by Soonbok Lee*
A patent confers upon the holder a monopoly right to exclude others from making, using, offering for sale, or selling the patented invention. Whoever without authority conducts such activities directly infringes the patent. Direct infringement is a strict liability claim; it occurs regardless of the infringer’s intention or knowledge. The strict liability scheme for direct infringement ensures that a patent holder gains the full economic rewards of their invention, which constitutes a sufficient market-driven incentive for inventors to invest in making new products.
This strict liability scheme was maintained even after the Supreme Court expanded the scope of direct infringement by adopting the doctrine of equivalents. The doctrine allows a court to hold a party liable for patent infringement when the infringing product or process does not fall within the literal scope of patent claims, but nevertheless performs “substantially the same function in substantially the same way to obtain the same result” as the patented invention. The key question of the doctrine of equivalents is whether the allegedly infringing product or process contains elements identical or equivalent to each claimed element of the patented invention. The rationale for this doctrine is to prevent an “unscrupulous copyist” from making insubstantial substitutions in the patent that would be enough to avoid the literal scope of the patent claims. However, the actual application of the doctrine has nothing to do with the “unscrupulousness” of the infringer. Thus, a party who sells substantially identical products as the patented article may be liable for patent infringement regardless of whether the party deliberately avoids literal infringement or even whether the party in fact knows of the patent. The doctrine of equivalents has never deviated from the strict liability scheme of patent law.
Patent law has again expanded the scope of infringement by recognizing that one who does not by himself produce the same or an equivalent invention may nevertheless be held liable as an indirect infringer. Through the 1952 Patent Act, Congress codified the indirect infringement doctrine in 35 U.S.C. § 271(b) and (c). Section 271(b) provides: “Whoever actively induces infringement of a patent shall be liable as an infringer.” Section 271(c) provides:
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.
Both of those two forms of indirect infringement, i.e., induced infringement and contributory infringement, require the accused infringer to somehow lead another to engage in direct infringement. Most of indirect infringement claims arise when a manufacturer sells products which do not by themselves directly infringe a patent, but which may be used by purchasers or end-users to directly infringe the patent. If the number of purchasers/end-users is large and each instance of direct infringement is only on a small scale, it is impractical and inefficient for the patent holder to file multiple lawsuits against all individual direct infringers. The indirect infringement doctrine resolves that problem by allowing the patent holder to enjoin the one who sells the troublesome products which result in direct infringement.
Contrary to the doctrine of equivalents, the indirect infringement doctrine has diverged from the strict liability scheme. Contributory infringement of § 271(c) requires that the violator knows its product is especially and exclusively adapted for use in an infringement of the patent. Induced infringement in § 271(b) does not expressly mention any knowledge or intent of the inducer, but lower courts nevertheless have consistently required a certain level of specific intent of the inducer. Further, the Supreme Court recently held that the knowledge of the relevant patent is needed under § 271(b) and that “willful blindness” may also satisfy the knowledge requirement.
This Note argues that the specific intent requirement for § 271(b) should be abolished. The language of § 271(b) does not provide any textual supports for the specific intent requirement. Additionally, the specific intent requirement is contrary to the early development of the case law before the enactment of the 1952 Patent Act, which put no emphasis on the mental state of a defendant. It is also in conflict with many aspects of patent law including the utilitarian policies, the doctrine of equivalents and the basic risk allocation. Nor does the overlapping scope of § 271(b) and § 271(c) necessitate the specific intent requirement because Congress intended the generic language of § 271(b) to cover a broader scope of indirect infringement than the specific situation of § 271(c). Instead, induced infringement under § 271(b) should be considered as a strict liability claim. The tort principles of strict product liability and vicarious liability support strict liability on induced infringement with overlapping policy considerations.
The proximate causation analysis of tort law better fits the induced infringement doctrine than the specific intent requirement. The text of § 271(b) expressly indicates a causation element, which in turn necessitates proximate causation analysis. Proximate causation does not thwart the strict liability scheme of patent law and thereby avoids the doctrinal and practical problems of the current specific intent requirement. The extensive case law of tort law regarding proximate causation analysis benefits parties, courts and practitioners. Proximate causation analysis is flexible enough to safeguard against over-expansion of the scope of inducement.
Part II will summarize courts’ decisions and commentators’ opinions regarding the specific intent element of induced infringement. Part III will refute current arguments suggested in support of the specific intent requirement and then justify a strict liability for induced infringement. Part IV will discuss the validity of proximate causation analysis in the context of induced infringement.
II. Various Specific Intent Tests for Induced Infringement
A. Intra-Circuit Splits in Federal Circuit Court Decisions
Before the Supreme Court’s Global-Tech decision, the Federal Circuit had articulated numerous inconsistent standards for the specific intent element of induced infringement. Initially, in Hewlett-Packard Co. v. Bausch & Lomb Inc., the Federal Circuit required the plaintiff to show “proof of actual intent to cause the acts which constitute the infringement.” The standard of Hewlett-Packard is a fairly low hurdle because it only requires that the defendant intended to induce the acts later held to constitute infringement. But in Manville Sales Corp. v. Paramount Systems, Inc., the Federal Circuit required proof the defendant possessed “specific intent to encourage another’s infringement,” and thus the plaintiff had the burden of showing the defendant’s actions “induced infringing acts and the defendant knew or should have known his actions would induce actual infringement.” The standard of Manville is higher than that of Hewlett-Packard in that the patent holder needed to show the defendant knew of the patent and actually had intended to induce violation of the law.
Sixteen years later, in DSU Medical Corp. v. JMS Co., the Federal Circuit dealt with this conflict and upheld en banc the higher standard of Manville, holding that inducement requires, “that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another’s infringement . . . not merely that the inducer had knowledge of the direct infringer’s activities.” However, in SEB S.A. v. Montgomery Ward & Co., the Federal Circuit qualified the holding of DSU as having decided “the target of the knowledge, not the nature of that knowledge,” and delivered a ruling that “deliberate indifference of a known risk” was sufficient to satisfy the actual knowledge requirement. The court once again obscured the scope of the intent element, and finally in 2011, the Supreme Court stepped in to address this issue.
B. Global-Tech Appliances, Inc. v. SEB S.A.
The Supreme Court in Global-Tech held that induced infringement under § 271(b) requires knowledge that the induced acts constitute patent infringement. The Court explained § 271(b) implies a knowledge element but the text of § 271(b) and the relevant pre-1952 cases are unclear on whether § 271(b) merely require that the inducer lead another to engage in conduct that happens to amount to infringement or that the inducer must persuade another to engage in conduct that the inducer knows is infringement. However, the Court determined that Aro Manufacturing Co. v. Convertible Top Replacement Co. resolved the question by holding that a violator of § 271(c) must know that the combination for which his component was especially designed was both patented and infringing. The Court then decided that there is no reason to treat § 271(b) differently and thus § 271(b) requires knowledge of the relevant patent as well.
Further, the Court adopted the doctrine of “willful blindness” from criminal law. This doctrine holds that defendants cannot negate knowledge or willfulness by deliberately shielding themselves from clear evidence of critical facts that are strongly suggested by the circumstances. Willful blindness requires: (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. The “deliberate indifference” test of the Federal Circuit is erroneous in that it permits a finding of knowledge where there is merely a known risk that the induced acts are infringing and it does not require active efforts by an inducer to avoid knowing about the infringing nature of the activities.
In summary, the Court in Global-Tech required two steps of knowledge. First, the inducer must know about the action he wishes to bring about from another. The Court finds its support from the combination of the terms “induce” and “actively” in § 271(b). Second, the inducer must know that the action constitutes infringement of the relevant patent. The Court finds its support from Aro II. The “willful blindness” doctrine is relevant to the second knowledge requirement.
C. Commentators’ Suggestions
Commentators have articulated various specific intent standards for induced infringement. Mr. Rader supports the Hewlett-Packard standard. He provides three justifications: (1) the Manville standard results in uneven patent protection across different industries, (2) the Hewlett-Packard standard maintains the distinction between infringement and willful infringement, and (3) the Hewlett-Packard standard effectively imposes a risk of personal liability on corporate officers and thus results in a favorable settlement for patent holders.
Professor Lemley suggests a “sliding scale” approach which a defendant’s act and intent interact with each other in a way that the more significant the defendant’s conduct, the less intent should be required for liability. If the defendant causes infringement, his knowledge of the acts caused may satisfy the intent requirement, whereas if the defendant merely assists infringement, intent to infringement patent is further required. Professor Lemley tries to avoid “letting the mastermind escape,” but at the same time acknowledges that it is unreasonable to hold a mere facilitator liable in a case where he did not in fact know that the act he was encouraging was wrong.
Professor Holbrook agrees with the Manville standard and argues that an inducer should be liable only when he intended to induce patent infringement. He explains that truly culpable parties are those who intend to induce patent infringement and not those who simply intend to induce the acts that happen to constitute infringement. He is concerned that other lower standards may involve anti-competitive consequences by affording an exceedingly powerful tool to patent owners.
Professor Oswald goes in the opposite direction by questioning why a direct infringer without any knowledge of the patent should nevertheless be held strictly liable, while an indirect infringer without direct encouragement should escape liability. She emphasizes judicial economy and allocation of the risk of loss, and argues that a specific intent requirement such as the Manville standard may undermine the congressional intent inherent in the strict liability regime of direct infringement.
