Patent Infringement Defenses: Everything You Need to KnowPatent Law ResourcesPatent Infringement
Patent infringement cases result when a patent owner files against someone using the creation without permission and owner must use defenses to fight the case.27 min read
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What Is a Patent Infringement Case?
Patent infringement cases result when a patent owner, or any entity who holds sufficient interest in a U.S. patent, files legal action against someone they claim is using the patented creation without permission.
Your defenses in a patent infringement case can include:
- Invalidating the patent
- Claiming non-infringement
- Citing prior use, first sale or repair doctrines, inequitable conduct, patent misuse, or limitation on rights
- Laches, formerly an important defense, may soon no longer be valid
Overview of a United States Patent
United States patents are issued by the U.S. Patent and Trademark Office (USPTO). They cover all useful and non-obvious inventions. A patent gives you the right to prevent others from making, using, selling, offering for sale, or importing the patented invention.
There are, in general, three varieties of patents:
- Utility patents — these protect useful and new inventions. They are what people usually mean when they say "patent."
- Design patents — these protect the way something looks.
- Plant patents — these provide protection for new and distinct plant varieties that have been asexually reproduced under controlled conditions.
Patents filed before June 8, 1995, provide protection of 17 years from the date of issue, or 20 years from the filing date — whichever is longer. Patents filed later provide protection of 20 years from the date of filing.
A patent includes the following elements:
- Cover Page — includes:
- the filing date
- date of issuance
- inventors' names,
- assignee (if any)
- Specification and Claims — this is the main body of the patent, which includes:
- complete description
- technological background
- the scope of the invention
- claims of ownership
- assertion of rights to exclude others
- outlines of each element and limitation of each apparatus or method of the invention that is covered under the patent
One downside of patents is that they are public knowledge. They cannot be kept secret by their owners.
Those who wish to keep their process or invention secret can obtain some protection through trade secrets. These extend to business practices, information, and technology that provide a competitive edge to their users.
Trade secrets protect businesses from those who obtain and use their secret information without express permission. Some things that can be considered trade secrets are:
- Operating system code
- Secret drink formula
- Search algorithms
Relying on trade secrets carries a number of risks:
- It only works while the information is secret
- It allows for reverse-engineering of substantially similar products or processes
- It lets other people make similar products while you're making yours
Overview of Federal Patent Infringement Cases
According to United States Code 28, section 1330, all claims for patent infringement are under the exclusive jurisdiction of federal district courts. Any district court can preside over a patent case, as long as personal jurisdiction and the requirements of venue are observed. At any time during the process, either party can ask for a trial by jury.
Some of the most popular districts for patent suits include:
- The Eastern District of Texas
- The Central and Northern Districts in California
- Wisconsin's Eastern District
- The state of Delaware
- The Southern District in New York
The outcome of any given case can depend heavily on factors including (but not limited to):
- Cultural attitudes and education level of the jury
- The judge's experience level with patent cases
- Average time to trial
Patent cases can be appealed. All cases go directly to the United States Court of Appeals for the Federal Circuit in Washington, DC. Further appeals from this point go before the United States Supreme Court.
A patent owner can decide to start or stop the process of taking legal action at any point. They can also decide who to sue.
Because of this, patent holders can choose to target people who cannot afford to pay for legal defense. It has become necessary to develop solid defense strategies against cases of patent infringement. Meanwhile, you should still protect the rights of patent holders.
Types of Patent Infringement
There are three types of patent infringement according to U.S. Code 25, Section 271.
1. Direct Infringement. Occurs when:
- A party imports a patented invention into the United States.
- Depends on strict liability. This means that no intent is required for infringement to take place.
- A party deliberately uses, sells, manufactures, or offers for sale a patented invention within the United States.
2. Contributory Infringement. Occurs when:
- A party sells, offers to sell, or imports a component, material, or apparatus for manufacturing or practicing any process protected by patent.
- The only use of that component, apparatus, or material is for the purpose of practicing that patented process.
- There must be no other substantial use for the infringing material other than to violate the existing patent. Such materials are called "staple goods."
- Requires that the person had knowledge of and the intent to infringe upon the patent.
- Finally, for this standard to hold up, a third party has to commit direct infringement.
