The decision, which I first read about on Bloomberg
Motiva Patents LLC v. Sony Corp.
, No. 9:18-CV-00180 (E.D. Tex. Sept. 27, 2019). On a motion to dismiss claims for induced infringement, contributory infringement, and willful infringement, Judge Gilstrap first concludes that the facts as pleaded provide a sufficient basis for denying the motion to dismiss the induced infringement claim because, inter alia
, Motiva alleges that HTC "has a policy or practice of not reviewing the patents of others," and that it instructs its employees accordingly. Judge Gilstrap reasons that such "allegations plausibly suggest that additional discovery will reveal evidence in support of Motiva's claim." These allegations in turn support the willful infringement claim:
HTC argues that Motiva failed to plead a sufficient factual predicate to state a claim
for willful infringement. HTC argues that even a well-pled allegation of willful blindness
is insufficient to state a claim for willful infringement. The Court disagrees, and
finds that a well-pled claim for willful blindness is sufficient to state a claim
for willful infringement. There are at least three reasons which support such a holding.
First, Global-Tech held that willful blindness is a substitute for actual knowledge for purposes of
the infringement analysis. Global-Tech rested upon two "traditional rationale[s]" for recognizing willful blindness
in the context of inducement: a knowledge-based rationale and a culpability-based
563 U.S. at 766
. With respect to the knowledge-based rationale, Global-Tech explained that "persons who know enough to blind themselves to direct proof
of critical facts in effect have actual knowledge of those facts." Id . (emphasis added). With respect to the culpability-based rationale, Global-Tech explained that "defendants who behave in this manner are just as culpable as
those who have actual knowledge." Id .; see also id . ("'[U]p to the present day, no real doubt has been cast on the proposition that [willful blindness] is as culpable
as actual knowledge'" (quoting J.J. Edwards, The Criminal Degrees of Knowledge, 17 Mod. L. Rev. 294, 302 (1954)) (latter alteration in original) (emphasis added).
For both of these reasons, Global-Tech held that willful blindness is a substitute for actual knowledge in context of infringement.
Recognizing the equivalence between actual knowledge and willful blindness makes clear
why alleging willful blindness is sufficient in this case—if Motiva had alleged actual knowledge, it would indisputably state a claim for willful infringement. Since the Supreme
Court has explained that willful blindness is a substitute for actual knowledge in
the context of infringement, it follows that willful blindness is also a substitute
for actual knowledge with respect to willful infringement. See
at 769 . ("Under this formulation, a willfully blind defendant is one who takes deliberate
actions to avoid confirming a high probability of wrongdoing and who can almost be
said to have actually known the critical facts.").
A contrary holding would produce inconsistent results such that the same infringing
act performed by the same defendant could be both willful (sufficient to be willfully
blind to infringement) and not-willful (insufficient to willfully infringe). The Court declines to create such an inconsistency.
Second, the culpability rationale underlying Global-Tech also supports treating an allegation of willful blindness as sufficient to allege
willful infringement. Global-Tech repeatedly noted that willful blindness involves serious culpable conduct. Id.
at 765-66 . In fact, acting with willful blindness is "just as culpable as . . . actual
at 766 . Consistent with its rationale, the high standard for willful blindness set out by
Global-Tech requires substantial culpable behavior. The Supreme Court made clear that qualifying
culpable conduct "surpasses recklessness and negligence," which do not suffice
to state a claim for willful blindness. Id.
at 769 . Instead, the Court's test had "two basic requirements: (1) The defendant must
subjectively believe that there is a high probability that a fact exists and (2) the
defendant must take deliberate actions to avoid learning of that fact. We think these requirements give willful blindness an appropriately limited scope
. . . ." Id . Thus, conduct which suffices to state a claim for willful blindness inherently—or
at least, plausibly—requires culpable conduct.
Third, Halo's description of subjective willfulness suggests that willful blindness is sufficient
to state a claim for willful infringement. Halo described subjective willfulness as "'knowing or having reason to know of facts which would lead a reasonable [defendant] to realize'" that its conduct
is "unreasonably risky." Halo Elecs., Inc. v. Pulse Elecs., Inc.,
136 S. Ct. 1923
195 L. Ed. 2d 278
(2016). Halo also recognized that "reckless" conduct—that is, conduct that is
reckless to the risk of infringement—may give rise to willful infringement.
at 1932 . By definition, willful avoidance requires more than mere recklessness—and Halo holds that recklessness alone is enough to show willful infringement. Similarly, Halo described "[t]he sort of conduct" justifying a finding of willful infringement
as "willful, wanton, malicious, bad-faith, deliberate, consciously wrongful,
flagrant, or—indeed—characteristic of a pirate." Id . These descriptions have a common thread that runs through them: culpability.
