Key Takeaways

  • Indirect patent infringement occurs when someone encourages or contributes to another’s infringing activity, even without directly making or selling the patented invention.
  • Two main forms exist: inducement (persuading or aiding another to infringe) and contributory infringement (providing components with no substantial non-infringing use).
  • Liability requires proof of direct infringement by another party and the accused’s knowledge of the patent.
  • Courts assess factors like willful blindness and intent, which can increase damages significantly.
  • Businesses should proactively review supply chains, licensing agreements, and technology use to avoid liability.
  • Mistakes often involve assuming expired patents, overlooking divided infringement, or ignoring international dimensions of indirect infringement.

What Is Indirect Patent Infringement?

Indirect patent infringement is the violation of a patent with or without the knowledge of the infringer. A person or company obtains a patent to prevent other people from using an idea or invention. In some cases, however, another person may not be aware of the patent. Article 26 of the CPC describes the "prohibition of indirect use of the invention" or indirect patent infringement.

There are two types of indirect patent infringement: Infringement by inducement and contributory infringement. According to 35 U.S.C. § 271(b), infringing inducement means that an entity causes a third party to infringe on the patent. The patentee must show that another person actually infringed, that the alleged inducer knew of the patent, then knowingly induced the infringing acts.

Contributory infringement can only occur within the United States. It requires that there is direct infringement and that the accused infringer knew that the invention was patented and that they were infringing on that patent. Further, the invention must have no non-infringing uses. Thus, a higher level of guilt is present in contributory infringement. 

The Patent Act allows patent holders to sue for indirect patent infringement.

Elements of Indirect Infringement Claims

To succeed in an indirect patent infringement lawsuit, a patent holder must typically prove several elements:

  1. Existence of a valid patent – The patent must be enforceable and not expired.
  2. Direct infringement by another party – Someone must have actually infringed the patent.
  3. Knowledge – The alleged indirect infringer must have known about the patent and the infringing conduct.
  4. Intent – For inducement, there must be intent to cause the infringement. For contributory infringement, the component provided must lack substantial non-infringing uses.

Courts often look at circumstantial evidence, such as marketing materials or instructions, to determine whether inducement was intentional.

Why Is Indirect Patent Infringement Important?

Indirect patent infringement can result in lawsuits and the loss of reputation for companies using patents without authorization. It can also cause damage to the company that spent money and time registering and protecting the patent. In some cases, the reason for this infringement is "willful blindness."  

When infringement is proven by the court, the patent holder is usually entitled to compensation, based on loss of profits and reasonable royalty payment shortfalls. An indirect patent infringement court case can last for years and result in the loss business, reputation, and money.

A company should check whether an invention is already patented and who has the right to use, distribute, sell, and promote it. This is essential to avoid infringement claims and to prevent long-lasting legal debates. 

Consequences of Indirect Patent Infringement

The consequences of indirect patent infringement extend beyond financial damages. Courts may grant injunctive relief to stop the infringing activity, impose enhanced damages for willful conduct, and award attorney’s fees. For companies, reputational harm and disrupted partnerships can be just as damaging as monetary losses.

Additionally, indirect infringement can complicate litigation because multiple parties may be involved—manufacturers, distributors, and end-users may all face liability. This interconnectedness makes such cases more complex and expensive to defend.

Reasons to Check for Indirect Patent Infringement

Even if direct infringement cannot be proven, the patent holder can build a case based on the indirect patent infringement theory. The most common method of indirect infringement is when two or more parties support one another in the infringement activity. 

The patent owner must prove that one or another party has directly infringed on the patent, or that two or more companies cooperated to breach the patent protection. The latter is known as divided infringement, and both parties can be held liable and made to pay compensation to the patent owner. 

It is also important to note that the rules related to patent infringement change over time. The Multiparty Patent Infringement laws in the U.S. have undergone several changes in recent years. The Patent Act was first introduced to the legal system in 1952 and has undergone multiple reviews. These include the definition of the cause of action, injunctive relief, and damages or other monetary relief in the case of indirect patent infringement.

Even if the plaintiff in an indirect patent infringement case files a motion to dismiss, the patent owner can modify and resubmit their case again. This can result in a long-lasting suit. 

Common Scenarios Leading to Indirect Infringement

Indirect patent infringement often arises in industries where multiple parties contribute to the creation, distribution, or use of a product. Common examples include:

  • Supplying components designed specifically for a patented invention, such as specialized chips or software.
  • Providing instructions or manuals that encourage customers to use a product in a way that infringes a patent.
  • Collaborations between companies, where each performs part of a patented process (known as divided infringement).
  • Importing products that, when assembled or combined, directly infringe a U.S. patent.

