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Archived updates for Thursday, October 16, 2008

Customer Applications and Training Insufficient to Show Specific Intent for Inducement

In Kyocera Wireless Corp. v. International Trade Commission (October 14, 2008), the Federal Circuit vacated and remanded the ITC’s determination of induced infringement for failing to examine whether Qualcomm's conduct satisfied the specific intent requirement.

The decision noted that the Commission found Qualcomm’s MSM chips infringe the ’983 Patent’s asserted claims when they are programmed with computer source code ("system determination software") that implements battery-saving features such as reducing the frequency of scanning for network access points. The ITC determined that Qualcomm’s handset manufacturer customers directly infringe the ’983 Patent by making handsets that incorporate the accused MSM chipsets and system determination software. The ITC further determined that Qualcomm induces the infringing acts of its handset manufacturer customers by, inter alia, providing customers with the system determination software, training them on implementation of their mobile devices, providing software and firmware updates, offering customer support, furnishing promotional and technical documents for the accused MSM chipsets, and recommending that its customers implement battery saving features.

According to the opinion by Circuit Judge Radar, that was not enough to prove inducement:

Under 35 U.S.C. § 271(b), "[w]hoever actively induces infringement of a patent shall be liable as an infringer." To prevail on inducement, "the patentee must show, first that there has been direct infringement, and second that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another's infringement." Minn. Mining & Mfg. Co. v. Chemque, Inc., 303 F.3d 1294, 1304-05 (Fed. Cir. 2002) (citation omitted). In DSU Med. Corp. v. JMS Co., this court clarified en banc that the specific intent necessary to induce infringement "requires more than just intent to cause the acts that produce direct infringement. Beyond that threshold knowledge, the inducer must have an affirmative intent to cause direct infringement." 471 F.3d 1293, 1306 (Fed. Cir. 2006) (en banc review of intent requirement).

The ITC released its initial determination before this court’s clarification of the
intent standard for inducement in DSU. The ITC’s administrative law judge
understood Federal Circuit law to permit a finding of inducement upon "a showing
of either general or specific level of intent" and expressly adopted Broadcom’s
argument that "the only intent required of the defendant is the intent to cause
the acts that constitute infringement." Initial Determination, 2006 ITC LEXIS
803 at *126, *225. Applying this understanding of the law, the Commission
determined that "Qualcomm intends to induce infringement because it provides its
customers with the system determination code." Id. at *225.

Although thought to be proper at the time, the approach adopted by the ITC is improper under this court’s decision in DSU. Proof of intent to cause infringing acts is a necessary but not sufficient condition for induced infringement. Inducement additionally requires "evidence of culpable conduct, directed to encouraging another’s infringement," i.e., specific intent to encourage infringement. DSU, 471 F.3d at 1306. This specific intent may, of course, be demonstrated by circumstantial evidence such as that presented by Broadcom. Id. But the ITC’s conclusion that "Qualcomm intends to induce infringement because it provides its customers with the system determination code" evinces, at most, a finding that Qualcomm generally intended to cause acts that produced infringement. Thus, the current record falls short of the
necessary intent showing for inducement—that Qualcomm possessed a specific
intent to cause infringement of Broadcom’s patent.

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