The following case illustrates how one company violated a competitor’s patent rights by copying their product.  SEB v. Pentalfa, 2009-1099 (Fed. Cir. Feb. 5, 2010). SEB held a patent directed to a deep fryer.  The patent claimed a way of manufacturing the exterior skirt of the deep fryer with an inexpensive ordinary grade plastic thereby reducing the cost of the deep fryer.  A ring of heat insulating and heat resistive material is mounted to the top of the skirt and an inner hot pan.  The skirt and hot pan is separated by an air space of sufficient width to insulate the skirt from the hot pan.

Pentalfa copied SEB’s deep fryer.  However, before manufacturing and selling the copy-cat product, Pentalfa obtained a “right-to-use study” from a patent attorney.  The patent attorney conducted a search but did not find SEB’s deep fryer patent.   The patent attorney provided a positive right-to-use opinion.  Despite the positive right to use opinion, the jury held that Pentalfa actively induced others to infringe SEB’s patent.  To be held liable for active inducement of infringement, the alleged infringer must have the specific intent to encourage another’s infringement.  Pentalfa contends that they did  not have the “specific intent” to encourage another’s infringement because they did not have actual knowledge of SEB’s deep fryer patent.

However, the Court held that the requisite specific intent does not require actual knowledge of the patent but may also include a deliberate indifference of a known risk that SEB held a patent.  In the present dispute, Pentalfa copied SEB’s deep fryer.  Pentalfa hired an attorney to conduct a right to use study but did not tell the patent attorney that it based its product on SEB’s deep fryer.  The Court indicated that the failure to inform one’s counsel of copying would be highly suggestive of deliberate indifference.  Also, the parties were sophisticated with respect to the patent system.  Hence, the Court held that Pentalfa actively induced others to infringe SEB’s patent.

Based on this case, if you copy another company’s product then you should inform your patent attorney of this fact.  Also, you should inform your patent attorney of the process by which the product was invented.  The purpose is to address the issue of patent infringement early during the process so that design around options can be implemented if possible.  Design arounds are alternative designs that avoid the patent yet retain the functional feature of the patented product.  Typically, it is less expensive to redesign at the manufacturing stage compared to the cost to recall, litigation and a pay out of damages to the patentee.

Should you have any questions, please feel free to contact me.

In a subsequent section of the opinion of Seagate Technology, the Court appeared to distinguish willful infringement based on pre-litigation conduct and post litigation conduct. In particular, a showing of objective recklessness is required for pre-litigation conduct. However, to allege post litigation willful infringement, the patentee must also seek a preliminary injunction. The Court stated “a patentee who does not attempt to stop an accused infringer’s activities in this manner should not be allowed to accrue enhances damages based solely on the infringer’s post filing conduct. Similarly, if a patentee attempts to secure injunctive relief but fails, it is likely the infringement did not rise to the level of recklessness.”

Also, the Court held that waiver of the attorney client privilege and work product with opinion counsel does not waive the attorney client privilege and work product with trial counsel.