Understanding these risk areas helps companies implement compliance policies and conduct due diligence when entering new partnerships.

Reasons Not to Check for Indirect Patent Infringement

If a company or person has obtained a patent with the United States Patent and Trademark Office prior to using an invention, and they can prove that the invention is original and does not use any other person's or company's intellectual property, there may not be a need to check for indirect patent infringement. 

In some industries, however, inventions can be very similar, and the technologies needed might already be patented. In these cases, it is very easy to commit indirect infringement. Consulting with a patent attorney can clarify the issue.

Common Mistakes

Even if an invention is not patented, a company might need a type of technology that is protected in order to use it. In some industries, patent law can be complicated. Not understanding what constitutes indirect patent infringement can cause legal problems and cost companies a lot of money. 

Another common mistake is assuming that a patent has expired automatically after 20 years. It is important to check the status of a patent for extensions or renewal, or whether additional patents have been granted. 

Determining the appropriate level of modification when using, distributing, or selling an invention or technology can be difficult, and is often left to the court's discretion. This is the main reason that companies should consult with experts and learn all they can about the different types and conditions ofpatent infringement.

International Dimensions of Indirect Infringement

While U.S. law primarily governs domestic patent rights, indirect infringement can also have cross-border implications. For example, exporting components from the United States that are specially made for use in an infringing product abroad may still trigger liability under 35 U.S.C. § 271(f). Similarly, companies operating in Europe must be aware that the European Patent Convention (EPC) recognizes indirect infringement if a party supplies means for implementing the patented invention, knowing it will be used unlawfully.

Global businesses should therefore consider international patent frameworks and coordinate legal strategies to minimize risk.

How to Avoid Indirect Patent Infringement

Businesses can minimize the risk of indirect patent infringement by thoroughly checking the patent status of any technology or invention they intend to use. A search through the United States Patent and Trademark Office (USPTO) database is often the first step. Because patent law can be complex, consulting with an experienced attorney before manufacturing, distributing, or selling a product can provide additional protection and ensure compliance.

Who Must Prove Indirect Patent Infringement

The burden of proof in an indirect patent infringement case rests on the patentee. It is the patent holder’s responsibility to provide sufficient evidence that infringement occurred and that the accused party either induced or contributed to the infringing activity.

Laws Defining Indirect Infringement

Indirect infringement is primarily governed by 35 U.S.C. § 271(b) in the United States, which outlines the conditions under which inducement or contributory infringement may be found. Similarly, the European Community Patent Convention (CPC) recognizes indirect infringement. In both jurisdictions, proof of knowledge—meaning that the accused party knew of the patent and the infringing acts—is essential.

Time Limits for Bringing a Claim

A patentee must file a claim for indirect patent infringement within a specific statutory period. In most cases, the time limit is six years prior to the filing date of the infringement lawsuit. This limitation prevents indefinite liability and encourages timely enforcement of patent rights.

Outcomes of a Successful Infringement Claim

When a court finds indirect patent infringement, the patentee may be entitled to several remedies. These can include compensatory damages for lost profits, reasonable royalties, attorney fees, and court costs. In cases where infringement is deemed willful or deliberate, damages may be enhanced up to three times the compensatory amount. Courts may also issue injunctions, initially temporary during litigation but potentially permanent after a final judgment, to prevent further use, sale, or manufacture of the patented invention.

Frequently Asked Questions

1. What is the difference between inducement and contributory infringement?

Inducement involves actively encouraging or assisting another to infringe a patent, while contributory infringement involves supplying a component with no substantial non-infringing uses.

2. Can a company be liable if they didn’t know about the patent?

Generally, liability requires knowledge of the patent. However, courts recognize “willful blindness” when a company deliberately avoids confirming infringement.

3. Does indirect infringement require proof of direct infringement?

Yes. A plaintiff must prove that a direct infringement occurred, even if it was carried out by a third party.

4. Are foreign companies at risk of U.S. indirect infringement claims?

Yes, if they supply components from the U.S. for use in infringing products abroad, they may be liable under U.S. patent law.

5. How can companies reduce their risk?

Conduct regular patent clearance searches, implement compliance training, and consult with patent attorneys before launching new products or entering into collaborations.

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