Types of Patent Infringement: Everything You Need to KnowPatent Law ResourcesPatent Infringement
The various types of patent infringement occur when a person or business uses parts of a patented idea, method, or device without permission. 13 min read
2. Types of Patents
3. Enforcing a Patent
4. Defining Patent Infringement: Method versus Apparatus
5. Federal Court Opinions: Method versus Apparatus
6. Differences for Apparatus Claims
7. Patent Infringement Litigation
8. Judging Patent Infringement
9. Penalties for Patent Infringement
10. Patent Infringement in India
11. How to Avoid Patent Infringement
12. Avoiding Patent Infringement: Start Early
13. Avoiding Patent Infringement: You Can't Play Dumb
14. Avoid Patent Infringement: Perform an Initial Screening
15. The Next Steps With Your Attorney
16. Common Myths Business Owners Believe About Patent Infringement
17. Permissible Infringement
18. Patent Infringement Insurance
What Are the Types of Patent Infringement?
The various types of patent infringement occur when a person or business uses parts of a patented idea, method, or device without permission. Patent infringement is also known as patent violation or even stolen ideas. It could involve either using or selling the patented invention or idea. Before you can sue someone for patent infringement, you must figure out who is at fault. It's not always as obvious as you might think. Understanding the different types of patent infringement helps to determine who is accountable.
Making, using, selling, trying to sell, or importing something without obtaining a license from the patent holder is considered direct patent infringement. The offender must complete this act willfully and within the United States.
Indirect infringement includes contributory infringement and inducement to infringe a patent. Under these terms, even if a company isn't the one that originally infringed on the patent, that company can still be held accountable for patent infringement.
This type of infringement involves the purchase or importation of a part that aids in creating a patented item. To prove contributory infringement, one must show that the component's main use would be to create a patented item. A generic item that has other uses usually doesn't qualify in proving contributory infringement.
This occurs when a person or company aids in patent infringement by providing components or helping to make a patented product. It occurs through offering instructions, preparing instructions, or licensing plans or processes.
Willful infringement exists when a person demonstrates complete disregard for someone else's patent. Willful infringement is especially damaging to defendants in a civil suit. The penalties are much higher, and typically defendants must pay all attorney and court costs if they are found guilty.
To prove literal infringement, there must be a direct correspondence between the infringing device or process and the patented device or process.
Doctrine of Equivalents
Even if the device or method doesn't exactly infringe a patent, a judge might find in favor of the patent holder. If the device does basically the same thing and produces the same results, it could be an infringement.
There are five ways to justify a case of patent infringement:
- Doctrine of Equivalents
- Doctrine of Complete Coverage
- Doctrine of Compromise
- Doctrine of Estoppel
- Doctrine of Superfluity
Sometimes the end user is not even aware that he or she is using a patented item unlawfully. Other times, there are too many people using the item to sue all of them. Rather than suing end users, it might be best to sue those who are knowingly trying to infringe on a patent.
Types of Patents
A person files a patent application after he or she has created an idea or invention. This prevents others from profiting from it. After one files for a patent in the United States, the United States Patent and Trademark Office (USPTO) decides whether to approve it. This can be a long process, taking up to five years. Following are the types of patents available:
- Most common type of patent
- Related to technology such as mechanics, chemistry, and software
- May include drawings, charts, and software
- A very detailed description of the patent is always necessary
- Only exists in the United States. In other countries, designs aren't patented.
- Function doesn't matter for design patents
- Typically, only a drawing of the design is necessary when filing a design patent application
- Only relevant for patents that involve plants such as flowers
- A florist may patent a type of hybrid flower
In the United States, patents protect companies from losing billions of dollars to competitors. For example, a patent protected the creators of the drug Lipitor, which resulted in 12.7 billion dollars in sales.
Patents exist all over the world, but the laws vary by country. For example, in India, a patent gives the owner power over everything about that idea or object.