Professor Rantanen proposes an objective risk-based approach similar to the tort concept of objective recklessness. The test asks whether a high risk of infringing a valid patent would have been obvious to a person in the accused party’s position. Professor Rantanen argues that this new approach enables an optimal adjustment of the deterrence effects of the inducement doctrine and that it is the normative standard actually being applied in practice. He notes that a similar object risk-based analysis has already been adopted in the context of willful infringement.
III. Refuting the Argument for the Specific Intent Requirement
Although courts and commentators debate on the precise standard of the specific intent for induced infringement under § 271(b), the majority agree that induced infringement requires at least some specific intent of the inducer. They have justified imposing a specific intent requirement through the following four arguments: (1) the text of § 271(b) implies a specific intent requirement, (2) the historical origin of the induced infringement doctrine mandates a specific intent of the inducer, (3) the structural relationship between § 271(b) and § 271(c) implies a specific intent requirement for § 271(b), and (4) policy considerations protecting innocent parties and avoiding over-deterrence of innocent acts or anticompetitive consequences necessitate a specific intent requirement.
This Note argues that none of those four arguments sufficiently justify the a specific intent requirement for induced infringement, and argues for a strict liability claim for induced infringement.
A. The Text of § 271(b)
Section 271(b) provides: “Whoever actively induces infringement of a patent shall be liable as an infringer.” The Supreme Court began its analysis in Global-Tech by stating “[a]lthough the text of § 271(b) makes no mention of intent, we infer that at least some intent is required.” However, in Connecticut National Bank v. Germain, the Court held that “courts must presume that a legislature says in a statute what it means and means in a statute what it says there.” It is questionable whether Global-Tech’s “inference” of an intent element, which has been done beyond the text of § 271(b), is consistent with the “cardinal canon” of Connecticut National Bank.
In any case, the text of § 271(b) does not provide any room for such inference. The statute does not mention “purposeful inducement,” “intentional inducement” or “knowing inducement”—it mentions “active inducement.” In the common understanding around the time of 1952, “induce” means “1. To lead on; to influence; to prevail on; to move by persuasion or influence . . . . 3. To bring on or about; to effect; cause; as, a fever induced by fatigue or exposure.” The scope of the term “inducement” is not necessarily limited to a purposeful, intentional or knowing stimulation but encompasses a wide range of non-intentional activities which influence or cause another to act. Further, if the Global-Tech Court inferred a knowledge element from the term “induce,” such inference is not in harmony with another federal statute. 15 U.S.C. § 13(f) provides: “It shall be unlawful for any person engaged in commerce, in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by this section.” It implies that Congress understands the term “induce” does not have a knowledge element because otherwise the term “knowingly” becomes redundant.
Nor does the term “actively” contain any specific intent element. The word “actively” means “[i]n an active manner; with activity” and it must limit the term “induce.” With that understanding, “[w]hoever actively induces infringement of a patent” in § 271(b) can be converted to “whoever induces infringement of a patent in an active manner” or “whoever induces infringement of a patent with activity,” which indicates that the term “actively” distinguishes between acts of commission and acts of omission, not between mental states. Combined with the term “induce,” the term “actively” serves a role in eliminating causative omissions from the scope of § 271(b).
The Supreme Court in Global-Tech then appealed to commonsense and asserted that “[w]hen a person actively induces another to take some action, the inducer obviously knows the action that he or she wishes to bring about.” Again, it is a matter of interpretation of the terms “actively” and “induce.” As discussed above, neither of the terms connotes any intent component such as the knowledge element which the Court asserts. The Court’s subsequent analysis on whether the inducer must know of the patent is a byproduct of this wrong premise.
B. The Historic Origin of § 271(b)
The early principle of contributory infringement, which encompasses the current concept of both induced infringement and contributory infringement, originated from the tort law of aiding and abetting. Aiding and abetting occurs when a defendant provides substantial assistance or encouragement to another’s tortious conduct with specific intent to further the other’s wrongdoing. Probably because of the doctrinal origin, early courts discussing contributory infringement frequently used terms indicating a specific intent such as “intent,” “purpose” or “knowledge” with regard to the accused party. However, the precise meaning of such “intent,” “purpose” or “knowledge” in the context of contributory infringement has been unclear, and more importantly, such a specific intent became a mere legal fiction and invisible as the contributory infringement doctrine evolved away from the historical origin.
Wallace v. Holmes is the earliest case in which someone other than direct infringers was found liable for patent infringement. The patent at issue in Wallace was for a lamp containing a particular burner and a particular chimney. The burner without the chimney, or the chimney without the burner, was “utterly useless.” The defendants sold burners which were substantially the same as the burner used in the patent. They advertised and displayed their burner furnished with the chimney of the patented invention in their sales room, but they did not sell any chimneys. Instead, chimneys were produced and sold by a third party, and purchasers of both the burner and the chimney could combine them and produce the patented lamp. The Connecticut District Court held the defendants were “joint infringers” with the “express purpose” of assisting patent infringement, based on the joint-tortfeasor theory of tort law. The court explained:
The defendants have not, perhaps, made an actual pre-arrangement with any particular person to supply the chimney to be added to the burner; but, every sale they make is a proposal to the purchaser to do this, and his purchase is a consent with the defendants that he will do it, or cause it to be done. The defendants are, therefore, active parties to the whole infringement, consenting and acting to that end, manufacturing and selling for that purpose.
Wallace is considered to be the origin of the contributory infringement doctrine. The doctrinal basis of the contributory infringement liability was the tort liability in a concerted action of joint-tortfeasors, and the concerted action was found in an implicit proposal/consent inherent in the sale and advertisement of non-staple articles. With this rationale, the “express purpose” was not merely the mental state of the accused infringer, but was an overt purpose involving some affirmative actions, such as advertisement of non-staple articles for their infringing use, which stimulates buyers to engage in an infringement.
Later, courts tried to relax or even abolish Wallace’s “express purpose” requirement when a defendant sells non-staple articles. In Thomson-Houston Electric Co. v. Ohio Brass Co., the defendant sold switches and trollies that had no practical utility except in an electric street railway covered by the patent at issue. The catalogue of products merely described their utility, but not their infringing capacity. The Sixth Circuit held the defendant liable for contributory infringement because the defendant, in offering for sale to the general public the switch and trolley specifically adapted for the patented system, was “legally presumed to intend the natural consequences of his act.” Therefore, in Ohio-Brass, the sale of a non-staple article constituted substantially prima facie evidence of contributory infringement and the intent or knowledge of the defendant was imputed to the non-staple nature of the article. Other courts similarly found contributory infringement by presuming intent based on the non-staple nature of products the defendant sold.
When a defendant sold staple articles of commerce, courts rarely found any contributory infringement liability on the defendant. In Saxe v. Hammond, the patent at issue was for a tremolo attachment for musical instruments. The defendant manufactured and sold fans capable of revolving and the patent holder argued that the defendant infringed on their patents claims because the revolving fans were capable of infringement if they were combined with musical instruments in a certain position and arrangement. The revolving fans themselves were neither new nor patented articles, however. The Massachusetts Circuit Court rejected the infringement claim distinguishing the instant case from Wallace. The court explained:
The gist of the decision in [Wallace] was, that the actual concert of the makers of the different elements in the combination, was a certain inference from the facts in that case, and the distinct efforts of the defendants, to bring into use those elements of the combination which comprised the whole invention, although they could not be used without adding one other element, were found to be proved. No such state of facts is proved in this case, as has already been shown . . . . As defendants only make one element of the patented invention, in order to hold them guilty, I must find proof connecting them with the infringement. Different parties may all infringe, by respectively making or selling, each of them, one of the elements of a patented combination, provided those separate elements are made for the purpose, and with the intent, of their being combined by a party having no right to combine them. But the mere manufacture of a separate element of a patented combination, unless such manufacture be proved to have been conducted for the purpose, and with the intent of aiding infringement, is not, in and of itself, infringement. A patent is valid for a new combination of old elements. A person who uses one or more of the old elements is not an infringer, unless he uses the new combination.
Saxe is significant because the court made it clear that when a patent is for a new combination of known elements, a person who uses one or more of the known elements cannot be an infringer unless he uses the entire new combination. The defendant in Saxe sold articles that had already been in the public domain, whereas the defendant in Wallace sold novel articles specifically adapted to the patented product. While the court in Saxe confirmed the manufacture of one element of a patented combination may constitute contributory infringement if the production is coupled with the purpose and intent of aiding infringement, at the same time suggests that a defendant who manufactures a non-novel article is not an infringer regardless of his purpose or intent unless he uses the patent combination as a whole. In other words, Saxe seems to consider the non-novel nature of the articles the defendant sold as an irrefutable defense against the contributory infringement claim.
Three years after Saxe, the same court was faced with another contributory infringement case, Bowker v. Dows. In Bowker, the patent at issue was for combining saponine extract with liquids containing carbonic acid gas in order to stabilize foams. The facts are not clear as to whether the saponine extract was novel. The patentee sued the defendant who made and sold an extract containing saponine. The court did not present detailed facts, but stated that “the defendant sells an extract containing saponine to persons who intended to use it in the combination claimed in the patent, and it is advertised and sold for that very purpose.” The court held the sale constituted infringement of the patent, explaining that although the manufacture and sale of the saponine extract would not, without more, be an infringement, the law must not exonerate the defendant who made and sold the extract “for the express and avowed purpose of its use in the combination.”
