Hewlett-Packard Co. v. Bausch & Lomb, Inc.

Hewlett-Packard Co. (HP) (defendant) and Bausch & Lomb, Inc. (B&L) (plaintiff) each held patents for X-Y plotters for creating two-dimensional plots on sheets of paper. Each used one or more pairs of pinch rollers to effectuate the movement of a paper in the Y-direction while a pen was attached to a carriage to move a pen in the X-direction. To avoid the common problem of slippage, B&L’s patent taught adding a layer of material with a high coefficient of friction like rubber to one of the rollers. HP’s patent taught using silicon-carbide grit to reduce friction, which caused small indentations on the paper that would further prevent slippage. By early 1983, B&L was making and selling plotters with grit-covered rollers through one of its divisions that also made and sold analog and digital records, digitizers, computer-assisted drafting equipment, and other products. B&L sold the division in 1985 with all of its assets, properties, and rights, executing a purchase agreement and an agreement with respect to both B&L’s and HP’s patents. With respect to the patents, B&L agreed to grant the purchaser a license under its patent, indemnify the purchaser against liability for infringement of HP’s patent up to $4.6 million, work with the purchaser to develop a noninfringing plotter, and not communicate with HP about HP’s patent. HP sued B&L for direct infringement for the time prior to the 1985 sale and for active inducement after. The district court found B&L liable for direct infringement prior to the sale, but found it was not liable for active inducement of infringement. B&L appealed.