Patent infringement under United States law

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In the United States, a valid patent provides its proprietor with the right to exclude others from practicing the invention claimed in that patent. A person who practices that invention without the permission of the patent holder infringes that patent.

Contents

More specifically, an infringement occurs where the defendant has made, used, sold, offered to sell, or imported an infringing invention or its equivalent. [1]

No infringement action may be started until the patent is issued. However, pre-grant protection is available under 35 U.S.C.   § 154(d), which allows a patent owner to obtain reasonable royalty damages for certain infringing activities that occurred before patent's date of issuance. This right to obtain provisional damages requires a patent holder to show that (1) the infringing activities occurred after the publication of the patent application, (2) the patented claims are substantially identical to the claims in the published application, and (3) the infringer had "actual notice" of the published patent application.

In 2015, 45% of all patent cases were filed in the Eastern District of Texas in Marshall, and 28% of all patent cases were filed before James Rodney Gilstrap, as this court was known for favoring plaintiffs and for its expertise in patent suits. [2]

Direct infringement

A person directly infringes a patent by making, using, offering to sell, selling, or importing into the US any patented invention, without authority, during the term of the patent. [3]

Indirect infringement

While the United States Patent Act does not directly distinguish "direct" and "indirect" infringement, it has become customary to describe infringement under 35 U.S.C.   § 271(a) as direct infringement, while grouping 35 U.S.C.   § 271(b) and 35 U.S.C.   § 271(c) together as "indirect" ways of infringing a patent. [4] Unlike direct infringement, which does not require knowledge of the patent or any intent to infringe, indirect infringement can only arise when the accused indirect infringer has at least some knowledge and intent regarding the patent and the infringement. [4]

35 U.S.C.   § 271(b) creates a type of indirect infringement described as "active inducement of infringement," while 35 U.S.C.   § 271(c) creates liability for those who have contributed to the infringement of a patent. Both types of indirect infringement can only occur when there has actually been a direct infringement of the patent. [5] Courts can find that there has been direct infringement, however, merely from circumstantial evidence that there must have been at least one instance where the inducement or contribution resulted in the practice of the patented art. [6]

35 U.S.C.   § 271(b) covers situations where one actively induces the infringement of a patent by encouraging, aiding, or otherwise causing another person or entity to infringe a patent. A potential inducer must actually be aware of the patent and intend for their actions to result in a third party infringing that patent. [4]

35 U.S.C.   § 271(c), or "contributory infringement," is triggered when a seller provides a part or component that, while not itself infringing of any patent, has a particular use as part of some other machine or composition that is covered by a patent. [4] If there are other valid uses for the product, however, or it is "a staple article or commodity of commerce suitable for substantial noninfringing use," the seller has likely not contributed to a third party's infringement under 35 U.S.C.   § 271(c).

Defenses

The two most common defenses to a claim for patent infringement are non-infringement and invalidity. The defense of non-infringement is that at least one element of an asserted claim is not present in the accused product (or in the case of a method claim, that at least one step has not been performed). The defense of invalidity is a counter-attack on the patent itself., i.e., the validity of the patent or of the allegedly infringed claims. Case law provides other defenses, such as the first-sale doctrine, the right to repair, and unenforceability because of inequitable conduct.

In the case of a medical procedure patent issued after 1996, a U.S. infringer may also raise a statutory safe harbor defense to infringement.

There is safe harbor for research conducted for "purely philosophical" inquiry, but research directed to commercial purposes has no safe harbor - unless the research is directed toward obtaining approval of the Food and Drug Administration (FDA) for introduction of a generic version of a patented drug (see Research exemption and Hatch-Waxman Act). [7]

Remedies

Under 35 U.S.C.   § 284, a patent owner is entitled to "damages adequate to compensate for the infringement, but in no event less than a reasonable royalty." [8] Lost profits that result from infringement of their patent are also compensable. Reasonableness is determined by the standard practices of the particular industry most relevant to the invention, as well as any other relevant or similar royalty history of the patentee. Lost profits are determined by a "but for" analysis. (e.g. "My client would have made X dollars in profit but for the infringement of his/her patent.")