Enforcing a Patent
The patent office issues patents, but it does not enforce them. That job is left up to you. The first step is typically to ask the infringing person or company to stop. If that doesn't work, the next steps depend on the country. In Canada, for example, most patent cases take place in the Superior Court of the Provinces or in the Federal Court.
Some important aspects of enforcing a patent include the following:
- Patent cases are civil, not criminal, and are heard at the federal level
- Damages are typically monetary and include an injunction to prevent further use of the patented idea or item
- The scope of the patent clearly outlines the rights of the person who owns the patent
It's important for you and your company to watch your competitors to make sure no one is infringing on any of your patents. Some people choose to hire a third party to do this.
It's also important to watch upcoming technology. You can save time and money by stopping any patent infringement attempts before they are completed.
If you believe someone is infringing your patent, proving it is a two-step process.
- Evidence must show that the infringer copied all or part of the patent
- Evidence must show any valid parts of the patent where infringement exists
The defense typically will challenge the patent's validity. The capabilities, rules, and regulations vary by country.
The defense may try to prove that the original patent was not valid based on a previous idea or patent. It could be considered invalid because of a failure to include every inventor in the patent.
Several strategies are necessary and important to win a patent infringement lawsuit.
Defining Patent Infringement: Method versus Apparatus
Patent infringement means unauthorized use of a patent. "Use" may sound like a simple term. Unless you are specifically trained in patent infringement, it's not easy to define.
According to 35 U.S.C. 271(a) (2000), "[Whoever] without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefore, infringes on the patent."
In the past, courts have defined the term "use" liberally. This has made patent infringement difficult to prove.
The nature of the claim determines how the courts handle a case. It's much different for a process or method versus an apparatus.
- To consider a process as patent infringement, it must actually be performed
- An apparatus claim involves the physical item and not necessarily what it can do. Owning or possessing the object is not always patent infringement.
- The sale of an object or apparatus that can do a patented method does not qualify as infringement
- There are fewer limitations when claiming patent infringement on methods than on apparatus claims.
Federal Court Opinions: Method versus Apparatus
Infringement on a method has a smaller scope than infringement on an apparatus.
Joy Technologies, Inc. versus Flakt, Inc.
The federal government disagreed that the sale of an industrial plant that the defendant created to use a patented system was patent infringement. If the process was later performed, it could be patent infringement. The sale of the equipment was not considered infringement until the equipment was actually used.
NTP, Inc. versus Research in Motion, Ltd.
The Federal Circuit made it clear that the infringer must sequence the steps exactly for patent infringement to exist. In this case, if the infringer did even one step of the process outside of the United States, the court did not consider the method patent infringement. When the system isn't used in its entirety, it's not infringing on the patent. However, the court did find infringement when the infringers used the system completely within the United States.
Centillion Data Systems, LLC versus Qwest Communications International
The courts decided that infringement only occurs when the system is used and the invention put into service. The infringing party must apply the system or method to cause the end product to benefit the user.
Differences for Apparatus Claims
- Even if the device can do things besides its intended use, it is still patent infringement
- Direct infringement occurs when someone tricks the owner into selling a machine or apparatus
- The courts vary in their decisions when an apparatus claim falls into the method category or vice versa
Patent Infringement Litigation
- Litigation may aim to stop the use or activities of a patented idea or item
- Patents are typically considered intellectual property and tried at the federal level
- An infringement case has to be brought to court within six years of the alleged infringement
- Typically, the case is overseen by a judge, as opposed to determined by a jury
- The patent holder bears the burden of proof, which means the evidence must favor the patent holder
Judging Patent Infringement
Judging patent infringement is a two-step process.
- All relevant patent documents are analyzed in terms of the infringement claims
- These claims must be tested to see whether they actually describe the alleged infringement
Penalties for Patent Infringement
When someone is found guilty of patent infringement, the penalties typically include monetary relief to the patent holder. The most important of these is compensatory damages. These cover the patent owner's lost profits because of the patent infringement. The amount of these damages is set after the value of the patent has been determined. Damages may also include the actual money received by the infringer.
