Seb. S. A. Case Summary

SEB S.A., a French maker of home appliances, invented a “cooltouch” deep fryer then obtained U.S. Patent and started manufacturing this deep fryer in the United States. In 1997, SEB S.A.’s competitor Sunbeam Products, Inc. asked Pentalpha Enterprises, Ltd., a Hong Kong home appliance maker and wholly owned subsidiary of Global-Tech Appliances, Inc., to design and manufacture same functional fryer. In order to copy the function of SEB’s deep fryer, Pentalpha purchased an SEB’s fryer without U.S. Patent, because it was made for sale in a foreign market. Then retained an attorney to conduct a right-to-use study without telling him it had copied directly from SEB’s design. After attorney issued an opinion letter stating that Pentalpha’s deep fryer did not infringe any of patents that he found, Pentalpha started manufacturing and selling its fryers to Sunbeam, which resold them in the United States. In March 1998, SEB sued Sunbeam Products, Inc. for infringing SEB’s patent. In April 1998, Sunbeam notified Pentalpha of the lawsuit, meanwhile Pentalpha continued selling fryers to other two America companies. Therefore, SEB settled

Since Section 271(b) makes no mention of intent, in referring to a party that “induce infringement”, the Court determined that two provisions are possible: one is that “the inducer lead another to engage in conduct that happens to amount to infringement;” another is that “inducer must persuade another to engage in conduct that the inducer knows is infringement.” Then the Court used “contributory infringement” from the case “Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S.476 (1964) (Aro II)” and from the Section 271(c) to find that inducement had its origins in contributory infringement. Based on this finding and two provisions, the Court concluded that defendant need require knowledge that the induced acts constitute patent