If an infringer is found to have deliberately infringed a patent (i.e., "willful" infringement), then "enhanced" damages can be awarded of up to three times the damages found or assessed. Legal fees can also be assessed, under 35 U.S.C.   § 285, if the case is deemed "exceptional." Willfulness is determined from "the knowledge of the actor at the time of the challenged conduct." On appeal, the standard of review is abuse of discretion. [9]

An infringer can also be enjoined from further infringement of the patent, even to the point of being forced to remove an infringing product from the market.

Until the 2006 Supreme Court case of eBay v. MercExchange, [10] plaintiffs routinely sought, and were granted, injunctions prohibiting infringement of their patents. After 2006, injunctions were much harder to obtain, leaving plaintiffs to pursue remedies only for damages. Because patents last for many years, it is common for lawsuits to conclude before the patent term has ended. This has opened up the question of whether and to what extent a court should craft a remedy that includes a royalty for infringing activity that has not yet occurred, but which likely will occur in the immediate future if the infringer continues his infringing activity. According to a 2009 article in the Federal Lawyer, [11] courts have been willing to grant such remedies in appropriate cases.

See also

See Glossary of patent law terms for articles on various legal aspects of patents, including special types of patents and patent applications.

Related Research Articles

<span class="mw-page-title-main">Laches (equity)</span> Unreasonable delay by a plaintiff in bringing their claim

In common-law legal systems, laches is a lack of diligence and activity in making a legal claim, or moving forward with legal enforcement of a right, particularly in regard to equity. This means that it is an unreasonable delay that can be viewed as prejudicing the opposing party. When asserted in litigation, it is an equity defense, that is, a defense to a claim for an equitable remedy.

<span class="mw-page-title-main">Injunction</span> Legal order to stop doing something

An injunction is an equitable remedy in the form of a special court order that compels a party to do or refrain from specific acts. "When a court employs the extraordinary remedy of injunction, it directs the conduct of a party, and does so with the backing of its full coercive powers." A party that fails to comply with an injunction faces criminal or civil penalties, including possible monetary sanctions and even imprisonment. They can also be charged with contempt of court.

Patent infringement is the commission of a prohibited act with respect to a patented invention without permission from the patent holder. Permission may typically be granted in the form of a license. The definition of patent infringement may vary by jurisdiction, but it typically includes using or selling the patented invention. In many countries, a use is required to be commercial to constitute patent infringement.

A declaratory judgment, also called a declaration, is the legal determination of a court that resolves legal uncertainty for the litigants. It is a form of legally binding preventive by which a party involved in an actual or possible legal matter can ask a court to conclusively rule on and affirm the rights, duties, or obligations of one or more parties in a civil dispute. The declaratory judgment is generally considered a statutory remedy and not an equitable remedy in the United States, and is thus not subject to equitable requirements, though there are analogies that can be found in the remedies granted by courts of equity. A declaratory judgment does not by itself order any action by a party, or imply damages or an injunction, although it may be accompanied by one or more other remedies.

The Patent Reform Act of 2005 was United States patent legislation proposed in the 109th United States Congress. Texas Republican Congressman Lamar S. Smith introduced the Act on 8 June 2005. Smith called the Act "the most comprehensive change to U.S. patent law since Congress passed the 1952 Patent Act." The Act proposed many of the recommendations made by a 2003 report by the Federal Trade Commission and a 2004 report by the National Academy of Sciences.

Statutory damages are a damage award in civil law, in which the amount awarded is stipulated within the statute rather than being calculated based on the degree of harm to the plaintiff. Lawmakers will provide for statutory damages for acts in which it is difficult to determine a precise value of the loss suffered by the victim. This could be because calculation of a value is impractical, such as in intellectual property cases where the volume of the infringement cannot be ascertained. It could also be because the nature of the injury is subjective, such as in cases of a violation of a person's rights. The award might serve not only as compensation but also for deterrence, and it is more likely to succeed in serving a deterrence function when the potential defendants are relatively sophisticated parties. Other functions that can be served by statutory damages include reducing administrative costs and clarifying the consequences of violating the law.

eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), is a case in which the Supreme Court of the United States unanimously determined that an injunction should not be automatically issued based on a finding of patent infringement, but also that an injunction should not be denied simply on the basis that the plaintiff does not practice the patented invention. Instead, a federal court must still weigh what the Court described as the four-factor test traditionally used to determine if an injunction should be issued.