The patent holder is also eligible to receive court costs and attorney fees that were paid to take the infringer to court.
If a defendant is found guilty of deliberate infringement, the patent holder is eligible for increased damages. These damages can be up to three times the normal compensatory damages. These damages can only be claimed from the date the patent is issued, and the claim can only go back six years prior to the filing of the infringement claim.
Injunctions are another type of penalty for patent infringement.
Preliminary Injunction versus Permanent Injunction
- A judge may grant a preliminary injunction at the beginning of the case if the judge believes the patent infringement will cause hardship to the patent holder
- If patent infringement exists, then the judge may grant a permanent injunction for the patent infringer to stop activities
Patent Infringement in India
For infringement disputes in India, the court levels start with the District Court, then move up to the High Court, and finally the Supreme Court of India. These disputes are handled similarly to those in the United States. After the filing of a suit, a hearing is held where the district court reviews the evidence.
If the case deals with both invalidity and infringement, it is heard by the high courts. Furthermore, a specialized board, the Intellectual Property Appellate Board, hears all the appeals related to patent infringement.
In India, the process goes as follows:
- Everyone involved is properly notified
- Before the trial begins all the evidence is presented by both parties
- After the decision, both parties can appeal to the IPAB
How to Avoid Patent Infringement
Spending money to avoid patent infringement could save you or your company a lot of money in the future. There are many reasons to avoid a patent infringement lawsuit.
Lawsuits are expensive, but patent lawsuits tend to cost even more than traditional ones. Many cost over a million dollars in legal fees alone. If you are the defendant and lose, you may be required to pay court costs and the legal fees of the person who accused you of patent infringement.
If you are sued for patent infringement, you pay with both your time and your money. Even though the lawyers do most of the work, you will still spend a lot of time appearing in court and working with the lawyers to attempt to prove your innocence.
The accuser may ask for a preliminary injunction that could hurt your business even before the judge gives the verdict. Specifically in India, to get an injunction, the accuser must prove that the claim has validity, there is irreparable damage involved, and that the accuser will be greatly inconvenienced if it is not granted.
The owner of the patent may also go after your customers. Even if you have not knowingly committed patent infringement, you could lose customers and damage your reputation during the process.
Recreating Your Product
If you are found guilty of patent infringement, you typically will have to start completely over in your process for your product or idea. You will lose valuable time and money. Finding alternatives from the beginning could be much cheaper.
Avoiding Patent Infringement: Start Early
Don't wait until you've already created a product to try to find relevant patents. You may want to consider outsourcing this step to experts who know how to find relevant patents for specific designs or ideas.
- Perform an online patent search by going to the United States Patent and Trademark Office or using PatentHunter
- Make sure to remain diligent about reviewing the competition to decide if any parts are similar or patented
- Check the packaging of competitors' products or the product itself for patent numbers to see what parts are covered by the patent
- Review all patent numbers by doing a patent number search
- As a last resort, contact the competitor or have a third party do so
Avoiding Patent Infringement: You Can't Play Dumb
Intentionally ignoring others' patent information won't save you in court. In fact, it will probably cause you more problems.
Avoid Patent Infringement: Perform an Initial Screening
Once you have found all the relevant patents related to your product, it's time to send them to a lawyer for review. Since this process can be costly, make sure you do an initial review to pull out any patents that have expired. Also, find out if the patent owner has paid all maintenance fees, or if any of the patents aren't actually applicable to your product.
A utility patent normally expires after 20 years. A design patent usually expires after 14 years. There are typically maintenance fees associated with patents, and if they aren't paid, the patent is no longer valid. Don't waste your money by having your lawyer review patents that have expired.
Before you send any patents to your lawyer, you should realize that internal communications about patents are not always covered under attorney-client privilege. Be cautious about what you say during these communications.