The exact scope of the Bowker decision remains unclear due to the uncertainty of its facts. If the Bowker court meant that the sale of staple articles with express purpose may constitute contributory infringement, it is inconsistent with the rule of Saxe which the same court had articulated three years earlier. The Bowker decision instead seems to follow the logic of Wallace, which dealt with a sale of non-staple articles. It is notable that the court put emphasis on express and avowed purpose rather than the mere inner mental state of the defendant. The express and avowed purpose requirement requires some activities (advertising, etc.) that stimulate another’s infringing activity; it is more akin to an act requirement, not a specific intent requirement. As discussed above, later cases relaxed or abolished the express purpose requirement, and they imputed the purpose requirement to the sale of non-staple articles.
Some courts denied contributory infringement even when a defendant sold his products with knowledge that the use of the products would cause infringement, which weakens the argument that the historic origin of § 271(b) necessitates infringers’ knowledge of infringement. For example, in Chas. H. Lilly Co. v. I.F. Laucks, Inc., the patent at issue was for a certain type of glue that used soya bean flour or meal as a base. The defendant manufactured and sold soya bean flour which had a variety of non-infringing uses. On at least one occasion, the defendant solicited interest from a glue manufacturer. The court, however, held that “soya bean meal and soya bean flour are standard articles of commerce; and being such a sale thereof may not be enjoined.” A similar holding is found in Individual Drinking Cup Co. v. Errett. The patent at issue was for a machine for dispensing paper drinking cups and each defendant sold dispensing machines or cups, but not both. Both dispensing machines and cups had non-infringing uses. The Second Circuit held: “Where . . . any paper cup of proper size is available for the purposes of the infringing device . . . the mere sale or use of the paper cup . . . with the knowledge that the same was to be used in a patented machine, cannot charge the vendor of the cup . . . with contributory infringement . . . .”
Early decisions of the Supreme Court imputed the intention of defendants to the non-staple nature of their products. In American Cotton-Tie Co. v. Simmons, the plaintiff owned patents for improvements in metallic cotton bale ties, each tie consisting of a buckle and a band, and sold the ties with the words “Licensed to use once only” stamped in the metal of the buckle. The defendants reconstructed and sold the metal ties for cotton bales. The defendants contended that they did not infringe the patents because they did not bale cotton with the ties. The Court rejected the contention. Relying on both Saxe and Bowker, the Court explained that because the defendants prepared and sold the tie, which would not have been made or sold without the bale cotton, they intended it to be used to bale cotton and to produce the results set forth in the patents, thus infringed on them. Also, in Henry v. A.B. Dick Co., the plaintiff sold his patented mimeograph machine to a third party, with a license restriction that all ink be bought from the plaintiff. The defendant sold ink directly targeting the third party who purchased the machine from the plaintiff. The Court held the act of defendant constituted contributory infringement. The Court explained:
Undoubtedly a bare supposition that by a sale of an article which, though adapted to an infringing use, is also adapted to other and lawful uses, is not enough to make the seller a contributory infringer. . . . There must be an intent and purpose that the article sold will be so used. Such a presumption arises when the article so sold is only adapted to an infringing use. [citation omitted] It may also be inferred where its most conspicuous use is one which will co-operate in an infringement when sale to such user is invoked by advertisement. [citation omitted].
In summary, the early case law of the contributory infringement doctrine, which encompasses the current indirect infringement doctrines of both inducement and contributory infringement, diverged from the original tort principle by vitiating the specific intent requirement. Courts did not place much emphasis on the inner mental state of a defendant; the key was the nature of the activity the defendant engaged in, especially, the nature of the products the defendant sold. If the products were specially adapted to an infringing use, courts found the defendant liable for contributory infringement no matter what the defendant knew or intended. On the other hand, if the products had substantial non-infringing uses, courts exonerated the defendant even if the defendant knew his products would cause infringement.
Congress codified § 271(b) acknowledging and adopting the case law development of the contributory infringement before the enactment of the 1952 Patent Act. In the pre-1952 case law, the knowledge or intent of the defendant was merely a legal fiction which had nothing to do with the actual mental state of the defendant. Overemphasis on the specific intent requirement is, therefore, contrary to the historical background of § 271(b).
C. Relationship between § 271(b) and § 271(c)
Section 271(b) provides that whoever actively induces infringement of a patent shall be liable as an infringer. Section 271(c) imposes contributory infringement liability on a party who sells a component constituting “a material part” of a patented invention which is “not a staple article or commodity of commerce” on the condition that the party knows the component is “especially made or especially adapted for use in an infringement” of the patent. Thus, § 271(b) defines the prohibited activity using general terms of “actively induces,” whereas § 271(c) narrowly specifies the prohibited activity by the nature of the product sold and the knowledge of the seller. Relying on the statutory structure, the Supreme Court and commentators found two somewhat different justifications for a specific intent requirement of induced infringement. The first one, which the Supreme Court adopted in Global-Tech, is that because the two provisions have a common origin in the pre-1952 understanding of contributory infringement, the knowledge requirement of § 271(c) is also applicable to § 271(b). The second one, which some commentators rely on, is that the broader scope of § 271(b) should be counterbalanced by a stricter intent requirement in order not to render § 271(c) superfluous. However, as discussed below, neither of them is persuasive given the legislative history and the purposes of the two provisions.
We first consider the legislative history. Section 271(b) and § 271(c) were intended as complementary provisions, together codifying the previously developed case law on contributory infringement. The Senate and House Reports on the 1952 Act explain that § 271(b) “recites in broad terms” the early principles of contributory infringement, and that § 271(c) more concerns “the usual situation in which contributory infringement arises,” which is “much more restricted than many proponents of contributory infringement believe should be the case.” Thus, § 271(b) with its broad terms covers the entire scope of early contributory infringement doctrine and § 271(c) provides a “usual” and “restricted” situation of such broadly defined contributory infringement. It must be noted that a contributory infringer defined in § 271(c) is presumed to have specific intent or express purpose to cause another’s infringement under the pre-1952 case law because he sells products which are specially adapted to a patent infringement. That is, contributory infringement of § 271(c) always satisfies the requirements of induced infringement of § 271(b), but the opposite is not true, which means that § 271(b) has more relaxed requirements than those of § 271(c). It follows that the knowledge requirement of § 271(c) does not necessitate any similar or higher specific intent requirement for § 271(b).
It is fair to regard that Congress intended to codify § 271(b) broadly so as to subsume the entire scope of § 271(c). The broadness of § 271(b) does not necessarily render § 271(c) meaningless, however. Contributory infringement is found if (1) a party offers to sell or sells (2) a material component of a patented invention (3) 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. Such specific requirements produce more predictable and reliable results than § 271(b). Practically it is beneficial to the judicial system because it saves judicial resources by promoting settlements between parties and discouraging non-meritorious lawsuits. It is also beneficial to parties because they are able to accurately assess the benefit and risk of litigations.
Therefore, the structure of § 271(b) and § 271(c) does not necessitate any specific intent requirement in § 271(b). The relevant legislative history undermines a specific intent requirement because § 271(b) was codified to broadly cover the entire scope of the early contributory infringement doctrine, whereas § 271(c) was to provide specific guidance for the most common type of contributory infringement. The broader scope of § 271(b) does not render § 271(c) useless because the specific language of § 271(c) provides practical benefits by producing more predictable and reliable results than § 271(b).
D. Policy Considerations
Some commentators use a specific intent requirement in order to limit an over-expansion of the scope of induced infringement. Professor Lemley asserts that where a party merely helps or assists but does not actually cause another’s infringement, it makes little sense to hold the party liable if the party did not in fact know that the act the party was encouraging was wrong. Professor Holbrook is concerned that a low specific intend threshold would penalize a good actor and create a chilling effect on competition, which in turn raises product prices. Professor Rantanen argues that too low of a fault standard would over-deter lawful, productive conduct and impose excessive information costs on potential infringers.
Those concerns are valid in the sense that a patent holder’s right must be limited in some way so as not to be misused against innocent competitors. The question this Note poses, however, is why a specific intent requirement, which is not even expressly mentioned in the text of § 271(b), is considered to be the only solution for this problem. Anti-competitive consequences or over-deterrence may be avoided by adequately limiting the scope of induced infringement, and a specific intent requirement is not the only way of doing that. Arguments justifying a specific intent requirement rely on a premise that inducement liability without such a specific intent requirement necessarily results in unreasonable liabilities on innocent parties. Such reasoning is inherently circular because it presumes that a party without an intent or knowledge of causing infringement is innocent and that inducement liability on that party is necessarily unreasonable. Patent law is grounded on a different policy rationale from that of tort law or criminal law and thus the culpability of a certain party should be determined differently than in those areas of law. In this regard, the specific intent requirement is inconsistent with many important concepts in patent law.
First, the specific intent requirement is inconsistent with the utilitarian considerations, which underlie patent law. Drafters of patent law chose to give an exclusive right to a patent holder and impose strict liability on infringers in order to maximize economic benefits to the patent holder who contributed to society with a useful invention. But over-protection of the patent right is as bad as under-protection because it burdens free use of publicly disclosed ideas upon which either no patent is obtained or patent protection has expired. The specific intent requirement, however, has nothing to do with the guarantee of free use of publicly disclosed ideas. Whether a certain technology is within the public domain or not is subject to an objective comparison of the technology and other patented technologies. A specific intent requirement simply does not fit the objective comparison.