3. Inducement. Occurs when:
- A party induces or encourages another to participate in an action that infringes the patent. That party must also have knowledge that the acts undertaken comprise infringement.
- Requires knowledge of and intent to infringe by the defendant. Demonstrates that the defendant believed there was a possibility of infringement. They actively attempted to avoid confirmation of the fact.
- There must be active efforts to avoid confirming a suspicion of infringement. Mere clumsiness or negligence is not enough.
The last two forms of infringement are referred to as indirect infringement.
Literal or Equivalent Infringement
The first step in filing a complaint is to research and analyze the nature of the infringement. This includes:
- the coverage offered by the patent
- the process or product under accusation
- any prior art that relates to the claim
In order to win a patent infringement case, there must be a lot of evidence to support the claims. Every asserted claim of infringement much show either literal infringement or infringement under what is known as the "doctrine of equivalents." The requirement that each claim must be supported in this way is the "all elements rule."
In terms of literal infringement, every claim limitation can be found in the process or product the defendant is accused of infringing. This means that, for example, a skateboard consists of a flat deck with a raised back for steering, plus four wheels attached by two "trucks" on the bottom. Literal infringement means creating a device that has a flat deck with raised back, and four wheels attached by dual trucks.
Under the concept of a doctrine of equivalents, the device can still be infringed so long as the claim requirement differences are immaterial or insubstantial. This is true even if limitations aren't literally present.
Imagine a chair with four legs and a curved back attached to the seat. A similar device with only three legs or a back that isn't attached directly to the seat could still be infringing since it counts as a chair.
Any claim of patent infringement must give the defendant at least 30 days' notice, in writing. Such notice will include:
- Patentee's name and contact information
- Country, date, name and number of the patent
- Title, date and page number citations of any publication in evidence
- State of the invention
- Name and address of anyone considered the prior inventor or having prior knowledge of the patented item's status
In the past, the letter did not have to be specific. It would simply put the accused on notice to start the running tally of potential damages. Now, it is more likely that such a non-specific letter would simply allow the accused to seek declaratory judgment jurisdiction.
Constructing a Claim
The language of a claim is important when it comes to figuring out the scope of the case. Often, key limitations on the dispute must show:
- Infringement on the patent
- The validity of the claim itself over prior art, which could invalidate the patent
Claim Construction: The Markman Process
The process of constructing the dispute in a patent claim is called the Markman process, after a supreme court ruling in 1996. This process gives the judge more responsibility to figure it out than the jury.
If there are no rules in the district, the Markman process can occur either before or after the discovery phase. Usually holding it before discovery is more efficient.
After this, the judge will explain the case to the jury. The jury will use this information when it goes over the case.
Constructing the claim under the Markman Process involves:
- Each party identifying the terms that need to be defined by the court
- Each party's proposals about how the claim should be constructed
- Each party's presentation of arguments (briefing submissions) regarding the claim construction
- The final Markman hearing, which could involve expert opinions or attorney arguments
After the hearing, the court issues a ruling on how the claim limitation disputes will be constructed. This is called the Markman Order.
Claim Construction Methodology
There are two specific cases (Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576 (Fed. Cir. 1996) and Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005)) that are used as an example for how the process works. Specific methodology rules include:
- All public materials comprising the intrinsic record of the patent are considered the most valuable evidence, including:
- the claims themselves
- the patent specification
- any communications between the applicant and USPTO during the application
- Courts may also include expert testimony, scholarly treatises, and dictionaries
Extrinsic evidence is considered only with great caution and rarely alone. It can bog the process down since things can get abstract.
Evaluating the Claim Terms
Say a given term in a claim has an obvious meaning to an ordinary person with some skill in the art related to the invention. If this is true, it is considered to have that meaning.
In evaluating terms, other factors that are considered are:
- The context of the term
- Differences among the claims in an individual patent
- The use of similar terms in different claims (if the terminology will be the same throughout)
Finally, any claim that was disclaimed at the prosecution of the patent is not included in the process of claim construction.
