Global-Tech Appliances, Inc. v. SEB S.A.

In 1991, SEB S.A. (SEB) (plaintiff) obtained a patent for a cool touch deep fryer. The deep fryer was very popular in the United States, and sales were very good. In 1997, Sunbeam Products, Inc. (Sunbeam), a competitor of SEB, hired Pentalpha Enterprises, Ltd. (Pentalpha), a subsidiary of Global-Tech Appliances, Inc. (defendant), to build a deep fryer Sunbeam could sell in the United States. Pentalpha was headquartered in Hong Kong and, upon being hired by Sunbeam, purchased an SEB fryer in Hong Kong. Because it was sold in a foreign market, the SEB fryer did not have U.S. patent markings on it. However, Pentalpha’s CEO, a holder of other U.S. patents, knew that patented products sold abroad did not have U.S. patent markings. Pentalpha proceeded to completely copy the SEB fryer, except for certain cosmetic aspects. Pentalpha hired an attorney to conduct a patent search, but did not inform the attorney that the fryer was directly copied from SEB’s. The attorney’s search did not discover SEB’s patent; thus, Pentalpha sold the fryer to Sunbeam for sale in the United States. SEB brought an induced patent infringement suit under 35 U.S.C. § 271(b) against Pentalpha. A jury found in favor of SEB. The district court denied Pentalpha’s post-trial motions, and the United States Court of Appeals for the Federal Circuit affirmed. The United States Supreme Court granted certiorari.