Second, the specific intent requirement is also in tension with the strict liability scheme of the Doctrine of Equivalents. The Doctrine of Equivalents and the induced infringement doctrine are the same in that they both expand the scope of infringement, but their current applications are in sharp contrast. Although courts adopted the doctrine of equivalents in order to deter an “unscrupulous copyist,” the actual application of the doctrine has nothing to do with the unscrupulousness of the infringer. It only concerns an objective comparison of a patented invention and an alleged infringing product. On the contrary, the rationale behind the induced infringement doctrine is to give a patent holder the most effective remedy against infringing activities, but the actual imposition of inducement liability depends on the mental state of a defendant. As a result, it exonerates a party who is completely careless and it imposes the burden of such inadvertent inducement on the patent holder.
Conceptually, the specific intent requirement matches the doctrine of equivalents, which is to meant deter unscrupulous copyists, as opposed to the inducement doctrine, which is to provide effective protection for patent holders. If expansion of the scope of liability is troublesome, and it needs to be limited by using the specific intent requirement, there is no reason to distinguish the doctrine of equivalents and leave it out from the imposition of a specific intent requirement. But courts chose to maintain the doctrine of equivalents in the realm of strict liability, which tells us that they view the costs of extending liability as acceptable in light of the economic objectives and utilitarian benefits of patent law. Strict liability inducement is less objectionable and less costly than the strict liability requirement from the doctrine of equivalent in terms of cost of investigating and determining what activities infringe. In this sense, the doctrine of equivalents and the induced infringement doctrine are currently incoherent.
Third, the specific intent requirement is in a sharp tension with the basic risk allocation of patent law. Consider the following example: Patentee A has a patent for a cancer drug containing 10 mg/g or more of Compound X. Compound X is not a novel compound and has been used as an effective component for treating diabetes. Seller B, who does not know of A’s patent, sells a cancer drug containing 15 mg/g of Compound X. On the other hand, Seller C knows of A’s patent and tries to mimic the invention, but because of fear of patent infringement liability, he produces a cancer drug containing only 9 mg/g of Compound X. In such circumstances, under current patent law Seller B is liable for infringement but Seller C is not (assuming 9 mg/g is not equivalent to 10 mg/g or more). This is true even though Seller C is in some sense more mentally culpable than Seller B. This is a fundamental policy choice expressed in our patent laws that allocate the loss of inadvertent infringement on market participants. Current patent law thus imposes an obligation on market participants to search relevant patents and to design around them. In the above example, Seller B did not fulfill his obligation to search relevant patents, and thus patent law punishes him. Seller C on the contrary fulfilled the obligation and thus is off the hook regardless of his intention.
Now consider another example. Seller D, who does not know of A’s patent, sells highly purified Compound X thinking it would be used for producing a diabetes drug. Seller E knows of A’s patent and sells purified Compound X, and he simultaneously advertises that his product can be used in copying the patented cancer drug. Almost all direct infringers use Seller D’s purified Compound X because it is more pure; only a few direct infringers actually use Seller E’s product. Current patent law holds Seller E liable for induced infringement but will exonerate Seller D because Seller D did not have any specific intent. It puts market participants in a position where they need to research all relevant patents that their products might directly infringe but not any patents that their products might induce infringement. When faced with a patent, however, they cannot determine how the patent is related to their products until they analyze it, and consequently, they are caught in a situation that is a catch-22. They must decide whether to analyze it or not. This result seriously vitiates the fundamental principle of patent law that obligates market participants to search relevant patents.
In that sense, the concerns of excessive product prices and information costs, which Professor Holbrook and Professor Rantanen raise, are insignificant if not unreal. The strict liability scheme of direct infringement imposes on market participants an obligation to search for patents that are relevant in anyway. Market participants cannot distinguish direct-infringement-related patents from inducement-related patents until they search and analyze all of those patents. It is questionable how much cost a specific intent requirement could reduce market participants’ burden. Sophisticated market participants, who are major targets of induced infringement claims, have already used a lot of resources in searching and analyzing patents in the relevant field. Imposition of an obligation to search another set of inducement-related patents would not significantly increase production/information costs.
E. Justifications for Strict Liability for Induced Infringement
The current induced infringement doctrine exonerates a party who inadvertently causes another to infringe a patent. If the patent holder is unable to sue the direct infringer, the burden of loss incurred by such infringement is on the patent holder. On the other hand, strict liability for induced infringement shifts the burden to the party who inadvertently and indirectly causes another’s infringement. Thus, the key issue here is determining which party should bear the burden of loss. This Note argues that induced infringement should be subject to strict liability—and the burden of loss should be on the party that causes the infringement, not on the patent holder. Strict product liability theory and the vicarious liability theory provide doctrinal supports for strict liability for induced infringement.
First, the strict product liability theory of tort law justifies the strict liability scheme for induced infringement. Tort law imposes strict liability on a seller if the defect in his product causes damage to a buyer. The seller is liable even when he did not know of the defect in his product or even when he exercised every reasonable precaution to ensure the safety of the product. The injured buyer can recover damages from the seller if he proves that the product was in fact defective, such defect existed when the product left the seller’s control, and the defect was the proximate cause of the injury sustained. The Minnesota Supreme Court adopted such strict product liability based on the following four policy considerations: (1) the public interest in safety will be promoted by discouraging the marketing of defective products; (2) the burden of loss caused by placing a defective product on the market should be borne by the manufacturer, the party who is best able to distribute the risk by insuring against inevitable hazards, as a part of the cost of the product; (3) maximum legal protection should be afforded the consumer to promote product safety; and (4) one injured by a defective product should be entitled to bring action directly against the party responsible for putting the product on the market.
The policy considerations suggested by Minnesota Supreme Court have equal force in induced infringement of patent law. Most inducement cases involve the sale of products that are capable of an infringing use. An inducer puts his product into the stream of commerce and a direct infringer buys the product and uses it for an infringing activity, which in turn causes harm to the patent holder. If we analogize the infringing use of the product to a “defect” in the product, the public interest in protecting the patent holder’s intellectual property right will be promoted by discouraging the sale of such “defective” products (policy (1) above). The seller of such a product is in the best position to balance the benefit created by the product with the cost of potential induced infringement liability (policy (2) above). The patent holder should be able to enjoy maximum legal protection of his monopoly right (policy (3) above), and thus he should be entitled to bring an action directly against the party responsible for putting the product on the market (policy (4) above).
It is noticeable that such policy considerations substantially overlap with the rationales behind the induced infringement doctrine. Both strict product liability and inducement liability guarantee maximum legal protection for an injured party by enabling him to sue the seller of the product that resulted in the injury. They both allocate the burden of loss to the seller who attains financial benefits by bringing the product into the stream of commerce.
An induced infringement case may factually be different from usual strict product liability cases in that the buyer of the infringing product is a direct infringer who inflicts damages on the patent holder, whereas in a strict product liability case, the buyer of the product suffers damages caused by the product. But such a difference does not significantly weaken any of the policy considerations discussed above. Most importantly, in both induced infringement and strict product liability, the seller of the product who financially benefits from the sale of it is in the best position to absorb the damages caused by the product. There may be cases where an infringing use of the product is insubstantial and direct infringement should be imputed mostly to the direct infringer’s independent activity. In such cases, proximate causation analysis, especially the superseding intervening force exception, will adequately limit induced infringement liability. The detailed discussion will follow in Part IV.
The vicarious liability theory may be another basis for the strict induced infringement liability. In certain situations, courts hold a defendant vicariously liable for another’s wrongdoing without finding any scienter in the defendant. It commonly occurs where an employer is held vicariously liable for the wrongdoing of its employee acting within the scope of his employment. Such vicarious liability, or respondeat superior, is strict liability imposed on the employer for the employee’s torts, and thus the employer is liable even when he exercised every possible precaution during hiring or supervising the employee. The older rationale justifying vicarious liability was that the employer has control of the employee and should be responsible for his torts, but it is largely supplanted by notions that the employer’s business should be responsible for risks the enterprise imposes on the community. Thus, the current view is that the employer’s liability should extend beyond his actual or possible control over the employees to include risks inherent in or created by the enterprise because the employer, rather than the innocent injured party, is best able to spread the risk through prices, rates or liability insurance.
The Federal Circuit in BMC Resource, Inc. v. Paymentech, L.P. brought the theory of vicarious liability into patent law, but in an inaccurate way. The court stated:
[T]he law imposes vicarious liability on a party for the acts of another in circumstances showing that the liable party controlled the conduct of the acting party. . . . In the context of patent infringement, a defendant cannot . . . avoid liability for direct infringement by having someone else carry out one or more of the claimed steps on its behalf.
But vicarious liability is a type of secondary liability, which must be conceptually distinguished from direct infringement liability. The vicarious liability theory better supports induced infringement liability. The rationales for both vicarious liability and induced infringement coincide in that they provide an effective protection for the harmed party by allowing them to sue the party who attains financial benefits from the activity causing the harm. It is especially useful in dealing with a case where an inducer does not sell any product to a direct infringer. For example, if an employer directs his employee to manufacture infringing products, the employer is strictly liable for inducement. Or, if a principal contracts with a contractor to manufacture infringing products and if the principal is closely involved with the details of the contractor’s work, the principal is also strictly liable for inducement. Both cases squarely fit the term “actively induces” of § 271(b) and its goal of ensuring effective protection of patent holders.
