpha knew all of this, for its chief executive officer and president, John Sham, testified that, in developing a product for Sunbeam, Pentalpha performed “market research” and
Also revealing is Pentalpha‘s decision to copy an overseas model of SEB‘s fryer. Pentalpha knew that the product it was designing was for the U. S. market, and Sham—himself a named inventor on numerous U. S. patents, see id., at 78a–86a—was well aware that products made for overseas markets usually do not bear U. S. patent markings, App. in No. 2009–1099 etc. (CA Fed.), pp. A–1904 to A–1906. Even more telling is Sham‘s decision not to inform the attorney from whom Pentalpha sought a right-to-use opinion that the product to be evaluated was simply a knockoff of SEB‘s deep fryer. On the facts of this case, we cannot fathom what motive Sham could have had for withholding this information other than to manufacture a claim of plausible deniability in the event that his company was later accused of patent infringement. Nor does Sham‘s testimony on this subject provide any reason to doubt that inference. Asked whether the attorney would have fared better had he known of SEB‘s design, Sham was nonresponsive. All he could say was that a patent search is not an “easy job” and that is why he hired attorneys to perform them. App. 112a.
Taken together, this evidence was more than sufficient for a jury to find that Pentalpha subjectively believed there was a high probability that SEB‘s fryer was patented, that Pentalpha took deliberate steps to avoid knowing that fact, and that it therefore willfully blinded itself to the infringing nature of Sunbeam‘s sales.
*
*
*
The judgment of the United States Court of Appeals for the Federal Circuit is
Affirmed.
The Court is correct, in my view, to conclude that
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. See United States v. Jewell, 532 F. 2d 697, 706 (CA9 1976) (Kennedy, J., dissenting) (“When a statute specifically requires knowledge as an element of a crime, however, the substitution of some other state of mind cannot be justified even if the court deems that both are equally blameworthy“). 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
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.” Ante, at 766. 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? See Hellman, Willfully Blind for Good Reason, 3 Crim. L. & Philosophy 301, 305–308 (2009); Luban, Contrived Ignorance, 87 Geo. L. J. 957 (1999). The answer is not obvious. Perhaps the culpability of willful blindness depends on a person‘s reasons for remaining blind. E. g., ibid. Or perhaps only the person‘s justification for his conduct is relevant. E. g., Alexander & Ferzan, supra, at 23–68. 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. Ante, at 767. 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
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.
There is no need to invoke willful blindness for the first time in this case. Facts that support willful blindness are often probative of actual knowledge. Circumstantial facts like these tend to be the only available evidence in any event, for the jury lacks direct access to the defendant‘s mind. The jury must often infer knowledge from conduct, and attempts to eliminate evidence of knowledge may justify such inference, as where an accused inducer avoids further confirming what he already believes with good reason to be true. The majority‘s decision to expand the statute‘s scope appears to depend on the unstated premise that knowledge requires certainty, but the law often permits probabilistic judgments to count as knowledge. Cf. Connecticut Mut. Life Ins. Co. v. Lathrop, 111 U. S. 612, 620 (1884) (Harlan, J.) (“[B]eing founded on actual observation, and being consistent with common experience and the ordinary manifestations of the condition of the mind, it is knowledge, so far as the human intellect can acquire knowledge, upon such subjects“).
But examining the sufficiency of the evidence presented in the 5-day trial requires careful review of an extensive record. The trial transcript alone spans over 1,000 pages. If willful blindness is as close to knowledge and as far from the “knew or should have known” jury instruction provided in this case as the Court suggests, ante, at 759, then reviewing the record becomes all the more difficult. I would leave that task to the Court of Appeals in the first instance on remand.
For these reasons, and with respect, I dissent.