PATENT INFRINGEMENT

A patent provides the proprietor of that patent with the right to exclude others from utilizing the invention claimed in that patent. Should a person utilize that invention, without the permission of the patent proprietor, they may 'infringe that patent'.

Elements of patent infringement

Any party that manufactures, uses, sells, or offers for sale patented technology, during the term of the patent and within the country that issued the patent, is considered to infringe the patent. The test varies from country to country, but in general it requires that the infringer's product (or method, service, etc) falls within one or more of the claims of the granted patent. In the United States and others that use a "peripheral claiming", that means that the infringing technology embodies each and every of the elements listed in the claim. If the technology incorporates all of a claim's elements (and possibly more) it is said to "read on" the claim; if a single element from the claim is missing from the technology it does not read on the claim and thereby does not infringe the patent with respect to that claim.
To defend a claim of infringement, an accused infringer generally will assert one or more of the following:

★ The patent, and in particular the individual claims asserted against the infringer, are invalid because they were not novel, or were obvious in light of the state of the art, at the time patented. Often this is done by presenting evidence not originally considered by the patent office that the invention had been publicly disclosed or was in use before it was patented.

★ The patent is invalid due to some other collateral defect to make the patent invalid or unenforceable.

★ The technology in question does not in fact practice the patent

★ The accused infringer has obtained a license to the patented technology

★ The patent holder is infringing patent rights belonging to the accused infringer (this is not an actual defense to the infringement claim but it is a very common legal strategy that often results in a cross-licensing agreement rather than an infringement lawsuit).

Legislation

United Kingdom

Infringement under United Kingdom patent law is defined by Section 60 of the UK Patents Act 1977 (as amended), which sets out the following types of infringement.

★ Where the invention is a product, by the Making, Disposing of, Offering to dispose of, Using, Importing or Keeping a patented product.

★ Where the invention is a process, by the use, or offer for use where it is known that the use of the process would be an infringement. Also, by the disposal of, offer to dispose of, use or import of a product obtained directly by means of that process, or the keeping of any such product whether for disposal or otherwise.

★ By the supply, or offer to supply, in the United Kingdom, a person not entitled to work the invention, with any of the means, relating to an essential element of the invention, for putting the invention into effect, when it is known (or it is reasonable to expect such knowledge) that those means are suitable for putting, and are intended to put, the invention into effect in the United Kingdom.
An action for infringement can only be brought after grant of the patent, but damages can be recovered under Section 69 for infringing acts conducted after publication of the application, but before grant, provided those acts infringe the claims both as published and as granted, and provided the defendant can be shown to have been aware of the existence of the patent (or patent application). The protection conferred by publication of the application is known as ''provisional protection''. Publication of European applications and PCT applications confers provisional protection in the same manner, provided the application is published in English.

Remedies

A claimant for 'infringement' may be awarded a range of remedies (under section 61), depending on the facts of the particular case. Damages may be awarded to rectify financial harm suffered, an injunction may be granted to prevent further action by the infringer, an account of profits may be ordered, an order for the delivery up or destruction of infringing items may be made or a declaration that the patent is valid and infringed may be granted to the patentee. Both damages and an account of profits may not be ordered in respect of the same infringement(section 61(2)). Limitations on damages or costs may apply under certain circumstances, for example if the defendant was unaware of the patent's existence (section 62) or where the patent was subject to a transaction that was not registered at the Patent Office within 6 months (section 68).

United States

In United States law, an infringement may occur 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 (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.

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. ^[2]

Indirect infringement

Under certain jurisdictions, there is a particular case of patent infringement, called "indirect infringement." This can occur for instance when a device is claimed in a patent and when a third party supplies a product which can only be reasonably used to make the claimed device. In the U.S., types of "indirect infringement" include "contributory infringement" and "induced infringement."
In the United States, (b) defines (active) induced infringement: "Whoever actively induces infringement of a patent shall be liable as an infringer."
Also in the United States, (c) defines contributory infringement. It provides that "Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination, or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer."

Active inducement of infringement

Under (b), "whoever actively induces infringement of a patent shall be liable as an infringer." Thus, by selling products that only has use if used in an infringing way, the seller could be found liable for the direct infringement of the end user. This provision typically protects against those who aid and abet end users. National Presto Indus., Inc. v. West Bend Co., 76 F.3d 1185, 1195 (Fed. Cir. 1996). Further, there can be no inducement if there is not first a showing of direct infringement. Fuji Mach. Mfg. Co. v. Hover-Davis, Inc. 60 F.Supp. 2d 111, 117 (W.D.N.Y. 1999).