The scope of vicarious liability is arguably broader than the textual meaning of “actively induce” of § 271(b) because the “active inducement” excludes causative omissions that vicarious liability may include. I argue that induced infringement of § 271(b) should encompass all vicarious liability situations as an exception. Such a broad and relaxed interpretation may be justified by a defendant’s special right and ability to supervise infringing activities and his direct financial interest in such activities.
IV. Proximate Causation Analysis for Induced Infringement
One of the most serious concerns about imposing strict liability on induced infringement will be that the scope of inducement may be over-expanded and thus may interfere with free trade of ‘innocent’ articles. This Note argues that proximate causation analysis, especially the foreseeability analysis, should substitute the specific intent requirement. Subpart A will summarize the legal causation analysis of tort law. Subpart B will justify the legal causation analysis for induced infringement. Subpart C will discuss an actual application in induced infringement contexts.
A. Proximate Causation Analysis in Tort Law
In tort law, a plaintiff must show that a defendant’s wrongful conduct is a cause of the harm the plaintiff suffers. The defendant’s wrongful conduct in fact causes the damages if but for the wrongful conduct, the plaintiff would not have suffered such damages. But the plaintiff cannot establish the legal causation by merely showing that the defendant’s wrongful conduct is the “but-for cause” of the damages. Courts also require proof that the wrongful conduct is the “proximate” cause of the damages. Proximate causation analysis asks whether the defendant’s conduct is too remotely connected to the damages to fairly impose responsibility on the defendant. This is a policy-based safeguard against counterintuitive expansion of liability that would follow from the mechanical but-for analysis. In his famous dissenting opinion of Palsgraf v. The Long Island Railroad Company, Justice Andrews explained: “What we do mean by the word “proximate” is, that because of convenience, of public policy, of a rough sense of justice, the law arbitrarily declines to trace a series of events beyond a certain point.”
The most common test for proximate causation is the foreseeability test, which focuses on whether the damages suffered by the plaintiff were reasonably foreseeable in light of the defendant’s wrongful conduct. It is not necessary to show that a particular accident and a particular damage were probable; it is sufficient if the accident is of a class that might well be anticipated as one of the reasonable and probable results of the wrongful act. In the context of strict liability, the foreseeability doctrine has been generalized to risk theory. If a defendant carries on an abnormally dangerous activity, which is subject to strict liability, the defendant is liable for any harm within the risk of the activity, i.e., any harm the activity commonly results in. Thus, a person conducting blasting operations on his land is liable for damages by flying debris or concussion, which are within the risks generally inherent in a blasting operation.
Proximate causation analysis which encompasses the foreseeability doctrine (or the risk theory) applies equally to strict product liability cases. Thus, a person selling cologne is liable for damages caused by combustion because it is foreseeable to the seller that the cologne, in its normal use, may be brought near a spark or flame. On the other hand, a manufacturer of a pair of safety glasses is not liable for a lathe operator’s injuries sustained when a severe blow by a steel bar broke the lens of the safety glasses because that exceeds what is reasonably foreseeable and what the lens was designed for.
The foreseeability doctrine is limited by the additional requirement that there be no superseding intervening force. An intervening force is one that joins with the defendant’s conduct to cause the injury and that occurs after the defendant’s conduct. An intervening force will only act to cut off proximate cause if it is characterized as superseding. Superseding intervening forces are new forces which are extraordinary and unexpected. The test is whether the intervening act and the injury resulting from it are of such a character that the primarily negligent party should have reasonably anticipated them in light of the attendant circumstances. It is not necessary that the actor should have contemplated the particular chain of events that occurred, but only that the injury at the hand of the intervening party was within the general range of consequences which any reasonable person might foresee as a natural and probable consequence of the negligent act.
In strict product liability cases, a defendant’s intentional misuse of a product is one type of such superseding intervening force. In Schwartz v. American Honda Motor Co., the Seventh Circuit applying Illinois law stated that a plaintiff’s conduct can bar relief in a strict product liability case if his actions constitute a “misuse” that is not reasonably foreseeable to a reasonably prudent manufacturer. Thus, a rider of a motorcycle who put his foot to the ground or near the rear wheel may not be able to recover damages if such use constitutes an improper use. In Venezia v. Miller Brewing Co., the Eighth Circuit, applying Massachusetts law, ruled similarly that a manufacturer is not liable for injuries sustained by an individual coming into contact with “rough edges” created by his own intentional misuse of an otherwise “fit” product in a manner in no reasonable way related to the intended uses of the product. Thus, neither a brewer nor a manufacturer were liable for injuries sustained by an eight-year-old child who threw a beer bottle against a nearby telephone pole, because such an act is clearly beyond the ordinary use intended for the product.
B. Justifications for Using Proximate Causation Analysis for Induced Infringement
Proximate causation analysis, especially the foreseeability analysis, has benefits over the current specific intent requirement. First, proximate causation analysis is better supported by the text of § 271(b), especially by the terms “actively” and “induces,” than the specific intent element. The dictionary definition of the term “induce” uses plenty of words to indicate causation, such as “lead on,” “influence,” “bring on or about,” “effect,” “cause,” etc. Its connotation of causation is much more explicit than that of a specific intent. Further, the term “actively” better fits causation analysis than the specific intent determination. The term “actively,” in combination with “induce,” effectively excludes causative omissions from the scope of § 271(b), whereas the term is foreign in the context of the specific intent requirement. Given such solid textual supports for the causation element, proximate causation analysis, which is a necessary tool for determination of causation, deserves more emphasis than the non-textual specific intent requirement.
Second, the proximate causation requirement does not thwart the strict liability scheme of patent law. It instead considers objective factors which have nothing to do with infringers’ knowledge or intent, and thereby the integrity of the strict liability scheme of patent law remains intact. It follows that proximate causation requirement can avoid all the doctrinal and practical problems of the current specific intent requirement, which are discussed above in Part III.D. Proximate causation analysis is consistent with the utilitarian rationales of patent law in that it prohibits activities which result in infringement and thus ensures patent holders to enjoy the full economic benefit of their patents, whereas the specific intent requirement carves out careless inducers’ activities from the scope of protection. It is also consistent with the basic risk allocation in that it imposes market participants a burden to search relevant patents which their activities may directly infringe or cause another to infringe. The specific intent requirement, on the contrary, confuses market participants by incentivizing them not to read patents which may implicate them with induced infringement liabilities.
Third, we may borrow the extensive case law for proximate causation analysis from tort law and thus we do not have to wrestle with the unique and undefined concept of a specific intent for induced infringement. Parties will be incentivized to settle their disputes under the well-defined concept of proximate causation. Courts will save a significant amount of judicial efforts and resources. Practitioners will enjoy benefits of having more detailed and extensive case law on the key issue of induced infringement cases. Suggested applications follow in Subpart C below.
Fourth, proximate causation analysis properly reflects various policy considerations, which enables an individualized and case-specific approach for induced infringement. The scope of induced infringement can thus be properly adapted to industrial characteristics, technical developments and to societal changes. Commentators’ concerns such as over-deterrence or anti-competitive consequences may be avoided through the flexibility of proximate causation analysis.
C. Application of Proximate Causation Analysis for Induced Infringement
Suppose Patentee A has a patent for a pharmaceutical composition comprising a certain amount of Compound X. Compound X has a substantial non-infringing use as a component of a laundry detergent. Seller B sells purified Compound X, and Direct Infringer C uses B’s Compound X in making the patented pharmaceutical composition without any authorization from Patentee A. In order to determine whether Seller B’s sale of purified Compound X proximately causes Direct Infringer C’s infringement, it must be determined whether C’s infringing activity is a foreseeable consequence of B’s sale of purified Compound X. The following factors may be taken into account in the foreseeability analysis.
First, the nature of Seller B’s product, purified Compound X, will be an important factor. If purified Compound X was somehow adapted to an infringing use better than to a non-infringing use, it may indicate that direct infringement is a foreseeable consequence resulting from the sale of the product. For example, if Seller B’s Compound X is unnecessarily pure and overly expensive for laundry detergent uses, and if the high purity of Compound X is better suited to pharmaceutical uses, then it can be said that the sale of the purified Compound X creates a high risk of direct infringement. In such circumstances, Buyer C’s direct infringement may be a foreseeable consequence of the sale of the purified Compound X, and thus Seller B may be held liable for inducement.
Braintree Laboratories, Inc. v. Nephro-Tech, Inc. dealt with a similar situation. The defendant in Braintree sold calcium acetate which had an infringing use of treating kidney dialysis patients as well as a non-infringing use for calcium supplement. Calcium acetate was a “less-than-optimal” choice as a calcium supplement due to the high levels of the product that would need to be ingested to effect calcium supplementation. The Kansas District Court held that such circumstances could support the jury’s conclusion that the product was actually being marketed for an infringing use. The court inferred the defendant’s specific intent from the sale of the product, but in the foreseeability analysis such sales may support the conclusion that the product created a risk of infringement.
