In this Mises blog post, Skip Oliva writes, in part:

Justices Willfully Blind to Individual Rights

May 31, 2011 by S.M. Oliva

The US Supreme Court issued a decision today that expands the potential liability for patent infringement. Justice Samuel Alito spoke for the Court:

After respondent SEB invented an innovative deep fryer, obtained a U. S. patent for its design, and began selling its fryer in this country, Sunbeam Products, Inc., asked petitioner Pentalpha Enterprises, Ltd., a Hong Kong home appliance maker and wholly owned subsidiary of petitioner Global-Tech Appliances, Inc., to supply Sunbeam with deep fryers meeting certain specifications. Pentalpha purchased an SEB fryer that was made for sale in a foreign market and thus lacked U. S. patent markings, copied all but the fryer’s cosmetic features, and retained an attorney to conduct a right-to-use study without telling him it had copied directly from SEB’s design. Failing to locate SEB’s patent, the attorney issued an opinion letter stating that Pentalpha’s deep fryer did not infringe any of the patents that he had found. Pentalpha then started selling its fryers to Sunbeam, which resold them in this country under its own trademarks at a price that undercut SEB’s.

SEB then sued Sunbeam for patent infringement. Though Sun beam notified Pentalpha of the lawsuit, Pentalpha went on to sell its fryers to other companies, which resold them in the U. S. market under their respective trademarks. After settling the Sunbeam lawsuit, SEB sued Pentalpha, asserting, as relevant here, that it had contra- vened 35 U. S. C. §271(b) by actively inducing Sunbeam and the other purchasers of Pentalpha fryers to sell or offer to sell them in violation of SEB’s patent rights. The jury found for SEB on the induced infringement theory, and the District Court entered judgment for SEB. Affirming, the Federal Circuit stated that induced infringement under §271(b) requires a showing that the alleged in- fringer knew or should have known that his actions would induce actual infringements; declared that this showing includes proof that the alleged infringer knew of the patent; held that, although there was no direct evidence that Pentalpha knew of SEB’s patent before it re ceived notice of the Sunbeam suit, there was adequate proof that it deliberately disregarded a known risk that SEB had a protective patent; and said that such disregard is not different from, but a form of, actual knowledge.

The Supreme Court, by an 8-1 vote, affirmed the Federal Circuit’s decision and the original jury verdict. Of note, the Supreme Court said that while Pentalpha’s “[d]eliberate indifference to a known risk that a patent exists does not satisfy the knowledge required” by federal patent law, the jury was right to find the company liable for infringement “under the doctrine of willful blindness”:

The doctrine of willful blindness is well established in criminal law. Many criminal statutes require proof that a defendant acted knowingly or willfully, and courts applying the doctrine have held that defendants cannot escape the reach of these statutes by deliberately shielding themselves from clear evidence of critical facts that are strongly suggested by the circumstances. The traditional rationale for the doctrine is that defendants who behave in this manner are just as culpable as those who have actual knowledge.

Justice Anthony Kennedy, the lone dissenter, said the majority was simply inventing a new way to allow patent-holders to sue for infringement based on what a court determines an alleged infringer should have known — a standard Kennedy suggests could now be applied to all federal criminal cases, not merely patent disputes:

The Court is correct, in my view, to conclude that 35 U. S. C. §271(b) must be read in tandem with §271(c), and therefore that to induce infringement a defendant must know “the induced acts constitute patent infringement.”

Yet the Court does more. Having interpreted the statute to require a showing of knowledge, the Court holds that willful blindness will suffice. This is a mistaken step. Willful blindness is not knowledge; and judges should not broaden a legislative proscription by analogy. In my respectful submission, the Court is incorrect in the definition it now adopts; but even on its own terms the Court should remand to the Court of Appeals to consider in the first instance whether there is sufficient evidence of knowledge to support the jury’s finding of inducement.

The Court invokes willful blindness to bring those who lack knowledge within §271(b)’s prohibition. The Court’s definition of willful blindness reveals this basic purpose. One can believe that there is a “high probability” that acts might infringe a patent but nonetheless conclude they do not infringe. The alleged inducer who believes a device is noninfringing cannot be said to know otherwise.

The Court justifies its substitution of willful blindness for the statutory knowledge requirement in two ways, neither of which is convincing.

First, the Court appeals to moral theory by citing the “traditional rationale” that willfully blind defendants “are just as culpable as those who have actual knowledge.”

But the moral question is a difficult one. Is it true that the lawyer who knowingly suborns perjury is no more culpable than the lawyer who avoids learning that his client, a criminal defendant, lies when he testifies that he was not the shooter? The answer is not obvious. Perhaps the culpability of willful blindness depends on a person’s reasons for remaining blind. Or perhaps only the person’s justification for his conduct is relevant. This is a question of morality and of policy best left to the political branches. Even if one were to accept the substitution of equally blameworthy mental states in criminal cases in light of the retributive purposes of the criminal law, those purposes have no force in the domain of patent law that controls in this case. The Constitution confirms that the purpose of the patent law is a utilitarian one, to “promote the Progress of Science and useful Arts.”

Second, the Court appeals to precedent, noting that a “similar concept” to willful blindness appears in this Court’s cases as early as 1899. But this Court has never before held that willful blindness can substitute for a statutory requirement of knowledge. Spurr v. United States, 174 U. S. 728, 735 (1899), explained that “evil design may be presumed if the [bank] officer purposefully keeps himself in ignorance of whether the drawer has money in the bank or not, or is grossly indifferent to his duty in respect to the ascertainment of that fact.” The question in Spurr was whether the defendant’s admitted violation was willful, and with this sentence the Court simply explained that wrongful intent may be inferred from the circumstances. It did not suggest that blindness can substitute for knowledge. Neither did Turner v. United States, 396 U. S. 398 (1970), or Leary v. United States, 395 U. S. 6 (1969). As the Court here explains, both cases held only that certain statutory presumptions of knowledge were consistent with due process. And although most Courts of Appeals have embraced willful blindness, counting courts in a circuit split is not this Court’s usual method for deciding important ques- tions of law.

The Court appears to endorse the willful blindness doctrine here for all federal criminal cases involving knowledge. It does so in a civil case where it has received no briefing or argument from the criminal defense bar, which might have provided important counsel on this difficult issue.

So if Justice Kennedy is correct, then patent law not only undermines free competition and property rights — it is now a weapon to eradicate constitutional due process in non-patent cases. Just lovely.

One of the commenters was of the opinion that, regarding the last bolded text above, “Basically the Supreme court supports undermining the whole “Innocent until proven guilty” thing and it lowers the burden of proof for civil cases in general.”