Response to Filing
After the filing and notice, the infringer should do the following
- Develop their defense strategy. This will usually be one of either non-infringement or of patent invalidation. It will fall under one of three major umbrellas:
- Calculate the damages
- Consider doing re-examinations through the USPTO
- Consider counter-claims that can be filed against the patent holder.
Key Patent Infringement Defenses
Common defenses in a patent infringement case include:
- Invalidity based on prior art (anticipation or obviousness)
- Failure to meet statutory limits (laches)
- Failure to meet the statutory requirements
- A defense of inequitable conduct
- First sale
- Repair doctrine
- Patent misuse
- Patent Exhaustion
- Prior commercial use
- Experimental use
The Umbrellas of Defense Strategies
These defenses fall into three broad categories:
- General defenses
- Individualized defenses
- Class defenses
In a general defense, the defendant challenges the patent validity. In an individualized defense, a specific claim of infringement is challenged. A class defense means a certain group of people won't be affected by the lawsuit.
The importance of these umbrella categories is the lasting effect they have.
- A general defense can invalidate an entire patent. This can be disastrous to the patent holder. It can open the invention for anyone to use (as long as it is not protected by other patents).
- An individualized defense protects a specific user from a specific claim and has no broader effect.
- A class defense has the lingering effect of protecting an entire group of people from infringement claims. However, it does not protect all people in general.
Class defenses are rare in patent cases. Patent rights are designed to allow for broad use. That makes it difficult to recognize protected groups or classes, while continuing to disallow others.
Non-Infringement is the most common patent infringement defense. It claims that the product or process in question is not the same as the one protected by patent in the suit.
Sometimes in these cases, infringement is the result of multiple people using a method or system. Divided infringement can support a result of non-infringement. There are many specific defenses that fall under the overall umbrella of non-infringement. Most of these which fall under invalidating the original patent.
Joint and Divided Infringement
When more than one party is involved in accused infringement, divided infringement or joint infringement can be used as a defense strategy for non-infringement.
To be considered as "using" the invention for purposes of infringement, a given party has to both:
- control the system
- gain benefit from its use
This is called "putting the invention into service."
Because of this, a given party doesn't need to control all aspects of a system. It only needs to have control for the purpose of putting all aspects into service.
Case law has yet to be established on the details of this concept. This includes circumstances where multiple parties who perform individual steps can be liable for infringement.
Prior Art Invalidity
Claiming invalidity based on prior art can be tricky because every patent is assumed to be valid based on USPTO examination before it is awarded, under 35 U.S. Code, section 282. This means there must be convincing and clear evidence that says prior art already exists.
Arguments for invalidity can also be based on a lack of novelty, or that the step the invention took is obvious. Since the establishment of the America Invents Act (AIA) in 2013, the courts differentiate between prior art filed before or after March 16, 2013. Patents filed before the AIA are dependent on a "first to invent" concept. Those filed after are based on a "first to file" concept.
Pre-AIA Prior Art Defenses
Prior art is important when it comes to defending your case based on lack of novelty or obviousness. For defenses based on patents filed before the AIA, the rights are based on "first to invent," rather than "first to file." This means that you must show that prior art existed before the date of invention claimed by the patent holder. The notable statutes covering these categories of prior art are found in 35 U.S.C., Section 102.
The only exception to this is in regards to disclosures which occur more than 12 months before the statutory bar date (also called the critical date or U.S. patent filing date) under section 102(b). This particular category of prior art cannot be sworn behind. It includes:
- Any products for sale that were public knowledge in the United States
- Any foreign or U.S. patents that describe the invention
Disclosures that were filed before the invention date will also be considered. This is true even if they were unpublished until after the invention date, under section 102(e). Such disclosures can include those applications filed by a third party before the invention date. They can also include applications filed under the PCT (Patent Cooperation Treaty). These are in English and designate the United States. Patent holders can swear behind this section to overcome it.
Finally, section 102(g) talks about references made to third-party inventions that were made before the date of invention. These inventions must not have been suppressed, concealed, or abandoned.
Prior Art Under the AIA
For applications following the AIA, prior art is defined as that which was filed first, rather than invented first. This act largely eliminates the idea that first to invent counts as prior art. This includes public disclosures that occur before the filing date, including:
- scientific articles
- specification manuals
- physical demonstrations
Remember that a patent, when awarded, is awarded back to the date of disclosure, which counts as the filing date.