The Next Steps With Your Attorney
If there is any question that you could be infringing on a patent, it's best to work with your patent attorney immediately. Request a preliminary patent infringement review. This is not a formal opinion, and it costs less than a full review.
If it is necessary, the next step is a formal patent infringement check by your patent attorney. Your attorney will check the USPTO and look for any validity concerns with the patent. Although a formal review is more expensive, it's much cheaper than being sued for patent infringement.
If patent infringement is possible, then it might be worth the time to prove any further validity issues. These might include earlier technology or other patents which would discredit the patent.
- Patent invalidity occurs when you can prove that the patent should not have been issued, therefore deeming it invalid
- Inequitable conduct might prove a patent invalid if there was deception involved in the original patent
- Patent misuse can invalidate a patent if the patent owner uses it to violate antitrust laws
Common Myths Business Owners Believe About Patent Infringement
Myth: We won't get sued.
- Some company owners believe that they can get away with using a patent because their company is small and it will go unnoticed
- If the patent is owned by a small company, businesses wrongly believe that person or company won't have the means to sue an infringer
Reality: It's not worth the risk.
- Patent lawyers are marketing and doing the homework for businesses, making lawsuits more accessible. Even small companies are at risk of being sued.
- There's always a chance a small company could be bought by a larger company, and that company will have the resources to find applicable patent infringement
- Patent lawyers often take cases on contingency, which means there are little or no upfront costs for small businesses
Myth: We know every patent in the industry.
- When people feel that they are experts in their field, they assume that if there is a related patent, they already know about it.
Reality: It's impossible to know every patent.
- With new technology created every day, a new patent could be filed without knowledge of others in the industry
- A patent may exist for a product that isn't commercialized and therefore unknown to competitors
There are some times when infringement is permissible or at least excusable. If the patent holder intentionally delays bringing a suit against the infringer, the infringer could win the case. There are four other times when infringement is permissible.
- The owner authorizes the sale of a patented article, allowing a person to sell it to someone else
- An implied license is given when there is also an authorized sale
- A person can repair or replace any part of an item that breaks as long as that specific part is not patented
- A person can infringe a patent if the purpose is to experiment with the product
Patent Infringement Insurance
If you get sued for patent infringement, it could cost you a great deal of money. you could see big costs. If someone copies or steals parts of your patents, those court costs can also be high.
If you could be at risk for being on the offense or defense of patent infringement, then you may need to consider patent infringement insurance.
You have the choice of two types of policies:
- Defensive policies if you are being sued for patent infringement
- Offensive policies that cover part or all of your court and attorney costs if you need to sue someone for patent infringement
Most of the time, patent infringement insurance is not worth the investment. There are high costs associated with the insurance, including insurance premiums and copays. The money you spend on insurance is usually better spent on developing technology or investing in your company.
For example, patent insurance usually costs between 2 and 5 percent of the amount of coverage. If you want a million dollars in coverage, it could cost up to 50,000 dollars. You might also have to pay a copayment of 15 to 25 percent of any lawsuit award covered by the insurance. That means if the suit costs one million dollars, you will still owe up to 250,000 dollars.
Defensive patent insurance requires a strict process for approval. The insurer will look closely at your patent portfolio for conflicting patents. If there is any chance you could be sued for patent infringement, they won't cover you. These disadvantages are also true for offensive patent insurance.
Some Comprehensive General Liability Insurance may offer types of insurance that cover aspects of patent infringement, such as intellectual property infringement.
Patent infringement is a complicated part of the legal system. It's important to work with an attorney, whether you are on the defensive or the offensive end of patent infringement. You can post your legal need here, whether it is a patent infringement or another business legal need, and you will instantly receive free custom quotes from the top 5% of lawyers on UpCounsel. Our lawyers come from some of the most prestigious law schools such as Berkley, Yale and Harvard.