September 30, 2015 Practice Points

Federal Circuit Addresses Willful Blindness Analysis in Suprema v. ITC

The court's opinion emphasizes that a finding of willful blindness ultimately turns on a totality-of-the-circumstances analysis.

By Jarrad Wood

On September 14, 2015, the Federal Circuit issued a non-precedential opinion in Suprema v. ITC. The court's opinion emphasizes that a finding of willful blindness ultimately turns on a totality-of-the-circumstances analysis.

The case, which reached the Federal Circuit on appeal from the International Trade Commission, focused on a set of patents relating to fingerprint scanning. In the underlying ITC action, Cross Match Technologies, Inc., alleged violations of section 337 against Suprema, Inc., and Mentalix, Inc. After finding that Suprema and Mentalix directly infringed one of the patents at issue and that Suprema had induced Mentalix's infringement, the ITC issued a cease-and-desist order and an exclusion order. On appeal, a Federal Circuit panel affirmed in part but vacated the ITC's inducement finding on the grounds that no inducement occurred if the imported items did not infringe at the time of importation.

On rehearing en banc, the Federal Circuit reversed the panel's decision, upholding the ITC's interpretation that induced infringement under section 337 covers infringement occurring after the time of importation. Chief Judge Prost, joined by Judges O'Malley and Reyna, heard the case on remand. Judge O'Malley announced the opinion of the court.

Suprema was Willfully Blind to Mentalix's Infringement
After affirming the commission's finding of direct infringement, the court addressed whether Suprema was willfully blind to Mentalix's infringement. Following Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2063 (2011), the court explained that inducement requires knowledge that the induced acts constitute patent infringement. This knowledge can be actual knowledge—or willful blindness. Willful blindness is established by (1) a subjective belief of a high probability that a fact exists and (2) deliberate action to avoid learning that fact. Citing Broadcom Corp. v. Qualcomm, Inc., 543 F.3d 683, 699 (Fed. Cir. 2008), the court confirmed that "[t]he requisite intent to induce infringement may be inferred from all of the circumstances, and may be established through circumstantial evidence."

Suprema Subjectively Believed in Probability that Mentalix Infringed Cross Match's Patent
The court cited a number of factual findings by the commission going to the first element of the willful-blindness analysis:

  • Suprema's admission that it researched and identified Cross Match's patents, which had overlapping inventors and assignees with the patent at issue;

  • Suprema was well aware of competitor products, and of Cross Match's prominence in the relevant market;

  • Suprema's market research was similar in scope to the analysis performed by the accused infringer in Global Tech; and

  • Substantial evidence that Suprema aided and abetted Mentalix in adapting Mentalix's software to practice Cross Match's patent.

The court also rejected the idea that parties must seek out every reference in a competitor's patent. In this case, market research and similarities in the "content, inventorship, and ownership" between the infringed patent and other patents involved in the case provided the required substantial evidence.

Suprema Took Deliberate Action to Avoid Learning that Mentalix Infringed Cross Match's Patent
The court also affirmed the commission's finding that Suprema deliberately avoided learning that Suprema's "own accused products would likely infringe Cross Match's patents." The court focused on Suprema's failure to obtain an opinion of counsel as evidence of Suprema's willful blindness. The failure to obtain an opinion of counsel, the court explained, goes to state of mind; however, the failure to obtain an opinion of counsel is not dispositive of willful blindness, and an "opinion of counsel is not required to avoid a finding of induced infringement."

In a footnote, the court addressed section 298 of the AIA, which forbids using the failure to obtain an opinion of counsel as evidence of induced infringement, by noting that "[b]ecause the AIA only applies to patents issued on or after September 16, 2012, and the [patents at issue] issued in 2007, this provision does not control here."

Suprema confirms that the willful-blindness analysis is not amenable to bright-line rules or dispositive facts, but requires thoughtful consideration of all relevant factors on a case-by-case basis. The court's opinion will also likely increase the value of opinions of counsel.

Jarrad L. Wood is with Unified Patents in Washington, D.C.

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Jarrad Wood – September 30, 2015