Opinions of Patent Counsel as a Defense to Active Inducement Claims
By: THOMAS R. HIPKINS
A recent decision by the en banc Federal Circuit reinforced the value of opinions of patent counsel in defending against claims of active inducement. Before the court’s decision in DSU Medical Corp. v. JMS Co., a company had to be careful about encouraging its customers through advertising or instructional materials to use its products in specific ways, because doing so could open the door to active inducement liability if the use infringed a patent. This was true even if the company believed that those uses did not infringe. Now, according to DSU Medical, if the company reasonably believes that a specific use does not infringe, based on a patent counsel opinion, it can encourage that use as vigorously as the market demands without fear of active inducement liability.
DSU Medical’s Clarification of the Mens Rea Requirement for Active Inducement
Active inducement has always included a mens rea requirement—namely, the patentee must prove an intent to induce. For years, however, the Federal Circuit sent mixed signals concerning the meaning of intent to induce. Some cases used a less stringent standard—intent only to cause the act that resulted in infringement—while others used a more stringent standard—intent to actually cause the infringement.
In DSU Medical, the full Federal Circuit resolved this dispute, choosing the more stringent standard. The court stated,“[T]he plaintiff has the burden of showing that the alleged infringer’s actions induced infringing acts and that he knew or should have known his actions would induce actual infringement.”
In other words, if a company reasonably believes that using its product in the way it advertises or instructs does not infringe any patents, that company cannot be liable for active inducement.
The Impact of DSU Medical on the Value of Patent Counsel Opinions
By choosing the more stringent standard, DSU Medical reinforced the value of patent counsel opinions. The less stringent standard focused only on how vigorously a company encouraged its customers to use its products in the pertinent way. The company’s belief concerning whether that use was infringing did not matter. In contrast, the more stringent standard hinges on that belief. If the company’s belief in the innocence of its encouraged use is reasonable, there can be no liability for active inducement. And, if that belief is based on an opinion of patent counsel, it is much more likely to be found reasonable.
Indeed, DSU Medical’s application of the more stringent mens rea standard confirms the value of patent counsel opinions. A three-judge panel (the court went en banc only to resolve the mens rea dispute) found no liability for active inducement, concluding that the accused inducer’s belief in the innocence of his encouraged use was reasonable because it was based on patent counsel opinions.
Until the Federal Circuit’s en banc decision in DSU Medical, the uncertainty surrounding the mens rea requirement for active inducement translated into uncertainty of the value of patent counsel opinions in the same context. Now, with DSU Medical having chosen the more stringent standard, patent counsel opinions serve as a powerful weapon for defending against claims of active inducement.