There are, however, exceptions to AIA-defined prior art. These include:
- Any disclosures made within 12 months of the effective filing date by:
- the inventor
- someone who obtained the information from the inventor
- or following a public disclosure by the same person
- Disclosures where the subject matter was:
- obtained from or previously disclosed by the inventor
- assigned to or owned by the same person as the patent application
Novelty and Obviousness
Most prior art defenses fall under the idea that the concept was either not novel, or was obvious. Anticipation relies on a "strict identity" standard. This compares all aspects of the patent claim to a given single reference of prior art. Each element challenged must be inherently or explicitly disclosed in the prior art example.
The concept of obviousness uses a combination of defenses to show that the progress made in the challenged patent is an obvious step. The step must not be one that shows true innovation.
In such cases, the determination of obviousness involves:
- Looking at the prior art's scope and content
- Its differences with the challenged invention
- Whether the claim would be obvious to anyone considered to have ordinary skill in the art required to produce the invention
If the specific combination of elements and processes does nothing more than display predictable results, it's generally considered to be obvious.
Laches and Statutory Limits
Laches, or statutory limits on filing a patent infringement case, have traditionally been an important limitation for collecting monetary damages. There is no statute of limitations on the protections provided by a patent, so long as the patent is still in effect. However, monetary damages can only be collected if a case is filed within six years of the date the holder became aware of the act of infringement.
This time limit can be shorter if the courts rule that the delay was unreasonable and acted to the direct detriment of the accused. A preponderance of evidence is required to back up such a claim, and should show that there was either:
- Evidentiary prejudice, including foggy memories, the death of important witnesses, loss of documents or the like
- Economic prejudice, in terms of damages based on the investment and expansion of a business. This must have been due to failure to accuse the alleged infringer during the period of delay
This may change. In May of 2016, the Supreme Court agreed to hear a case which may invalidate laches as a valid defense against patent infringement. This case is still pending. However, it is expected that the Supreme Court will disallow statutory limits as a defense in the future.
Another important statutory limit is a failure to notice. Say the patent holder does not mark a patented product with the appropriate patent number and notice. They cannot collect damages for any period before notice of infringement is made.
As opposed to statutory limits, statutory requirements focus on fulfillment of all the specific requirements of a patent application. If all of the requirements laid out in the Patent Act U.S.C. Section 112 are not met, the patent can be considered invalid. These include:
- A complete and thorough written description of the invention.
- Enough detail and description that any person with "ordinary skill" in the involved arts can use the invention. The should not need to experiment excessively.
- A distinct, determinate and non-ambiguous claim of the invention in the patent.
- For proceedings filed before September 16, 2011, only: A clear explanation of the best possible means of practicing the invention that is known to the inventor at the time.
Inequitable Conduct and Good Faith Belief
Inequitable Conduct means:
- The patent owner misled the examiner on purpose
- The patent owner withheld information they knew was important
- The patent is not valid, and no infringement can be had
- Honesty rules of some kind were broken
During an application, applicants must cite all known related prior art. They must be honest and transparent in their dealings, arguments, and positions in prosecution. Such claims are closely related to fraud. They require a specific approach to plead. All instances of misconduct must be specifically identified.
Proving intent to deceive the USPTO means that the applicant or their lawyers:
- knew that prior art existed or was similar to their patent
- deliberately withheld important information
These elements must both be proven by convincing and clear evidence.
In order to prove that the withheld information was material, it must pass a "but-for" test. This means that the patent was approved. However, if the USPTO had known that the prior material existed, the claim would have been refused. While there can be exceptions to this test, the rules are not very clear.
Gross negligence and suspicion of omission are not enough to show willful intent. However, "good faith" defenses that have sometimes been at the heart of these defenses may become invalid soon. Take the 2015 Commil USA, LLC v. Cisco Systems, Inc, case for example. The Supreme Court ruled that good faith belief in a patent being invalid cannot be used as a defense. This is true when it comes to induced infringement cases.