In United States law, treble damages is a term that indicates that a statute permits a court to triple the amount of the actual/compensatory damages to be awarded to a prevailing plaintiff. Treble damages are a multiple of, and not an addition to, actual damages in some instances. On occasion, however, as in California Civil Code § 1719, they are additive. When such damages are multiplicative and a person received an award of $100 for an injury, a court applying treble damages would raise the award to $300. Some statutes mandate awards of treble damages for all violations. Examples of statutes with mandatory treble damages provisions are the Clayton Antitrust Act and RICO. Some statutes allow for an award of treble damages only if there is a showing that the violation was willful. For example, "up to three times the amount found or assessed" may be awarded by a court in the United States for willful patent infringement. The idea behind the creation of such damages is that they will encourage citizens to sue for violations that are harmful to society in general, and deter the violator from committing future violations.

Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (2007), was a United States Supreme Court case in which the Supreme Court reversed a previous decision by the Federal Circuit and ruled in favor of Microsoft, holding that Microsoft was not liable for infringement on AT&T's patent under 35 U.S.C. § 271(f).

Ecolab v. FMC, 569 F.3d 1335, is a decision of the United States Court of Appeals for the Federal Circuit (CAFC).

Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011), is a United States Supreme Court case. The case considered whether a party, in order to "actively [induce] infringement of a patent" under 35 U.S.C. § 271(b), must know that the induced act constitutes patent infringement, or whether deliberate indifference to the existence of a patent can be considered a form of actual knowledge. In an 8–1 decision delivered by Justice Samuel Alito, the Court held that induced infringement requires knowledge of patent infringement, but because the petitioners had knowledge of a patent infringement lawsuit involving the respondent and Sunbeam Products over the same invention, the Federal Circuit's judgement that petitioners induced infringement must be affirmed under the doctrine of willful blindness.

Fujitsu Ltd. v. Netgear Inc., 620 F.3d 1321, was a patent infringement case centered on three patents claimed to be required for full compliance of the IEEE 802.11 (WiFi) standard and the WiFi Alliance Wireless Multimedia Extensions (WMM) Specification. US patents 4,975,952, 6,018,642, and 6,469,993 were owned by Philips Electronics, Fujitsu, and LG Electronics respectively, and placed in the Via Licensing pool. The Via Licensing pool claimed to hold all patents required for a complete WiFi/WMM implementation. Netgear did not enter an agreement with Via Licensing but produced a series of products that conform to the WiFi standard and WMM Specification. Philips Electronics, Fujitsu, and LG Electronics sued Netgear for patent infringement claiming a complete implementation of the WiFi standard implied violating patents held by Via Licensing pool. When tried in United States District Court for the Western District of Wisconsin, the court granted summary judgment of non-infringement by Netgear for all three patents thus plaintiffs appealed. The United States Court of Appeals for the Federal Circuit confirmed non-infringement for two of the three patent and found infringement of the third patent in four of Netgear's products.

<span class="mw-page-title-main">Defences and remedies in Canadian patent law</span>

A patent holder in Canada has the exclusive right, privilege and liberty to making, constructing, using and selling the invention for the term of the patent, from the time the patent is granted. Any person who does any of these acts in relation to an invention without permission of the patent owner is liable for patent infringement.

Morton Salt Co. v. G.S. Suppiger Co., 314 U.S. 488 (1942), is a patent misuse decision of the United States Supreme Court. It was the first case in which the Court expressly labeled as "misuse" the Motion Picture Patent/Carbice tie-in defense to a charge of patent infringement and created the present blanket remedy in infringement cases of unenforceability of the misused patent. The decision re-emphasized that misuse can be found without finding an antitrust violation.

Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172 (1965), was a 1965 decision of the United States Supreme Court that held, for the first time, that enforcement of a fraudulently procured patent violated the antitrust laws and provided a basis for a claim of treble damages if it caused a substantial anticompetitive effect.

Princo Corp. v. ITC, 616 F.3d 1318 was a 2010 decision of the United States Court of Appeals for the Federal Circuit, that sought to narrow the defense of patent misuse to claims for patent infringement. Princo held that a party asserting the defense of patent misuse, absent a case of so-called per se misuse, must prove both "leveraging" of the patent being enforced against it and a substantial anticompetitive effect outside the legitimate scope of that patent right. In so ruling, the court emphasized that the misuse alleged must involve the patent in suit, not another patent.

