inducement : CAFC Alert

Foreign manufacturer’s intent to induce infringement in the U.S. inferred from large worldwide market share

| December 7, 2018

Enplas Display Device Corp. v. Seoul Semiconductor Co.

November 19, 2018

Before Newman, Hughes, and Stoll. Opinion by Stoll.


The CAFC affirmed the district court’s judgment of no invalidity and of induced infringement, although it vacated most of the damages award. The induced infringement issue was a “close question” because there was no direct evidence that Enplas actually knew that certain lenses it was selling outside the U.S. would be incorporated into TVs sold in the U.S. But the court held that based mainly on Enplas’ large worldwide market share and in the context of its previous relationship with SSC, there was enough circumstantial evidence to meet the specific intent requirement.

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The Court Gives Roadmap to Patent Trolls on How to Obtain Lucrative Settlements from Customers without Declaratory Judgment Recourse from Manufacturers.

| April 11, 2014

Microsoft v. DataTern, Inc. and SAP v. DataTern, Inc. (Precedential Opinion).

April 4, 2014

Before Chief Judge Rader, Prost and Moore.  Opinion by Moore.  Opinion dissenting-in-part by Rader.


DataTern, Inc., a company established to exploit IP opportunities (aka patent troll), sued hundreds of customers of Microsoft and SAP alleging infringement of its’ patents for a software product that facilitates interfacing of object-oriented applications with relational databases, seeking lucrative settlements from consumers disinterested in combating a full patent lawsuit without suing Microsoft and SAP.  Despite DataTern’s effort to avoid litigation with Microsoft and SAP, who as manufacturers of the products were well equipped and interested to seek legal recourse, Microsoft and SAP successfully filed declaratory judgment actions in New York district court and were awarded summary judgments for non-infringement.  DataTern appealed to the CAFC.   Although the CAFC affirmed the district court’s decision, as explained in the dissenting-in-part opinion of Chief Judge Rader, the CAFC’s opinion “creates a roadmap [for patent troll’s] to avoid declaratory judgment” actions by taking steps to ensure that their claim charts presented to allegedly infringing customers reference only customer activity and not activity of the product manufacturers.

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