Avoiding Inequitable Conduct
Since September 16, 2012, patent owners can request a supplemental examination of their patent by the USPTO for the purpose of correcting, reconsidering, or considering information that may be relevant to the patent in question. If such a review is conducted, newly-examined information that may have been omitted prior to the examination cannot be used to claim inequitable conduct.
First Sale and Repair Doctrines
First Sale Doctrine defense states that if the accused is reselling an item that was legally sold to them, they are not infringing on the patent. This is because patent rights exhaust on a specific item once that item is sold.
Doctrine of Repair defenses depend on the idea that it is legal to repair a device by replacing worn out components that are not themselves patented. This defense does not, however, permit the defendant to completely rebuild an invention.
The following examples are considered misuse of a patent:
- Using it to violate antitrust
- Using it to crush competition
- Using it to engage in business practices that are unethical like price fixing, invalidate the patent
Proving a case like this requires a lot of evidence. Some examples are:
- The patent holder knew that their patent could be used for illegitimate, unethical or illegal purposes
- The patent holder intended to use the patent in this way
- The current suit is designed to accomplish such a purpose
Such cases can be tricky to defend, since the issuance of a patent does grant a limited monopoly on the use of the patented invention.
Ineligible Subject Matter
If the patent in question can be shown to include subject matter that cannot be patented, it can be invalidated. The following subjects cannot meet the requirements of patentable materials:
- Natural laws, laws of physics, or related phenomena
- Mathematical formulas
- Abstract ideas
- Efforts to alter, reduce, defer, or avoid altogether tax liability
- Human beings
Recently, challenges in court have been made under these rules towards inventions related to life sciences as well as internet and computer methods.
No infringement can be found if you can prove that:
- The patent holder granted permission or rights to use the patent
- They have used the invention in compliance with said rights or permission
This means that the patent holder expressly granted a license to the accused. It can also mean that they implied permission for its use through the sale or license of sale of the patented product.
In the clearest cases of licensing arguments, there is a formal license agreement that will focus on the specifics of the license in cases that:
- are directly between the parties
- otherwise cover use by the accused arguments
This applies whether it covers the product, the accused, and the patent itself.
In the case of an implied license, the argument will focus on whether the item was legally sold to the infringer. They then had an implied license to use, sell or resell it. An implied license may exist if:
- there is no way to use the item without alleged infringement
- a license to practice is inferred by the circumstances of the sale
You can overcome a defense of implied licensure. It generally requires that the sale agreement clearly indicates that there are no further licenses allowed or implied by the purchaser.
Current laws forbid a patent holder from attempting to collect payment from multiple levels of a supply chain for a single patented invention. This defense can be used when the accused's supplier upstream has legally purchased the patented invention from either:
- the patent holder
- a licensee of the same
It can also be used if the accused has been granted license or rights to sell the invention.
The Supreme Court has on several separate occasions upheld this idea. They stated that if an article that "substantially embodies a patent" is legally sold, the patent holder cannot control the use of said article post-sale. Any unconditional agreement not to file a lawsuit triggers exhaustion of a patent.
There are limited exceptions to this doctrine. A specific case ruled that a farmer cannot reproduce patented seeds through harvesting or sowing without permission of the patent holder. However, in situations where seeds self-replicate beyond the control of the buyer, reproduction could be permitted. This also applies in cases where replication is essential to using the item for an intended purpose.
The major difference between exhaustion and licensing is that where exhaustion is concerned, the defense cannot be avoided via disclaimer in a sale agreement.
Estoppel means that a party is precluded from bringing an action against another for one reason or another. There are two forms of estoppel: file wrapper estoppel and equitable estoppel.
File Wrapper Estoppel
Say the inventor disclaimed rights or admitted to any limitations of rights in their patent application. Those disclaimed rights cannot be used as part of a patent infringement case.
This means that the patent holder led the alleged infringer to believe that there would be no enforcement of the patent. This can occur either from promises or failure to enforce. It means that the accused counted on that belief or assurances in continuing their business practices. If this is the case, the claim may be dismissed.
Prior Commercial Use
In 1999, there was a revision of the Patent Act. Since then, companies who have been publicly selling products for years with no knowledge of patent infringement or accusation have been protected. They have been protected if they use the business method for at least a year prior to the patent application filing.
