Businesses have tried many different ways to avoid infringing other companies' patents, but one strategy clearly doesn't work. If a business doesn't itself infringe a patent, but deliberately enables others to do so, the business will still face liability--for inducing patent infringement.
This cause of action--inducing infringement--is vital to many patent owners. Electronics companies, for instance, often rely on this cause of action to go after overseas wrongdoers. Financial and Internet firms often use it to protect their online business method patents.
Ignorance Isn't Bliss
Until the Federal Circuit's 2010 decision in SEB, the standard for inducing infringement was relatively clear. The court had declared, in its 2006 en banc ruling, DSU Medical Corp. v. JMS Co., that a party is liable for inducing patent infringement only if "the alleged infringer knew or should have known his actions would induce actual infringement." This, the court added, "necessarily includes the requirement that [the alleged infringer] knew of the patent."