Opinion ID: 759520
Heading Depth: 2
Heading Rank: 4

Heading: Liability of KM

Text: 35 Defendants assert that the district court committed reversible error in holding that KM induced infringement of the '012 patent. This issue was decided by the district court in 1995 and appealed to this court. Insituform argues that we considered this issue already in Insituform I, and that, therefore, it is the law of the case. We disagree. In Insituform I, we did not reach this issue because we vacated the district court's finding of direct infringement. See Met-Coil Sys. Corp. v. Korners Unlimited, Inc., 803 F.2d 684, 687 (Fed.Cir.1986) (Liability for inducement under § 271(b) is dependent on showing that the conduct being induced constitutes direct infringement.). 36 Defendants argue, inter alia, that the evidence fails to show that KM induced infringement of the '012 patent because the district court found, and Insituform does not dispute, that KM did not know of the existence of the '012 patent until after Insituform filed its complaint on February 2, 1990. Thus, Defendants assert, KM's acts cannot establish liability for inducing infringement of the '012 patent, because all accused acts by KM occurred before KM knew of the patent. A crucial element of induced infringement is that the inducer must have actual or constructive knowledge of the patent. A separate corporation related to KM licensed the infringing technology to Inliner after KM received notice of the '012 patent. The separate corporation is not a party to this case, and there were no findings that this affiliate was KM's alter ego. We agree that Defendants have shown clear error on the district court's finding that KM induced infringement. As the trial court made no finding on the alter ego issue, instead of reversing, we vacate the district court's holding and remand as to that issue.