Compound X’s relative proportion of infringing and non-infringing uses may also be taken into account. One method is to look at the demographics of buyers of Seller B’s purified Compound X. If most of the buyers were pharmaceutical manufacturers and only few of them were detergent manufacturers, it would indirectly indicate that direct infringement of Patentee A’s patent was a foreseeable consequence of the sale of purified Compound X. But there may be cases where such tracking of Seller B’s products is impossible. In that case, relative market sizes of the pharmaceuticals using Compound X and the detergents using Compound X may provide one clue. If the market of the pharmaceuticals using Compound X is substantially larger than that of the detergent using Compound X, it may indirectly imply that direct infringement was a foreseeable consequence from the sale of Compound X.
Such quantitative comparison between the amount of infringing use and the amount of non-infringing use is not foreign to the induced infringement doctrine. In MGM Studios Inc. v. Grokster, Ltd., a copyright case, a survey identified that 75% of the files available through the defendants’ software were copyrighted works owned or controlled by the plaintiffs and that 15% of the files were likely copyrighted. As to the remaining 10% of the files, “there was not enough information to form reasonable conclusions either as to what those files even consisted of, and/or whether they were infringing or non-infringing.” With the survey data, Justice Ginsberg determined that the defendants’ software did not have substantial non-infringing uses because the “overwhelming” use of the software was for infringement. In foreseeability analysis, such circumstances will strongly support a reasonable foreseeability of infringement.
The nature of direct infringers provides another clue regarding foreseeability. In the above hypothetical, the direct infringers are pharmaceutical companies who are making a pharmaceutical composition containing Compound X. Pharmaceutical companies are highly sophisticated parties, who usually have sufficient resources to discover Patentee A’s patent and sufficient bargaining and financial power to seek authorization from Patentee A. Thus, it may not be a foreseeable consequence that a pharmaceutical company produces the patented composition without seeking a license from Patentee A. On the other hand, if a patented invention is a method which the general public can easily practice given adequate equipment, a seller of the equipment may likely be subject to induced infringement liability because it is unconceivable that each and every member of the general public seeks authorization of the patent holder. In other words, direct infringement by members of the general public is a highly foreseeable consequence of selling the equipment. The tort principle of strict product liability usually considers the user’s ability and awareness in determining whether the accused product has a design defect, and in induced infringement, a parallel analysis may be used in determining whether an accused infringer created a risk of direct infringement.
Induced infringement always involves a third party’s direct infringement, so the nature of the direct infringement must also be considered in determining foreseeability. If the third party’s activity amounts to a superseding intervening force, it is beyond the foreseeable consequences and thus breaks the chain of proximate causation. For example, if Seller B sold purified Compound X which by itself cannot be used in a pharmaceutical composition, and if Buyer C converted the Compound X to Compound Y in order to copy the patented composition, such conversion is probably beyond reasonable anticipation and the infringement liability should solely be imposed on Buyer C. But if the Compound X is useless by itself and its utility can only be attained by converting it to Compound Y, Buyer C’s conversion can hardly qualify as a superseding intervening force. The key is whether such a conversion reasonably fits into the proper use of Compound X. The inquiry conforms to the test of the misuse doctrine in strict product liability.
In DSU Medical Corp. v. JMS Co., the accused inducer (ITL) sold a needle guard in its open-shell configuration; ITL had acquired counsel’s opinion of non-infringement. The needle guard was assembled in a foreign country into an infringing closed-shell configuration, and the direct infringer (JMS) imported the closed-shell needle guard into the United States. The jury found ITL did not have the requisite intent to cause infringement, and the Federal Circuit upheld the district court’s denial of the motion for new trial. If the foreseeability analysis applies, the counsel’s opinion is irrelevant and the key question becomes whether the assembly into a closed-shell configuration is objectively within the proper use of the needle guard as ITL sold it.
Induced infringement may involve another third party who imports and distributes the products to the United States. Seller B may have sold its purified Compound X only in a foreign country, and Buyer C may have purchased the Compound X from a distributor who imported the Compound X into the United States. Now the question is whether the distributor’s activity constitutes a superseding intervening force, and the answer will depend on the circumstances surrounding the importation. If Seller B tightly confines its sale of purified Compound X to a distributer who promises to resell it only in the foreign country, it will be beyond reasonable expectation that the distributer breaches the duty and imports Compound X into the United States. In that case, Seller B may be off the hook because the infringement in the United States is not a foreseeable consequence from his sale of Compound X within the foreign country. On the contrary, importation into the United States can hardly qualify as a superseding intervening force if such importation is within the usual and natural commercial flow of Compound X. For example, in Global-Tech Appliances, Inc. v. SEB S.A., the accused inducer supplied infringing products to various distributors who were conducting a significant amount of business in the United States. Such circumstance may indicate that importation of the infringing products into the United States was a foreseeable consequence from the sale of the products. Thus, the accused inducer may be held liable even if he sold the infringing products only within the foreign country.
The specific intent requirement for § 271(b) should be abolished. The language of § 271(b) does not provide any textual support for the specific intent requirement. The specific intent requirement is contrary to the early development of the case law before the enactment of the 1952 Patent Act, which put no emphasis on the mental state of a defendant. It is in conflict with many aspects of patent law including the utilitarian policies, the doctrine of equivalents and the basic risk allocation. Nor does the overlapping scope of § 271(b) and § 271(c) necessitate the specific intent requirement because Congress intended § 271(b) with its generic language to cover a broader scope of indirect infringement than the specific situation of § 271(c). Instead, inducement of § 271(b) should be considered as a strict liability claim. The tort principles of strict product liability and vicarious liability well support such strict liability with overlapping policy considerations.
Proximate causation analysis from tort law betters fits the induced infringement doctrine than the specific intent requirement. Proximate causation analysis is well supported by the text of § 271(b). It maintains the strict liability scheme of patent law intact and thus avoids all the doctrinal and practical problems which the current specific intent requirement causes. Proximate causation analysis brings the extensive case law from tort law, which benefits parties, courts and practitioners by providing sufficient authorities. Proximate causation analysis is flexible enough to adequately safeguard against over-expansion of the scope of inducement.
* J.D. candidate, University of California, Hastings College of the Law, 2012; B.S. Life Science, Pohang University of Science and Technology, 2005. The author would like to thank Professor Jason Rantanen, the University of Iowa, College of Law, and Professor Jeffrey Lefstin, University of California, Hastings College of the Law, for their thoughtful comments and advice on a draft of this Note. The author would also like to thank the editors of the Hastings Science & Technology Law Journal for their careful review on this Note.
. 35 U.S.C. § 154(a)(1) (1996).
. 35 U.S.C. § 271(a) (1994).
. Fla. Prepaid Postsecondary Educ. Expense Bd. v. Coll. Sav. Bank, 527 U.S. 627, 645 (1999) (“Actions predicated on direct patent infringement, . . . do not require any showing of intent to infringe; instead, knowledge and intent are considered only with respect to damages.”).
. Robert P. Merges et al., Intellectual Property in the New Technological Age 133–34 (5th ed. 2010).
. Graver Tank & Mfg. Co. v. Linde Air Products Co., 335 U.S. 605, 608 (1950).
. Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 40 (1997).
. Graver Tank, 339 U.S. at 607.
. Warner-Jenkinson, 520 U.S. at 41(“Application of the doctrine of equivalents . . . is akin to determining literal infringement, and neither requires proof of intent. . . . [I]ntent plays no role in the application of the doctrine of equivalents.”).
. Hereinafter, § 271(b) and § 271(c) refer to 35 U.S.C. § 271(b) and (c), respectively.
. Courts hold that both induced infringement and contributory infringement require the existence of direct infringement. See, e.g., RF Del., Inc. v. Pac. Keystone Tech., Inc., 326 F.3d 1255, 1268, (Fed. Cir. 2003) (“[L]iability for either active inducement of infringement or for contributory infringement is dependent upon the existence of direct infringement . . . .”); Epcon Gas Sys., Inc. v. Bauer Compressors, Inc., 279 F.3d 1022, 1033 (Fed. Cir. 2002) (“It is well settled that there can be no inducement of infringement without direct infringement by some party . . . . A finding of contributory infringement likewise requires underlying proof of direct infringement.”).
. Charles W. Adams, Indirect Infringement from a Tort Law Perspective, 42 U. Rich. L. Rev. 635, 650 (2008).
. See, e.g., Thomson-Houston Elec. Co. v. Ohio Brass Co., 80 F. 712, 721 (6th Cir. 1897) (“Many of the most valuable patents are combinations of nonpatentable elements, and the only effective mode of preventing infringement is by suits against those who, by furnishing the parts which distinguish the combination, make it possible for others to assemble and use the combination, . . .”); Mark A. Lemley, Inducing Patent Infringement, 39 U.C. Davis L. Rev. 225, 228 (2005).
. Donald S. Chisum, Chisum on Patents § 17.04 (2010).
. Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2068–69 (2011).
. 909 F.2d 1464, 1469 (Fed. Cir. 1990).
. Lemley, supra note 13, at 238.
. 917 F.2d 544, 552 (Fed. Cir. 1990).
. Lemley, supra note 13, at 240.
. 471 F.3d 1293, 1306 (Fed. Cir. 2006) (en banc as to “Section III.B”).
