Academic journal article Santa Clara High Technology Law Journal

The Intent Element of Induced Infringement

Academic journal article Santa Clara High Technology Law Journal

The Intent Element of Induced Infringement

Article excerpt

I. INTRODUCTION

The expectation when the Supreme Court granted certiorari in MGM Studios Inc. v. Grokster, Ltd. (1) was that the Court would explore the contours of its decision in Sony Corp. v. Universal City Studios, Inc. (2) And in fact the Court did just that, but not in the manner most expected or hoped. To the surprise of many--and consternation of some--the Court imported 35 U.S.C. [section] 271(b) active inducement from patent law into copyright law (3) just as it had imported 35 U.S.C. [section] 271(c) contributory infringement in Sony. (4)

In so doing, the Court avoided addressing the language in Sony that precluded contributory copyright infringement for devices that are "capable of substantial noninfringing uses." (5) This judicial-sidestepping has interesting implications for active inducement law, now both in patent and copyright law. Particularly, the Supreme Court's concern with the seemingly nefarious intent of Grokster highlights the important and uncertain role of intent in assessing infringement under section 271(b).

Part I of this essay discusses the intent standard and articulates what the proper standard should be--an intent to induce infringement. Part II provides a brief summary of indirect infringement in patent law under sections 271(b) and (c), followed by a summary of the Grokster. Part III explains the current split in authority at the Federal Circuit and explores the substantive differences between the two standards. The Essay posits that the proper standard should require that the inducer have an intent to induce infringement, not merely intent to induce acts that constitute infringement. The potential anticompetitive consequences of the broader rule and the risk of punishing innocent actors under an exceptional form of liability both commend the more exacting intent standard. Moreover, as overlooked in previous commentary, use of the narrower standard would only insulate the inducer from past liability; it would not protect the infringer from prospective relief, particularly a permanent injunction.

II. GROKSTER'S IMPORTATION OF PATENT'S "INDUCEMENT" THIRDPARTY LIABILITY INTO COPYRIGHT LAW

In order to assess the implications of the Supreme Court's importation of active inducement into patent law, a summary of the doctrinal features--and ambiguities--of active inducement is necessary. This review demonstrates that active inducement may not provide the clear answers that the Court believed it would.

A. A Summary of Indirect Infringement in Patent Law

Liability for active inducement of infringement and contributory infringement are variations of third-party liability, where one party is held liable for the directly infringing acts of others. The justifications for these rules are the same as those used to rationalize joint and several liability elsewhere in tort law: difficulty in suing the direct infringers because of their large numbers, their dispersed nature, their status as the patentee's customer, or their inability to compensate the patentee. (6) Also, the indirect infringer may be more morally culpable than the direct infringers. (7) Indeed, the inducers may be considerably more culpable in the patent infringement context because direct infringement is a strict liability offense. (8)

In patent law, the rules for third-party liability have been codified. (9) Section 271(b) proscribes the "active inducement" of patent infringement. While ambiguous, Congress intended this provision to be a codification of the common law that had developed up to this point. (10) Congress also enacted a narrower version of indirect infringement, labeled contributory infringement in section 271(c). A party is liable as an infringer if she supplies a component of a patented device "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. …

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