Patent attorneys spend most of their time working to obtain patent protection for their clients. However, their careers involve a second critical facet, that of pursuing patent litigation.
If you are concerned that someone is infringing your patent, or if someone has accused you of infringing their patent rights, contact Williams IP Law today. Otherwise, keep reading to learn more about patent litigation and why it’s important.
Defining Patent Litigation
When one party believes that another party is using their patented technology without permission, then the patent holder may choose to file a civil lawsuit against the allegedly infringing party. Typically, these legal actions are filed in a federal district court, and the plaintiff may ask for relief such as monetary damages and an injunction that prevents the infringer from using the protected technology.
The law requires that patent holders take action against an alleged infringer no more than six years after the infringing date.
The Importance of Patent Litigation
People obtain patents because they want to have the exclusive right to benefit from their hard work. Nonetheless, it is not unusual for another person or entity to infringe those rights. Thanks to patent litigation, it is possible for the wronged party to take the infringer to court.
Before beginning a lawsuit, it is critical to know that patent litigation is costly and that it can take years to settle a case. In many situations, the plaintiff is an individual or a small company while the defendant is a huge corporation with deep pockets.
Accordingly, it can be highly challenging for the plaintiff to prevail.
Penalties in Patent Litigation
When a plaintiff does win their case, then the court may impose one or more penalties on the defendant. These penalties may include actual damages, which are the profits that the patent holder lost due to the infringement, and royalties for the unauthorized use of the technology. Royalties usually are calculated based on other royalty agreements already in existence, the remaining term of the patent and the type of product that is covered by the patent.
The defendant also may be required to pay the legal costs incurred by the plaintiff. These may include attorney’s fees, litigation expenses and court filing fees.
Other possible penalties include an exclusion order through the International Trade Commission or a negotiated settlement. A negotiated settlement effectively ends the lawsuit without having to go to trial. However, negotiated settlements also may occur during the trial, giving the parties a chance to decide on a settlement that is not dictated by the judge.
In a negotiated settlement, the attorneys decide upon the appropriate monetary award for the plaintiff. This is the route that approximately 70 percent of all patent infringement lawsuits take, and these settlements are most frequently achieved within about one year of litigation. By contrast, only four percent of such lawsuits go to a judge’s decision at the end of trial.
The parties involved in a patent lawsuit alternatively may decide to settle their differences via mediation or arbitration rather than going to trial. Mediation can be an excellent means for avoiding the costs of a trial, and the process frequently leads to a settlement.
While defendants who lose a patent lawsuit frequently are ordered to pay penalties and costs, this may not be the end of the consequences. The court may decide to place a preliminary or permanent injunction on the infringer. A preliminary injunction may be issued at the start of the lawsuit if the plaintiff can demonstrate that they have a high probability of winning the case. The patent holder further must prove that they will suffer financial hardship if manufacturing and selling of the infringing product continues, and the preliminary injunction may be granted if there is no harm to the public’s interest or opinion.
Preliminary injunctions are rare because the standards for obtaining them are high.
At the end of the case, the court may grant a permanent injunction that prevents the infringer from manufacturing products with the infringing technology.
Patent Litigation Basics
Both federal and state laws cover patent litigation. Most lawsuits are concerned only with the federal patent laws. State patent laws are mainly focused on questions of patent ownership and contractual law.
Federal district courts handle patent litigation matters. Their responsibilities include interpreting the Constitution and the federal statutes, creating new laws, applying the federal rules of evidence to cases and applying the federal rules of civil procedure.
Another party that is critical to the patent process is the U.S. Patent and Trademark Office, or USPTO. This is the government department that is responsible for examining patent applications and issuing patents. Many patent litigation cases begin in an office of the USPTO known as the Patent Trial and Appeal Board. When issues cannot be resolved at this level, then the parties may decide to file a lawsuit in federal court.
Who Has the Right to Sue?
In general, the co-owners of a patent, the patent holder or an exclusive licensee of the patent have standing to sue an alleged infringer. It is not possible for non-exclusive licensees or distributors to sue for patent infringement.
Who does the patent holder sue? Usually, it is the person or entity that produces, sells, imports or uses the product that infringes the patent. The plaintiff also may choose to sue any person or entity that contributes to these activities.
Employees of a company may be personally liable for the infringement, but the company’s directors are not necessarily liable as well. A person is only considered liable if they had either indirect or direct knowledge of the patent infringement and they had willful blindness. Willful blindness refers to steps taken to avoid learning about the patent itself.
The courts have the discretion to add or remove parties that are suing or parties that are being sued.
The Types of Patent Infringement
Assessing patent infringement involves comparing the patent claims and the allegedly infringing product.
It may be discovered that literal infringement has occurred, in which case a direct relationship is established between the product and the words included in the claims of the patent.
Contributory infringement may occur when a third-party is responsible for giving the infringing party a component that has no utility beyond creating an infringing product.
When the infringer intentionally disregards someone else’s patent, then willful infringement may have taken place.
Infringement may be either direct or indirect. Direct infringement involves a competitor manufacturing a copy of another company’s product without the permission of the patent holder while indirect infringement occurs when a person or entity assists a third party to make a product that infringes a patent.
Even if the court determines that no actual infringement is occurring, it is possible that the doctrine of equivalents will come into play. This doctrine broadly states that a product may infringe a patent if it produces similar results in the same way. While the doctrine of equivalents does have limitations, it can be a powerful tool in patent litigation.
Defenses for Patent Infringement
What if you find yourself in the unenviable position of being sued for patent infringement? The best course of action is to engage the services of a skilled patent litigation attorney. This legal professional will have numerous defenses that can be used to fight the allegations.
These defenses may include proving that the patent at issue is not novel and that its claims are obvious to someone who is skilled in the art. Your attorney may uncover false information provided by the patent holder to the USPTO when they applied for the patent.
Arguments against the patent’s usefulness, a lack of description or the definiteness of the claims similarly may be available. Other defenses also may prove useful.
Get Legal Counsel First
Whether you believe that your patent is being infringed or you are being sued for patent infringement, it is critical that you do nothing before speaking with a qualified patent litigation lawyer.
At the outset of such a complicated legal matter, it is impossible to know how things might turn out in the end. The things that you say and do in the beginning of the case may make things more complicated for you down the road.
If you receive a letter from a person or company claiming that your products are infringing their patent, call an attorney before making any kind of reply.
Similarly, if you stumble across a product that you believe infringes your patent, it is always wisest to contact an intellectual property lawyer before taking any steps.
These legal professionals are adept at interpreting the claims of patents and comparing products to those claims. With their assistance, you can begin to either enforce your patent rights or refute the allegations of infringement made by a patent holder.
The critical thing is to remain calm. Then, ask for legal advice. Many of these situations can be resolved with a couple of letters and perhaps a few telephone conferences. Most of them never turn into lawsuits. Going to trial is even rarer.
When you work with competent legal counsel, you stand a much better chance of achieving the outcome you are hoping for.
Contact Williams IP Law
Jeff Williams and the staff at Williams IP Law have helped many clients deal with patent litigation. These situations can be complex and immensely challenging, but with the right experience and legal knowledge, it frequently is possible to resolve them well before a lawsuit or a trial is necessary.
Contact Jeff Williams today to schedule a consultation about any potential patent litigation matters.