As of the AIA, there are even broader protections. Say the company has no knowledge of infringing a product or method used in a commercial process. The company is protected long as the following qualifications are met:
- Protections extend only to patents issued on or after September 16, 2011.
- There must be continual use of the process or product in good faith. This must happen for a minimum of one year of the date of filing or the date of disclosure. Whichever is sooner applies.
- The company may not have derived the process or product from the patent owner, a licensee or the like.
The experimental use defense is particularly important to the pharmaceutical industry. You can use a patent invention if it is related to the development of information. You can also use it if it's related to the submission of the same under Federal laws regulating the use, sale, and manufacture of drugs.
Say the customers or product users are accused of infringement. In this case, the supplier or producer of the goods can sometimes intervene in the proceedings. They can protect their customers. They can also take control of the defense of products.
In order to intervene, a claim must be able to be stated against the supplier or producer. This is true if it's a:
- Contractual claim
- Breach of implied warranty claim
- Satisfaction of specific jurisdictional requirements
The accused infringement must involve the same transactions or occurrences as related to the same accused product. Certain questions common to any typical counterclaim will arise in such an intervention.
When the potential for a patent infringement suit arises, a potential defendant can seek a declaratory judgement that the patent:
- has not been infringed
- is invalid
- is unenforceable
Such a judgment can permit the potential defendant to have control over the timing and forum of the suit. However, the subject matter jurisdiction requires that a case or controversy exist between parties.
Originally, Federal Circuit Courts required that a reasonable concern of being sued exist, but since then the circumstances have been broadened quite a bit. Now, the courts look at whether all of the alleged facts illustrate a significant controversy between parties. In addition, any reasonable apprehension of being sued can apply.
More recently, limitations have been added back onto the table. A 2012 case found that no judgement jurisdiction existed when the product and technology to be used had not been "substantially fixed." (Matthews Int'l, Corp. v. Biosafe Eng'g, LLC).
Potential Patent Infringement Remedies
There are two essential remedies that can be collected by someone who successfully pursues and prosecutes a patent infringement claim. These include collecting monetary damages and the issuance of an injunction against further use by the court.
Royalties and Compensatory Damages
Monetary damage in a patent infringement case can include:
- Lost profits
- Enhanced damages that can equal up to triple the other compensatory damages
- Attorney's fees (sometimes awarded as part of the settlement, in special cases)
Determining reasonable royalties depend on determining what a fair agreement would have been if negotiations had taken place. Once upon a time, the courts simply applied a 25 percent rule (awarding 25 percent of expected profits). This is no longer the case. The factors that come into play when determining damages include:
- Any established royalties the holder receives for similar agreements
- Royalties the accused pays to other holders for comparable products
- Exclusivity, customer restrictions or territorial scope of the license
- The existence of established marketing and policy to defend the patent and avoid licensing
- Whether the parties are competitors or have a commercial relationship
- The value of sales in promoting non-patented products
- The patent duration and license term
- Profitability and popularity of products under the patent
- Advantages and utility of the patent as opposed to older inventions
- Character and benefit of the invention and its commercial brand value
- The extent of use made by the infringer
- Portion of profit associated with the invention as separated from:
- non-patented parts
- improvements added by the infringer
- process of manufacture
- risk management
- Expert opinions
The object is to award reasonable damages and avoid unnecessarily high-value awards. The courts have more recently rejected high-dollar awards based on prior licenses that aren't related to the patent in question.
In addition to royalty-based damages, direct competitors in an infringement case can allege lost profits based on the infringing use of the invention. Here's what must be done to get paid for lost sales or lost value due to price erosion. You must show evidence that displays damage to the patent owner and benefit to the infringer. A similar "but for" standard as seen in inequitable conduct cases. Profits would've been much higher if not for the infringer's activities.
To obtain such damages, there must exist:
- Demand for the product
- An absence of valid substitute products that are non-infringing
- Evidence of both the capability of the patent owner to exploit demand for the product
- Figures demonstrating lost profit
Enhanced damages are only awarded in extreme cases. They are provided for under the Patent Act section 284. Such damages can be awarded up to three times the total award for reasonable damages and lost profit. While there are not specific circumstances provided under which enhanced damages are awarded, case law has established the following:
- The infringer is shown to have willfully moved forward despite a high likelihood that their actions would constitute infringement. Such actions are objectively reckless in nature.
