Secondary Liability And Remedies Outline

24. Secondary Liability and Remedies

Secondary Liability/ Indirect Infringement

MML 384-94, 723-48, 811-23, 1044-54; 35 U.S.C. § 271(b)-(c); 17 U.S.C. § 512,(c)

• Mostly would be better to sue the infringer, but direct liability may be difficult to monitor, expensive, may be suing customers, brings uncertainty

• For: can only fully protect creator if there is liability, incentive to create

• Against: Society benefits may exceed someone’s right to go after indirect liability

  • Unclear on when does it stop, what are the limits and boundaries of indirect liability

  • May deter good things, e.g. new technologies

Patent P.384-94

• Previously aiding and abetting 1952 Act splits into 2 types:

• (a) Contributory Infringement

  • 35 USC §271(c)

    • “Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, 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.”

      • (1) component

      • (2) materiality

      • (3) knowledge requirement

      • (4) uses for component

  • C.R. Bard, Inc. v. Advanced Cardiovascular Systems, Inc. (Fed. Cir. 1900)

    • Facts: P argues that D’s medical system is adapted for use by a surgeon in a surgery in a manner that infringes its patented medical treatment therefore D is a contributory infringer + actively induces infringement of P’s patent

      • Patentee didn’t sue direct infringer are a group of doctors, but the manufacturing company, as it is easier and look better + statutory exemption that sergeants cannot be used for employing certain medical methods.

    • Rule: 35 USC s.271(c) liable as a contributory infringer if:

      1. sells a component of a patented machine,

      2. constituting a material part of the invention,

      3. knowing it would be adapted for use in an infringement, and

         • limit liability to prevent a lot of third party to be directly liable

         • some may not have constructive knowledge

      4. no substantial non-infringing use

         • also, if there are no other real use for it, infer intent

    • Issue: whether the ACS catheter has no use except through practice of the patented method

    • Held: multiple ways to use substantial non-infringing uses for the ACS catheter D not liable for contributory infringement reversed summary judgment finding ACS a contributory infringer under § 271

(b) (Active) Inducement

• 35 USC §271(b) “Whoever actively induces infringement of a patent shall be liable as an infringer.” S.271(b) Elements:

  1. Intent (can be circumstantial), and

  2. Providing instructions (or otherwise aiding)

• Global-Tech Appliances, Inc. v. SEB S.A (Supreme Court 2011)

  • Facts: SEP patented its deep fryer in the US Pentalpha developed for and sold to Sunbeam a deep fryer (by copying the SEB) in HK Sunbeam resold in the US SEB sued. Pentalpha argues it has no actual knowledge of infringement to “induce”

  • Held: Tightened intent requirement:

    • Willful blindness is sufficient

      1. D must subjectively believe that there is a high probability that a fact exists and

      2. D must take deliberate actions to avoid learning of that fact

    • S.271(b) requires knowledge that the induced acts constitute patent infringement

    • Deliberate indifference to a known risk that a patent exists is not appropriate standard under s.271(b)

    • Willful blindness is just as culpable as actual knowledge

  • S.271(b) Elements:

    1. Intent (can be circumstantial), and

       • Intent that there is a specific patent (not just specific intent to do the actions)

       • Willful blindness would suffice:

         • Sufficient evidence showing knowledge of patent itself + infringing it

         • D objective believe that there might be an infringement + deliberate action to avoid learning that fact

         • Knowing it exists + chance that there might be a patent

       • contributory infringer knew that he was causing another person to engage in something was both patented and infringing

       • "willful blindness: defendant

         • (1) "subjectively believe[s] that there is a high probability" that a patent exists and that the defendant's acts infringe that patent; and

         • (2) "take[s] deliberate actions to avoid learning" about those facts.

    2. Providing instructions (or otherwise aiding)

  • S.271(c) explicitly tell knowledge requirement active inducement and

  • contributory infringement was together should read them the same

• Rubrics cube case: method and instructing people would count

• But must be active: not just to publish info about patent, or failure to prevent

Copyright P.723-48

Legislative history of indirect copyright liability

• Pre 1976 Act

  • May 31, 1790 Act §6 “Any person or persons who shall print or publish any manuscript, without the consent and approbation of the author or proprietor thereof . . . shall be liable to suffer and pay to the said author or proprietor all damages occasioned by such injury.”

    • 19^th century: Court introduced “tort” “joint tort feasors” “joint liabilities”

  • 1909 Act §1 “Any person entitled thereto… shall have exclusive right: (a) to print.. the copyright work”; §101 “If any person shall infringe the copyright in any work protected.. such person shall liable: (a) to an injunction”

• Early 20^th century: Copyright liability: copyright infringement is a tort court look to general principles of tort liability in determining the scope of indirect copyright liability

  1. Respondeat Superior: Employers liable for infringing acts of their employees (even without express authority or even against orders)

  2. Vicarious Liability: Liability extended to those who profit from infringing activity where an enterprise has the right and ability to prevent infringement. 2 elements: (1) third party right and ability to supervise; and (2) direct financial interest

  3. Contributory liability: one who, with knowledge of the infringing...

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