The Mercoid cases—Mercoid Corp. v. Mid-Continent Investment Co., 320 U.S. 661 (1944), and Mercoid Corp. v. Minneapolis-Honeywell Regulator Co., 320 U.S. 680 (1944)—are 1944 patent tie-in misuse and antitrust decisions of the United States Supreme Court. These companion cases are said to have reached the "high-water mark of the patent misuse doctrine." The Court substantially limited the contributory infringement doctrine by holding unlawful tie-ins of "non-staple" unpatented articles that were specially adapted only for use in practicing a patent, and the Court observed: "The result of this decision, together with those which have preceded it, is to limit substantially the doctrine of contributory infringement. What residuum may be left we need not stop to consider." The Court also suggested that an attempt to extend the reach of a patent beyond its claims could or would violate the antitrust laws: "The legality of any attempt to bring unpatented goods within the protection of the patent is measured by the antitrust laws, not by the patent law."

Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. ___ (2016), was a United States Supreme Court case in which the Court held that the two-part Seagate test, used to determine when a district court may increase damages for patent infringement, is not consistent with Section 284 of the Patent Act.

Romag Fasteners, Inc. v. Fossil, Inc., 590 U.S. ___ (2020), was a United States Supreme Court case related to trademark law under the Lanham Act. In the 9–0 decision on judgement, the Court ruled that a plaintiff in a trademark infringement lawsuit is not required to demonstrate that the defendant willfully infringed on their trademark to claim lost profit damages.

Commil USA, LLC v. Cisco Systems, Inc., 135 S.Ct. 1920 (2015), was a 2015 decision by the United States Supreme Court pertaining to the standard for induced patent infringement. Writing for a 6-2 majority, Justice Anthony Kennedy held that (1) a claim of induced infringement requires a showing that the defendant knew that it is engaging in infringing conduct and (2) a defendant's belief that a patent is invalid is not a defense to a claim of induced infringement. Justice Antonin Scalia dissented from the second point, arguing that, in his view, a good faith belief in a patent's invalidity should constitute a defense to a charge of induced infringement.

References

  1. ↑ See, e.g., the U.S. court case, "Wolverine World Wide, Inc. v. Nike, Inc., 38 F.3d 1192, 1199 (Fed. Cir. 1994)". Google Scholar. Google. Retrieved 12 September 2017. ("[F]or a court to find infringement, the plaintiff must show the presence of every element or its substantial equivalent in the accused device.")
  2. ↑ Sam Williams (February 6, 2006). "A Haven for Patent Pirates". Technology Review. Retrieved July 7, 2007.
  3. ↑ 35 U.S.C.   § 271 Infringement of patent
  4. 1 2 3 4 Chisum, Donald S. (1997). Chisum on Patents. Matthew Bender. ISBN   0820515256 . Retrieved 12 September 2017., Sec. 17.01
  5. ↑ Nordberg Mfg. Co. v. Jackson Vibrators, Inc., 393 F.2d 192 (1968)
  6. ↑ 5-17 Chisum on Patents § 17.04
  7. ↑ Sahu, Pradip K.; Mrksich, K. Shannon (March 2005). "The Hatch-Waxman Act: When Is Research Exempt From Patent Infringement?". GPSolo. 22 (2). Retrieved 12 September 2017.
  8. ↑ Thomas, John R. (July 18, 2017). Remedies for Patent Infringement (PDF). Washington, DC: Congressional Research Service. Retrieved 31 January 2018.
  9. ↑ Supreme Court Update: New Standard for Willful Patent Infringement and Enhanced Damages Under 35 U.S.C. §284
  10. ↑ "eBay Inc. v. Mercexchange, Ll, 547 US 388, 126 S. Ct. 1837, 164 L. Ed. 2d 641 (2006)". Google Scholar. Google. Retrieved 12 September 2017.
  11. ↑ Tittemore, Lisa M. (November 2009). "The Controversy Over "Ongoing Royalty" Awards in the Evolving Landscape of Remedies for Patent Infringement" (PDF). The Federal Lawyer: 29. Retrieved 12 September 2017.
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