- Such actions were undertaken deliberately and the risks of infringement were clearly known to the infringer or were so obvious they should have been known.
As clarified in the AIA, failure to seek legal counsel is not a valid defense against willful infringement of a patent.
Attorney's fees can sometimes be awarded as part of damages to the winner of a civil case. However, this only happens in specific exceptional situations involving:
- Willful infringement
- Inequitable conduct
- The use of bad faith tactics for litigation
Another form of relief in a patent case is when the courts exclude further use of the patented invention without express permission. This is in the form of a preliminary or permanent injunction. Injunctions are not automatic. They require a number of factors to be established:
- Injuries suffered by the patent holder
- Alternate adequate remedies, including monetary damages
- Potential hardship of the accused
- Any damage to the public interest
Achieving an injunction is more likely if the patent holder and infringer are direct competitors. On the other hand an injunction is unlikely if the patent holder is:
- Not producing a product
- Not in competition with the infringer
- Has freely granted licenses to others
There are a number of methods for resolving patent disputes outside of federal courts, including:
- Actions before the International Trade Commission
- Re-examination before the USPTO
- AIA-provided USPTO Proceedings
- Alternate Dispute Resolution (mediation and arbitration)
The International Trade Commission has the authority of a federal agency under the Tariff Act of 1930 (19 U.S.C., section 1337). It can litigate patent infringement. The benefits of ITC litigation include faster proceedings and the power to issue orders of exclusion. These can bar importation of products.
USPTO Ex Parte Re-Examination
A patent holder or any third party can ask the USPTO to re-examine a patent for validity based on the existence of prior art. These proceedings are similar to patent prosecution. They can result in:
- Cancellation of a claim
- Issuance of additional or amended claims
- Confirmation of the original claim's patent
Anyone can initiate such a re-examination (called ex parte) by filing a request with the USPTO. Such a request has to create new questions about the patentability of the invention. It must be based on prior art references.
If the USPTO grants the request, the person who requested the re-examination usually cannot take part in the proceedings. They take place only between the examiner and the holder of the patent.
During the examination, the patent holder may:
- Argue in defense of their claims
- Amend the claims of their patents to further distinguish their invention
- Add new claims to the patent
- Any combination
Say you want to file a re-examination request during an ongoing infringement case. This can allow the defendant to file a motion to stay the case until the re-examination ruling is complete. This happens if the motion is carried and is at the discretion of the court. It could depend on how early the request was filed. It can also depend on whether issuing a stay would cause undue harm to the patent holder.
By the numbers:
- 21 percent of these cases result in claim confirmation
- 11 percent in canceled claims
- 68 percent result in some level of change to the claim
New AIA Patent Review Procedures
Following the implementation of the AIA, there are a number of new procedures in place for those who wish to challenge patent validity. These include:
- Post-grant reviews
- Inter partes reviews
- Transitional patent review procedures for business methods
- Pre-issuance submissions
- Other methods and types of review submissions
With a post-grant review, a third party can challenge a patent's validity if the effective filing date is after March 16, 2013. Any grounds that could be used to challenge validity can be used to request a post-grant review. However, the request has to be filed within nine months of the patent issue or reissue.
Such a petition has to demonstrate a likelihood that, at minimum:
- one claim is unpatentable
- an unsettled or novel issue exists that is germane to other patents or applications
As with most challenges, a lot of evidence is required for such a petition to be held valid.
After the review decision, a party who petitioned for the review may not maintain or request another USPTO proceeding about the same patent claim. This is true if it could reasonably have come up during the review. They may not bring any ITC proceeding or civil action on an issue that could have been raised during the review.
Post-Grant Reviews and Litigation
If someone has previously challenged the validity of a patent in court, they may not petition for a post-grant review. This exception is if challenge of validity is as the result of a counterclaim. Filing for a post-grant review will result in a stay of any action pending until one of the following situations occurs:
- The owner of the patent motions for a lift of the stay;
- The patent owner files a counterclaim or an action alleging patent infringement against the petitioner;
- The petitioner motions to dismiss the action.