The Supreme Court made clear that willful blindness is culpable conduct of the same tenor as the foregoing list. The Supreme
Court's two-part test for willful infringement essentially parallels language from
Halo: it requires a "conscious" belief on the defendant's behalf, compare
563 U.S. at 769
("defendant must subjectively believe"), with
136 S. Ct. at 1933
(defendant is "conscious"), as well as a "deliberate" act to
effectuate that belief, compare
563 U.S. at 769
("defendant must take deliberate actions"), with
136 S. Ct. at 1933
(defendant's conduct must be "deliberate"). Put simply, willful blindness
is an allegation that the defendant should have known of the plaintiff's patents,
and took deliberately wrongful steps to ignore them. Cf.
136 S. Ct. at 1933
(defendant's conduct was willful when it acted "'knowing or having reason to know of facts which would lead a reasonable [defendant] to realize'" that its conduct
was "unreasonably risky"). This is just the type of allegation that Halo suggests should suffice. Accordingly, Halo's description of willfulness instructs that a well-pled claim of willful blindness
is sufficient to state a claim for willful infringement.
HTC's primary argument against treating an allegation of willful blindness as sufficient
is that willful blindness does not involve intentional, affirmative conduct as required
by Halo. This argument is misplaced. The second prong of Global-Tech's willful blindness test requires a defendant to engage in intentional, affirmative
conduct to blind itself. Global-Tech,
563 U.S. at 769. For example, in this case, Motiva alleges that HTC engaged in affirmative conduct
by creating a willfully blind policy, and then took additional affirmative steps to
police its employees in complying with such policy. Both the act of creating a policy
and acts of implementation constitute intentional, affirmative conduct within the
ambit contemplated by
Halo. Since allegations of affirmative conduct are required to state a claim for willful blindness under the second prong of Global-Tech, well-pled allegations of willful blindness generally entail allegations of affirmative
conduct. Thus, a well-pled claim for willful blindness embodies an allegation of affirmative
conduct. HTC's argument to the contrary is incorrect.
In short, both the holding and the twin rationales of Global-Tech suggest that well-pled allegations of willful blindness suffice to state a claim for willful infringement. The alternative would create a legal quagmire where a defendant's infringing
conduct could simultaneously be willful (induced infringement) and not-willful (willful
infringement). By contrast, the factual requirements for and culpable nature of willful
blindness are squarely consistent with Halo's articulation of subjective willfulness. As a result, this Court finds that a well-pled
allegation of willful blindness is sufficient to state a claim for willful infringement.
Since Motiva has included well-pled allegations of willful blindness, the Court finds
it has also stated a claim for willful infringement.
So did the court get it right? In Global-Tech Appliances, Inc. v. SEB, S.A.
, 563 U.S. 764 (2011), the Supreme Court held that willful blindness could suffice for the "knowledge" needed to prove active inducement, but it rejected the Federal Circuit's rule that "deliberately disregard[ing] a known risk that [the plaintiff] had a protective patent" is enough. Isn't that all that HTC is alleged to have done here? Its alleged conduct certainly seems less "willfully blind" than the more specific conduct alleged in Corephotonics, Ltd. v. Apple, Inc.
, a 2018 case I blogged about here
, in which Judge Lucy Koh also concluded that willful blindness suffices to satisfy the "intentional and knowing" standard for willful infringement. (Of course, if this analysis is correct, then the induced infringement claims in Motiva
should have been dismissed.)
On the other hand, if Judge Gilstrap is right in stating that, under Halo
courts may award enhanced damages for merely "reckless," as opposed to "willful," infringement, then maybe the conduct alleged here suffices even if it's more "reckless" than "willfully blind." I'm not 100% sure I agree with Judge Gilstrap's interpretation of Halo
, though I'm not sure he's wrong either, and I would note that Professor Dmitry Karshtedt also reads Halo i
n that manner. See his article here
--and take a look at the Halo
opinion itself here
(pages 10-11, which correspond to the pages Judge Gilstrap cites) and see what you think.
Finally, as Judge Gilstrap notes, this case is just at the pleading stage, so it remains to be seen what sort of specifics, if any, turn up in discovery.