In general, the reach of United States patent law does not extend beyond the territory of the United States. While not entirely clear, one notable exception to the territoriality rule is liability for inducement of infringement under Section 271(b) of the patent statute. Several courts have held that extraterritorial acts which result in infringement in the US constitute inducement of infringement and can subject a foreign company to US patent infringement liability.
The most common scenario in which this may occur is the sale of a product outside the US to a US-based customer with knowledge that the product will be imported into the United States. Section 271(b) provides that "[w]hoever actively induces infringement of a patent shall be liable as an infringer".
There have been different views as to what state of mind is required to "actively induce". While direct patent infringement is an "unintentional tort", it has long been the view of the US courts that active inducement requires some level of intent in order to meet the statute's "actively" standard. The divergence of views on intent have focused on whether the required intent is merely to cause the acts of the third party that constitute direct infringement, or whether it requires specific intent to encourage another's infringement.
In the case DSU Medical Corp vs JMS, the Court of Appeals for the Federal Circuit resolved this split of authority in an en banc decision. The specific question facing the court of appeals was whether the jury instruction provided by the trial court correctly described the intent requirement for inducement of infringement.
The instruction at issue was: "In order to induce infringement, there must first be an act of direct infringement and proof that the defendant knowingly induced infringement with the intent to encourage the infringement. The defendant must have intended to cause the acts that constitute the direct infringement and must have known or should have known than[sic] its action would cause the direct infringement. Unlike direct infringement, which must take place within the United States, induce infringement does not require any activity by the indirect infringer in this country, as long as the direct infringement occurs here."
The court of appeals found that this instruction was proper, holding: "inducement requires evidence of culpable conduct, directed to encouraging another's infringement, not merely that the inducer had knowledge of the direct infringer's activities. [Citations omitted]. Accordingly, the district court correctly instructed the jury in this case".
While the "known or should have known" language continues to leave open questions as to whether intent is to be subjectively or objectively determined, by confirming the specific intent requirement for inducement of infringement under Section 271(b), the Federal Circuit decision may heighten the importance of an exculpatory opinion of counsel in inducement cases.
It can be argued that the specific intent required under the DSU Medical Corp vs JMS decision is absent if the alleged inducer is relying on an opinion of counsel that the asserted patent is invalid, unenforceable or not infringed.