Say an infringement action is filed within three months of the issuance of a patent. The court may choose to not stay consideration of a motion for preliminary injunction via post-grant review. Provided that a decision has not already been made, the USPTO will terminate a review if both parties agree.
Inter Partes Re-Examination
Formerly, an inter partes re-examination procedure allowed the requester to stay involved with the proceedings. This has now been replaced by what is called the inter partes review. Between September 2011 and September 2012, these were allowed only if the requestor could demonstrate a strong likelihood of prevailing on at least one claim. Before this time, the requestor was required only to demonstrate the existence of a substantial new patentability question.
Inter Partes Review
Starting on September 16, 2012, inter partes examinations were eliminated and replaced with a new inter partes procedure for review. Such petitions can only be brought before the USPTO to issue a challenge that a patent claim is anticipated or obvious. These requests may be filed nine months following the issue or reissue of a patent. They can be filed nine months after the termination date of any challenged patent's post-grant review. Whichever is later applies.
This petition has to demonstrate that the petitioner has a likelihood of winning at least one challenged claim. As with many other defenses, a preponderance of evidence is required.
Upon agreement of all parties involved, the USPTO will terminate an inter partes review, unless a decision has already been rendered. There are specific regulations in place for these reviews which specify procedures for discovery, standards, and the opportunity to request oral hearings. The impact on all issues that apply to post-grant reviews (including estoppel) can apply to this form of review. The exception to this is preliminary injunction limitations.
Under the AIA, the USPTO can limit the number of inter partes reviews allowed during the first four years the procedure is permitted. This happens if the number in a year is at least the same as the number held during the last fiscal year before it came into effect.
Transitional Procedures for Review of Business Method Patents
There is a procedure in place under the AIA which allows a third party to petition for review of a business method patent under the USPTO. This procedure requires that the patent owner has accused the petitioner of infringement.
This procedure is temporary and will expire on September 16, 2020. It applies to patents issued on any date save those within nine months of a post-grant review patent which were also filed on or after March 16, 2013. The procedure exists to review patents that are not related to technological inventions that cover the methods of:
- Data processing practice
- Management of financial services or products
Evaluating these petitions involves examining whether the claimed practice involves a novel and non-obvious technological feature in relation to prior art. They must uniquely solve a technical problem in a technical manner.
There are a few ways you can alter a patent to avoid challenges. The first are pre-issuance submissions. These allow third parties to send in information that matters to the patent. This information is included in the patent's file history.
These submissions must be made before a notice of allowance is issued. They can also be made six months following the application's publication or the first office action rejecting any patent claim. They are limited to printed publications, patent applications, and patents.
Other submissions can be made at any time to include such information as:
- Prior art which has bearing on the patentability of any claim;
- Statements filed in federal court by the patent holder wherein they assume any position on a claim in the patent. This applies only for the purpose of clarifying the claim's meaning.
These methods to amend patents can apply to patents filed on any date.
Alternative Methods for Dispute Resolution
Other methods to resolve patent claim disputes include arbitration and mediation. These can be required in licensing agreements and settlements. The Patent Act section 294 specifically refers to arbitration.
Alternative dispute resolution can save on legal costs. It can be much faster and provide the services of more expert fact-finding as opposed to a jury. It can also ensure the privacy of both the proceedings and the end result.
Supreme Court Rulings
Over the past several years, a number of appeals have been heard by the supreme court. These have covered such issues as:
- Invalidity due to obviousness
- Declaratory judgment jurisdiction
- Permanent injunction remedies
- Patent validity presumption
- Evidentiary standards for invalidity
- Personalized medicine-related patent eligibility
- Claims of composition of matter and method as pertaining to human genetics;
- Patent exhaustion application doctrine
More such rulings are expected to continually redefine patent law in the coming years.
Patent infringement cases are exceptionally complicated and intricate. It is highly inadvisable for anyone to attempt to pursue or defend such a case on their own without experienced legal help. If you are facing such a case, you can post your legal need on UpCounsel to receive free custom quotes. We accept only the top 5% of attorneys in the business with an average of 14 years of experience and degrees from institutions like Harvard and Yale.