. 594 F.3d 1360, 1376–77 (Fed. Cir. 2010) (upheld but with a different specific intent standard in Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011)).
. See, e.g., Global-Tech Appliances, Inc. v. SEB S.A.: Brief Amici Curiae of 26 Law, Economics, and Business Professors in Support of Petitioners, 2010 WL 3019717 (2010).
. 131 S. Ct. 2060 (2011).
. Id. at 2068.
. Id. at 2065–67.
. 377 U.S. 476 (1964).
. Id. at 2067–68.
. Id. at 2068.
. Id. at 2068–69.
. Id. at 2070.
. Id. at 2071.
. Id. at 2065 (When a person actively induces another to take some action, the inducer obviously knows the action that he or she wishes to bring about.).
. Id. at 2068.
. Id. at 2067–68.
. Id. at 2068–69.
. Michael N. Rader, Toward a Coherent Law of Inducement to Infringe; Why the Federal Circuit Should Adopt the Hewlett-Packard Standard for Intent Under § 271(b), 10 Fed. Circuit B.J. 299, 301 (2000).
. Id. at 330–333.
. Lemley, supra note 13, at 242.
. Id. at 244.
. Id. at 242–43.
. Timothy R. Holbrook, The Intent Element of Induced Infringement, 22 Santa Clara Computer & High Tech. L.J. 399, 408–409 (2006).
. Id. at 408.
. Id. at 409.
. Lynda J. Oswald, 21st Century Copyright Law in the Digital Domain Symposium: Symposium Article: The Intent Element of “Inducement to Infringe” under Patent Law: Reflections on Grokster, 13 Mich. Telecomm. Tech. L. Rev. 225, 241–42 (2006).
. Id. at 243–46.
. Jason A. Rantanen, An Objective View of Fault in Patent Infringement, 60 Am. U.L. Rev. 1575, 1625–33 (2011).
. Id. at 1622–23.
. Id. at 1625–32.
. Id. at 1607–09.
. Professor Oswald deviates from this general tendency by emphasizing discrepancies between the strict liability regime of direct infringement and the specific intent requirement (such as the one in Manville) of induced infringement. Oswald, supra note 46, at 245. However, it is unclear whether she proposes abolishment of the entire specific intent element from the induced infringement doctrine. See id. at 243 (arguing for an objective standard evaluating what the defendant knew or should have known).
. Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2065 (2011) (“Although the text of § 271(b) makes no mention of intent, we infer that at least some intent is required.”); Tegal Corp. v. Tokyo electron Co., Ltd., 248 F.3d 1376, 1378–79 (Fed. Cir. 2001) (“Of course inducement has connotations of active steps knowingly taken—knowingly at least in the sense of purposeful, intentional as distinguished from accidental or inadvertent.”).
. Lemley, supra note 13, at 235.
. Global-Tech, 131 S. Ct. at 2068; Holbrook, supra note 43, at 408; Global-Tech Appliances, Inc. v. SEB S.A.: Brief Amici Curiae of 26 Law, Economics, and Business Professors in Support of Petitioners, 2010 WL 3019717 (2010).
. Holbrook, supra note 43, at 408–410; Rantanen, supra note 48, at 1625.
. 131 S. Ct. at 2065.
. 503 U.S. 249, 253–54 (1992).
. Id. at 253.
. Webster’s New International Dictionary 1269 (2d ed. 1956) (emphasis in the original).
. 131 S. Ct. 2060, 2065 (2011).
. 15 U.S.C. § 13(f) (emphasis added).
. United States v. X-Citement Video, Inc., 513 U.S. 64, 68 (1994) (holding that courts should “give effect, if possible, to every clause and word of a statute, avoiding, if it may be, any construction which implies that the legislature was ignorant of the meaning of the language it employed.”).
. Webster’s New International Dictionary 27 (2d ed. 1956). Further, the term “active” does not have any intent component either. Id.
. In this regard, the Court in Global-Tech correctly mentions that “[t]he addition of the adverb ‘actively’ suggests that the inducement must involve the taking of affirmative steps to bring about the desired result.” 131 S. Ct at 2065.
. 131 S. Ct. at 2065.
. See Thomson-Houston Electric Co. v. Ohio Brass Co., 80 F. 712, 721 (6th Cir. 1897) (“An infringement of a patent is a tort analogous to trespass or trespass on the case. From the earliest times, all who take part in a trespass, either by actual participation therein or by aiding and abetting it, have been held to be jointly and severally liable for the injury inflicted.”); Hewlett-Packard Co. v. Bausch & Lomb Inc., 909 F.2d 1464, 1469 (Fed. Cir. 1990) (“liability was under a theory of joint tortfeasance, wherein one who intentionally caused, or aided and abetted, the commission of a tort by another was jointly and severally liable with the primary tortfeasor . . . .”); Chisum, supra note 14, § 17.02.
. Restatement (Second) of Torts § 876 (1979).
. Carter v. United States, 530 U.S. 255, 268 (2000) (explaining United States v. Lewis, 628 F.2d 1276 (10th Cir. 1980), “this defendant knowingly engaged in the acts of using force and taking money (satisfying ‘general intent’), he did not intend permanently to deprive the bank of its possession of the money (failing to satisfy ‘specific intent’)”).
. E.g., New York Scaffolding Co. v. Whitney, 224 F. 452, 459 (8th Cir. 1915) (“One who makes and sells articles which are only adapted to be used in a patented combination will be presumed to intend the natural consequences of his acts . . . .”); Henry v. A.B. Dick Co., 224 U.S. 1, 49 (1912) (“The fair interpretation of the facts stated is that the sale was with the purpose and intent that it would be so used.”); Alabastine v. Payne, 27 F. 559, 560 (C.C.N.D.N.Y. 1886) (“In selling a compound which he knows cannot be practically applied without making the user a trespasser, the defendant . . . renders himself an accessory to the infringement.”).
. 29 F. Cas. 74 (C.C.D. Conn. 1871).
. Id. at 79.
. Id. at 80.
. Id. at 80.
. In tort law, acting in concert does not require an explicit agreement or conspiracy. An implicit agreement with subsequent actions according to the agreement is enough. For example, if two defendants race their automobiles and one injures plaintiff, both defendants are jointly and severally liable because they act in concert. Bierczynski v. Rogers, 239 A.2d 218 (Del. Super. Ct. 1968).
. 80 F. 712, 720 (6th Cir. 1897).
. Id. at 721.
. E.g., Phillips Petroleum Co. v. Kerotest Mfg. Co., 81 F.2d 339 (3d Cir. 1935) (“The defendant is a manufacturer of devices for effecting the same functional objects as do the patents in suit,” and thus “if their device infringes, they are contributory infringers, for the proofs show they have continuously been selling their devices to the oil well trade since Oct., 1931.”); Thomson-Houston Electr. Co. v. Kelsey Electr. R. Specialty Co., 75 F. 1005 (2d Cir. 1896) (the lower court issued an injunction holding that “the defendant was selling stands capable of, and designed for, an unlawful use, and that, inasmuch as they are useful only for the purpose of performing functions involved in the operation of the patent, there was a presumption of an intention that these stands should be so used, which was not dispelled by the affidavits,” and the appellate court did not reject the holding but modified the injunction to exclude replacement and substitution of broken trolley stands).
. 21 F. Cas. 593, 594 (C.C.D. Mass. 1875).
. Id. (emphasis added).
. 3 F. Cas. 1070 (C.C.D. Mass. 1878).
. Id. at 1071.
. Some commentators presume that the court knew the saponine extract had other non-infringing uses. See, e.g., Adams, supra note 11, at 652; Rantanen, supra note 48, 1597 note 122. But the court in Bowker did not expressly mention any non-infringing uses, which obscures the scope of the decision. It is possible that the court considered the saponine extract novel or that the lawyer for the plaintiff did not show non-infringing uses.
. 3 F. Cas. at 1071.
. See note 94.
. In fact, the Bowker decision did not distinguish the case from Wallace. 3 F. Cas at 1071.
. See Thomson-Houston Electr. Co. v. Ohio Brass Co., 80 F. 712 (6th Cir. 1897); Travers v. Beyer, 26 F. 450 (C.C.N.D.N.Y. 1886); Phillips Petroleum Co. v. Kerotest Mfg. Co., 81 F.2d 339 (3d Cir. 1935); Thomson-Houston Electr. Co. v. Kelsey Electr. R. Specialty Co., 75 F. 1005 (2d Cir. 1896). Those cases were discussed above.
. 68 F.2d 175, 176 (9th Cir. 1933).
. Id. at 189.
. Id. at 180.
. 297 F. 733 (2d Cir. 1924).
. Id. at 735.
. Id. at 740.
. 106 U.S. 89, 90–91 (1882).
. Id. at 94.
. Id. at 94–95.
. 224 U.S. 1, 11–12 (1912).
. Id. at 50.
. Id. at 49 (emphasis added).
. Such divergence may be due to fundamental inconsistencies between the specific intent requirement and the rationale behind the contributory infringement doctrine. Detailed discussion will follow in Subpart B.
. Some commentators regard Bowker as a representative case which held a seller of staple articles liable for contributory infringement. See Rantanen, supra note 48, at 1597, note 122. As discussed above, however, the factual uncertainty seriously undermines its significance.
