Part 2- Crimes and Torts, Chapter 8: Intellectual Property and Unfair Competition, Doc 5

Key Concepts in Patent Infringement and Defenses 1. Contributory Infringement and Knowledge Requirement (Aro II and Global-Tech Cases) Aro II and Global-Tech Appliances, Inc. v. SEB S.A. clarified that, under U.S. Patent Law (35 U.S.C. § 271), contributory infringement requires the accused infringer to have actual knowledge of the patent. This knowledge requirement also applies to induced infringement under § 271(b), which involves actively encouraging another to infringe a patent. In Global-Tech, SEB claimed Pentalpha (a Global-Tech subsidiary) induced infringement by copying SEB's fryer design and selling it in the U.S. without informing their attorney that the design was copied from SEB. The Court held that "willful blindness" to the risk of infringement can satisfy the knowledge requirement, meaning Pentalpha's deliberate avoidance of knowledge about SEB’s patent was sufficient to hold them liable. • Implications: This case established that deliberate steps taken to avoid knowledge of a patent (willful blindness) are legally equivalent to actual knowledge in cases of induced infringement. 2. Defenses Against Patent Infringement Claims Patent infringement defenses may focus on either the scope of the patent or its validity: • • Scope Defense: A defendant may argue that their product falls outside the literal or equivalent scope of the patent, known as designing around a patent. Validity Challenges: Defendants can also contest the patent's validity, arguing that the invention is not novel or was obvious to someone skilled in the field at the time it was patented. Courts may also overturn a patent if they find it invalid, even if it was initially granted by the Patent Office. In Microsoft Corp. v. i4i Ltd., the Supreme Court ruled that a challenger must provide clear and convincing evidence of invalidity rather than relying on a preponderance of evidence. 3. Patent Misuse and Declaratory Judgments • • Patent Misuse: A patentee who tries to exploit their monopoly beyond reasonable limits may be accused of patent misuse, such as by tying the sale of patented goods to unpatented ones or by coercively bundling unrelated patents. Misuse can be a defense in an infringement case. Declaratory Judgment Action: A party may seek a declaratory judgment to invalidate a patent without breaching a licensing agreement, as affirmed in MedImmune v. Genentech. This allows licensees to challenge patents without risking immediate infringement lawsuits. 4. Patent Reform and First-to-File System U.S. patent law traditionally followed a first-to-invent system, awarding patents to the original inventor. In 2011, proposed patent reforms suggested shifting to a first-to-file system, where the first to file a patent application would have priority, aligning U.S. law with many international systems. Critics argue that this change disadvantages small inventors, who may lack resources to file quickly, while proponents argue that it simplifies the patenting process and reduces disputes over who invented first. • Constitutional Debate: Some opponents of first-to-file contend it violates the U.S. Constitution's emphasis on protecting original inventors. However, proponents argue that "inventors" in the Constitution can include those who independently discover the same invention and file first. 5. Patent Owner Rights and Exhaustion Doctrine • • Exclusive Rights: Patent owners have exclusive rights to make, use, and sell the invention within the U.S. for 20 years from the application date, though design patents last 14 years. Patent Exhaustion: Once a patent owner sells a patented item, they cannot control or restrict the purchaser’s use of that item (e.g., resales), as clarified in Quanta Computer v. LG Electronics. The exhaustion doctrine limits the patent holder’s reach after an authorized sale, protecting downstream purchasers. Conclusion These cases and concepts underscore the nuanced landscape of patent infringement, balancing protection for inventors with defenses that allow reasonable competition. The Global-Tech case introduced willful blindness as a knowledge standard, expanding liability for those who deliberately avoid learning about patents, while Microsoft v. i4i raised the evidentiary bar for invalidity claims. The shift toward a first-to-file system further aligns U.S. patent policy with global standards, though it introduces debates over its fairness to individual inventors.