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Supreme Court hears arguments in sentence reduction, patent infringement cases

The US Supreme Court [official website] heard oral arguments [day call, PDF; merit briefs] in two cases: one determining whether a court may modify a sentence when the US Sentencing Commission [official website] has subsequently lowered the sentence range and the other examining the state of mind necessary for finding inducement of patent infringement. In Freeman v. United States [oral arguments transcript, PDF], the court will determine whether 18 USC § 3582(c)(2) [text] permits adjustment of a sentence when a defendant pleads guilty and Federal Rule of Criminal Procedure 11(c)(1)(C) (FRCP) [text, PDF] applies. The defendant, William Freeman, pleaded guilty to drug and firearms offenses and was sentenced to 106 months in prison pursuant to a plea agreement. The district court accepted that agreement, and, pursuant to FRCP 11(c)(1)(C), that sentence followed federal sentencing guidelines and was binding on the court. The US Sentencing Commission later lowered the level for crack cocaine sentencing, and Freeman moved for a sentence reduction. Freeman's attorney argued that the US Court of Appeals for the Sixth Circuit, which affirmed the district court's refusal to adjust, misread the statute and Congressional intent. Particularly, counsel for petitioner argued that FRCP 11(c)(1)(C) had been in effect for 10 years when § 3582(c)(2) was passed, and Congress did not include an exception for pleas made pursuant to the rule. The government argued that adjustment pursuant to § 3582(c)(2) is permissible only when the sentence is based on a sentencing guideline that is subsequently lowered, and as Freeman agreed to a sentence, as opposed to having one imposed through a guilty verdict, he does not meet the requirements for reduction. In one exchange, Justice Antonin Scalia noted that the government seems to construe "based on" as "absolutely determined by" and stated, "the guidelines form part of the the consideration of the judge, but the judge's decision is not based on the guidelines" to which the government's attorney responded that the proper test is whether the guidelines were of legal consequence in the determination to accept the plea.

In Global-Tech Appliances, Inc. v. SEB, SA [oral arguments transcript, PDF; JURIST report], the court will determine whether the state of mind necessary for for a finding of inducing patent infringement is "deliberate indifference of a known risk" as elucidated by the US Court of Appeals for the Federal Circuit or "purposeful, culpable expression and conduct", as stated by the court in MGM Studios, Inc. v. Grokster, Ltd. [Oyez backgrounder]. Under 35 USC § 271(b) [text], a patent owner may bring suit against an individual "who actively induces infringement of a patent." The petitioners stood accused of inducing infringement of a patented deep fryer produced by SEB. The trial court allowed the issue to go to the jury, denying petitioners' motion to dismiss, at the conclusion of the presentation of evidence even though petitioners had no knowledge of SEB's patent. The Federal Circuit affirmed, using the "deliberate indifference to a known risk" standard. Counsel for petitioners argued that that the Supreme Court has already announced the necessary state of mind in Grokster and that active inducement requires purposeful conduct. Justice Ruth Bader Ginsburg, challenging counsel for the petitioners, noted that the infringement opinion, which petitioners sought and relied on heavily in their argument, was not well-informed, stating, "[b]ut [they] didn't tell that patent attorney that they had reverse-engineered a particular product. If the attorney had been told this device copied the SEB fryer, isn't it 99 and 44/100ths percent sure that the attorney then would have found this patent?" Scalia quickly followed up, focusing on why petitioners did not tell the infringement opinion attorney about their reverse-engineering of the SEB product. Petitioner's counsel answered that, "their practice was not to notify the attorney." Counsel for SEB argued that actual knowledge of the patent would be an appropriate standard for finding inducement, provided that "willful blindness" be accepted as a means of proving actual knowledge, even though neither "knowing" nor "knowledge" appear in that portion of the statute.

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