. The relevant legislative history acknowledged and adopted the case law developed before the enactment of the 1952 Patent Act. S. Rep. No. 32-1979, at 8 (1952); H.R. Rep. No. 82-1923, at 9 (1952) (“The doctrine of contributory infringement has been part of our law for about 80 years. . . . The purpose of this section is to codify in statutory form principles of contributory infringement. . . .”).
. 131 S. Ct. at 2068.
. See Holbrook, supra note 43, at 408; Global-Tech Appliances, Inc. v. SEB S.A.: Brief Amici Curiae of 26 Law, Economics, and Business Professors in Support of Petitioners, 2010 WL 3019717 (2010).
. Chisum, supra note 14, § 17.04; Jervis B. Webb Co. v. Southern Sys. Inc., 495 F. Supp. 145, 146 (E.D. Mich. 1980); Digital Equip. Corp. v. Electronic Memories & Magnetics Corp., 452 F. Supp. 1262, 1265 n.9 (D. Mass. 1978).
. S. Rep. No. 32-1979, at 8 (1952); H.R. Rep. No. 82-1923, at 9 (1952) (emphasis added).
. See, e.g., Thomson-Houston Electric Co. v. Ohio Brass Co., 80 F. 712 (6th Cir. 1897); Phillips Petroleum Co. v. Kerotest Mfg. Co., 81 F.2d 339 (3d Cir. 1935); Westinghouse Elec. & Mfg. Co. v. Precise Mfg. Corp., 11 F.2d 209 (2d Cir. 1926). Those cases were discussed in Subpart A.
. Rantanen, supra note 48, at 1625, note 271 (arguing that contributory infringement can be viewed as a narrower but more clearly defined subset of induced infringement).
. Professor Rantanen analogize the relationship between § 271(b) and § 271(c) to the relationship between an independent claim and a dependent claim, which the former does not render the latter superfluous. Id; see also, Chisum, supra note 14, § 17.04.
. 35 U.S.C. § 271(c).
. Lemley, supra note 13, at 242–43.
. Holbrook, supra note 43, at 408–09.
. Rantanen, supra note 48, at 1626.
. This Note proposes the proximate causation analysis as an alternative. A detailed discussion is in Part IV.
. E.g., Lemley, supra note 13, at 243 (arguing that it is unreasonable to hold mere facilitators liable if they did not in fact know that the act they were encouraging was wrong); Holbrook, supra note 43, at 408 (arguing that truly culpable parties are those that intend to induce infringement and that to hold otherwise would penalize a “good” actor who holds a belief that the others are not directly infringing).
. See 35 U.S.C. §§154(a)(1) and 271(a).
. Merges, supra note 4, at 133.
. See Bonito Boats Inc. v. Thunder Craft Boats Inc., 489 U.S. 141, 164–65 (1989).
. Graver Tank & Mfg. Co. v. Linde Air Products Co., 335 U.S. 605, 607 (1950).
. Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 40 (1997) (“Application of the doctrine of equivalents . . . is akin to determining literal infringement, and neither requires proof of intent. . . . [I]ntent plays no role in the application of the doctrine of equivalents.”).
. The test is whether the potentially infringing product or process contains elements identical or equivalent to each claimed element of the patented invention. Id. at 41.
. Lemley, supra note 13, at 228.
. Chisum, supra note 14, § 17.04.
. If a defendant is completely careless, it does not satisfy “willful blindness” of Global-Tech. See Global-Tech Appliances, Inc. v. SEB S.A.131 S. Ct. 2060, 2070 (2011).
. See Oswald, supra note 46, at 244.
. It may be unpractical to obligate market participants to search each and every relevant patent. See Lemley, supra note 13, at 235-36. But the risk of injury should fall on a defendant, not on a patent holder. See Oswald, supra note 46, at 244–45.
. Seller D’s advertisement will easily prove the required knowledge under Global-Tech because D advertised his or her product can copy the patented drug. On the other hand, Seller E’s mental state does not amount to willful blindness because E did not subjectively believe that there is a high probability of patent infringement nor did E take any deliberate actions to avoid learning of the infringement. See Global-Tech Appliances, Inc. v. SEB S.A.131 S. Ct. 2060, 2070 (2011).
. In this regard, mere deliberate ignorance of a patent does not likely satisfy the “willful blindness” threshold of Global-Tech because it does not amount to subjective belief of a high probability of infringement.
. Holbrook, supra note 43, at 408–09.
. Rantanen, supra note 48, at 1626.
. See, e.g., Holbrook, supra note 43, at 408 (arguing the contributory infringement doctrine should not create a windfall for patentees against innocent parties).
. Restatement (Second) Torts § 402A provides:
(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if (a) the seller is engaged in the business of selling such a product, and (b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.
(2) The rule stated in Subsection (1) applies although (a) the seller has exercised all possible care in the preparation and sale of his product, and (b) the user or consumer has not bought the product from or entered into any contractual relation with the seller.
Restatement (Second) Torts § 402A (1979).
. Lee v. Crookston Coca-Cola Bottling Co., 290 Minn. 321, 329 (1971).
. Id. at 327–28.
. The strict product liability acknowledges three types of defects: manufacturing defect, design defect and warning defect. John L. Diamond, Cases and Materials on Torts, 531 (2d ed. 2001). An infringing use of a product may be analogized to a design defect since it is an error in its design or blueprint. It may as well be a warning defect if the product does not contain enough warnings to avoid possible patent infringements.
. Diamond, supra note 150, at 638.
. Id. at 639.
. Id. at 638–39.
. Rodgers v. Kemper Constr. Co., 50 Cal. App. 3d 608, 618 (4th Dist. 1975).
. 498 F.3d 1373 (Fed. Cir. 2007).
. Id. at 1379 (emphasis added).
. See MGM Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 929–30 (2005) (“When a widely shared service or product is used to commit infringement, it may be impossible to enforce rights in the protected work effectively against all direct infringers, the only practical alternative being to go against the distributor of the copying device for secondary liability on a theory of contributory or vicarious infringement.”).
. See, e.g., General Electric Co. v. De Forest, 28 F.2d 641 (3d Cir. 1928); Water Technologies Corp. v. Calco, Ltd., 850 F.2d 660 (Fed Cir. 1988); Toppan v. Tiffany Refrigerator Car Co., 39 F. 420 (C.C.N.D. Ill. 1889).
. See Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1569 (Fed. Cir. 1994).
. The Ninth Circuit found vicarious liability for copyright infringement when the defendants had control over direct infringers and had a direct financial interest in the infringing activity. See Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259 (9th Cir. 1996). (Such a special relationship creates an affirmative duty to prevent infringement, and breach of that duty may be treated substantially same to unlawful commission in the meaning of “active inducement.”).
. Diamond, supra note 150, at 238.
. Id. at 238–39.
. Palsgraf v. The Long Island Ry. Co., 248 N.Y. 339, 352 (1928) (Andrews, J., dissenting).
. H. L. A. Hart & Tony Honorè, Causation in the Law, 254 (2d ed. 1985).
. Id. at 257 (citing Haynes v. Harwood  1 KB 146, 156 per Greer LJ; Pollock 38 LQR 165, 167 (1922)).
. Id. at 286.
. Whitman Hotel Island R. Co. v. Elliott & Watrous Eng’r Co., 137 Conn. 562 (1951).
. Restatement (Third) of Torts: Product Liability § 15 (1998) (“Whether a product defect caused harm to persons or property is determined by the prevailing rules and principles governing causation in tort.”).
. Moran v. Faberge, Inc., 332 A.2d 11 (Md. 1975).
. American Optical Co. v. Weidenhamer, 457 N.E.2d 181, 186 (1983).
. Diamond, supra note 150, at 261.
. Shepard v. S.C. Dep’t of Corr., 299 S.C. 370, 375 (S.C.Ct.App. 1989).
. 710 F.2d 378, 380 (7th Cir. 1983).
. 626 F.2d 188, 192 (1st Cir. 1980).
. Id. at 190–91.
. See Webster’s New International Dictionary 1269 (2d ed. 1956).
. See Global-Tech Appliances, Inc. v. SEB S.A.131 S. Ct. 2056, 2070 (2011) (“The addition of the adverb ‘actively’ suggests that the inducement must involve the taking of affirmative steps to bring about the desired result.”).
. Palsgraf v. The Long Island Ry. Co., 248 N.Y. 339, 352 (1928) (Andrews, J., dissenting).
. Rantanen, supra note 48, at 1626.
. Holbrook, supra note 43, at 408–9.
. 81 F. Supp. 2d 1122 (D. Kan. 2000).
. Id. at 1126.
. Id. at 1130–31.
. Id. at 1130.
. 545 U.S. 913, 947 n.3 (2005) (Ginsberg J., concurring).
. In Cepeda v. Cumberland Engineering Co., the New Jersey Supreme Court endorsed Professor Wade’s list factors in determining whether the product has a defect. 76 N.J. 152, 173 (1978) (citing John W. Wade, On the Nature of Strict Liability for Products, 44 Miss L.J. 825 (1973)). The factors include “the user’s ability to avoid danger by the exercise of care in the use of the product” and “the user’s anticipated awareness of the dangers inherent in the product and their avoidability.” Id. at 174.
. 471 F.3d 1293, 1302 (Fed. Cir. 2006).
. Id. at 1307.
. 131 S. Ct. 2060, 2064 (2011).