Patent Infringement Actions
Before filing an action for infringement, a patent owner typically sends a cease and desist letter to the infringer, setting forth pertinent information about the patent and demanding that the infringer cease making, using, or selling the patented device. The cease and desist letter provided for trademark matters in Figure 6-1 can be modified easily for use in patent matters.
If the cease and desist letter does not produce favorable results, the patent owner should initiate an action in federal court for infringement. Patent matters are exclusively within the jurisdiction of federal courts. The plaintiff files a complaint and the defendant files an answer, which typically denies that any infringement has occurred and asserts a variety of defenses. Discovery commences and the parties thereby obtain information about when the patented item was invented, who worked on the device, what laboratory notebooks exist detailing the progress of work on the invention, experts who may be called, and any other information that may be relevant to proving or disproving infringement. If the matter cannot be resolved amicably, it proceeds to trial. Either party may request a jury. Although juries answer the ultimate question as to whether infringement occurred, to ensure uniformity in patent law, judges determine claims construction. A disappointed litigant may appeal to the Court of Appeals for the Federal Circuit, specifically created in 1982 for patent cases. Further appeal may be made to the U.S. Supreme Court if it, in its discretion, decides to take the case. Government and municipal entities can also infringe patents. Actions against the federal government for infringement must be brought in the U.S. Court of Federal Claims located in Washington, D.C.
Defenses to Patent Infringement
The first defense asserted by most defendants in patent infringement actions is that there was no infringement, either literal or under the doctrine of equivalents. Defendants also assert the following defenses:
Invalidity of patent. Defendants often allege that the patent is invalid and should not have been granted because it was not useful, novel, or nonobvious. Because issued patents are presumed to be valid, one challenging the validity of a patent must prove invalidity by clear and convincing evidence.
Fraud. Misconduct or fraud by an applicant during the patent application process invalidates the patent.
Misuse. If the patent owner has misused the patent, the owner may be precluded from enforcing it. One of the most common examples of misuse is collecting license fees for use of a patent after its term has expired.
Experimental use. Generally, making or using a patented invention for research or experimental use is not infringement.
Laches. Although there is no statute of limitations for bringing an action for patent infringement, a patent owner may not recover damages for infringing acts committed more than six years before the lawsuit is begun. The patentee may recover other remedies such as an injunction prohibiting further making, use, or sale of the accused device, but no damages can be recovered once this limitation period has expired. Moreover, an unreasonable delay in initiating litigation that causes prejudice to a defendant may bar a patentee from bringing suit under the doctrine of laches. There is no specific time period that must pass for laches to occur. Generally, if a patentee knows of an infringement and does not bring action promptly, and the infringer thereafter incurs great expense in making, using, or selling the invention, believing that the patentee has acquiesced in such acts, the patentee may be barred from bringing an action for infringement.
First inventor defense for business method patents. Under new legislation enacted in 1999, one accused of patent infringement can successfully defend an infringement action if he or she can prove commercial use of the business method for a year before a patent application for it was filed. This defense is allowed only in actions alleging infringement of business methods. The first inventor defense is discussed further in Chapter 16.
Remedies for Infringement
A variety of remedies are available to injured patentees, including the following:
Injunctive relief. Courts can order injunctive relief to prevent unauthorized making, using, or selling of a patented invention. In many cases, although plaintiffs desire damages for prior infringements, they are more interested in ensuring that the infringing activity ceases. If the usual factors for obtaining an injunction are met by the plaintiff (a showing of likelihood of success on the merits, irreparable harm that cannot be compensated for by money damages, more harm to the patentee if relief is not granted than to the alleged infringer if relief is granted, and public interest favoring relief to the patentee), a temporary restraining order can be granted immediately, a preliminary injunction can be granted during pendency of the lawsuit, and a final or permanent injunction can be ordered as the judgment in the case.
Compensatory damages. A patentee who proves infringement is entitled to damages adequate to compensate for the infringement. Damages include the patentee's lost profits. In no event can the damages be less than a reasonable royalty rate for the use of the invention as used by the infringer. Typically, if damages would be difficult to prove (often because the patentee has not yet made any profit on the invention and thus cannot prove what his or her lost profits or damages are), patentees elect to recover a reasonable royalty from the infringer based on what licensees of similar devices pay.
Punitive damages. Courts have the authority under federal law to increase compensatory damages up to three times the amount found or assessed. Generally, such increased or punitive damages are not assessed unless the defendant acted willfully or in bad faith. One with actual notice of another's patent rights has a duty to avoid infringement; thus, continuing infringement after notice may constitute such bad faith as to lead to the imposition of punitive damages.
Interest, costs, and attorneys' fees. Courts can award prejudgment interest to compensate patentees fully for their losses. Attorney's fees, costs, and expenses can be awarded to the prevailing party; however, generally they are not awarded unless the other's conduct has been reckless, willful, or intentional, or a contract provides for such.