Defenses

The single most common defense to patent infringement is a counter-attack on the patent itself, i.e., the validity of the patent and the allegedly infringed claims. Even if the patent is valid, the plaintiff must still prove that every element of at least one claim was infringed and that such infringement caused some sort of damage. In case of a medical procedure patent issued after 1996, a U.S. infringer may also raise a statutory safe harbor defense to infringement.
Research for "purely philosophical" inquiry is not an infringement, but research directed to commercial purposes is - 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).

Remedies

Under US law, a patent owner is entitled to the larger of either a reasonable royalty or lost profits that result from infringement of their patent. Reasonableness is determined by the standard practices of the particular industry that the invention is in. 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 punitive damages can be assessed up to three times the actual damages. Legal fees can also be assessed.
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.

Clearance search and opinion

A clearance search is a search done on issued patents or on pending patent applications to determine if a product or process infringes any of the claims of the issued patents or pending patent applications. These searches are often performed by one or more professional patent searchers who are under the direction of one or more patent attorneys.
A clearance search is normally followed by a clearance opinion, i.e. legal opinion provided by one or more patent attorneys as to whether a given item or process infringes the claims of one or more issued patents or pending patent applications. Clearance opinions may be done in combination with a "validity and enforceability" opinion. A validity and enforceability opinion is a legal opinion as to whether a given patent is valid and/or enforceable.
The cost of these opinions for U.S. patents can run from 10's of thousands of dollars to 100's of thousands of dollars or more, depending upon the particular patent in question and the amount of money at stake if the patent is infringed.

Patent infringement insurance

Patent infringement insurance is an insurance policy provided by one or more insurance companies to protect either an inventor or a third party from the risks of inadvertently infringing a patent.
For inventors, patent infringement insurance covers their legal costs in case they have to sue an infringer to enforce their patent.
For third parties, patent infringement insurance covers their legal costs in case they are sued for patent infringement by an inventor.
Patent infringement insurance is generally considered too expensive to be worth it. The premiums must be high, however, due, at least in part, to the high legal costs of patent infringement cases. A typical patent infringement case in the US costs 1 - 3 million dollars in legal fees for each side. This is despite the fact that 99% of all patent infringement cases are settled. Legal fees in pharmaceutical cases can run 30 million dollars or more, although this should be contrasted with the fact that billions of dollars may be at stake.
In June 2006, a Study for the European Commission on the feasibility of possible insurance schemes against patent litigation risks was published. ^[3] The report concluded that the continuation of the status quo with very little, disproportionately expensive, bespoke patent litigation insurance (PLI) would not meet any objectives for a feasible insurance scheme. Instead, only a mandatory scheme was considered to be viable in order to provide the economic and technical benefits to the EU and individual patentees which would arise from a widespread PLI scheme.

Piracy

Since the 1840's, the expression "patent pirate" has been used as a pejorative term to describe those that infringe a patent and refuse to acknowledge the priority of the inventor. Samuel F. B. Morse, inventor of the telegraph, for example, complained in a letter to friend in 1848 ^[4]
:''I have been so constantly under the necessity of watching the movements of the most unprincipled set of 'pirates' I have ever known, that all my time has been occupied in defense, in putting evidence into something like legal shape that I am the inventor of the Electro-Magnetic Telegraph!! Would you have believed it ten years ago that a question could be raised on that subject?''
Those who accuse others of being patent pirates say that they take advantage of the high cost of enforcing a patent to willfully infringe valid patents with impunity, knowing that the average small inventor does not have the financial resources required to enforce their patent rights. In the US, for example, an inventor must budget $1 million or more in order to initiate patent litigation. They say that patent pirates also take advantage of countries where patent rights are difficult to enforce and willfully infringe in those countries.
Ironically, the term "pirate" has also been used to describe patent owners that vigorously enforce their patents. ^[5] (See also patent troll) Thus whether one deliberately infringes a patent or whether one vigorously enforces a patent, they may be referred to as a pirate by those that feel they are overstepping their bounds.

References

★ Kesan, Jay P. and Ball, Gwendolyn G., ''How Are Patent Cases Resolved? An Empirical Examination of the Adjudication and Settlement of Patent Disputes'' (2005). U Illinois Law & Economics Research Paper [1]

★ See Phillips For the Federal Circuits most recent opinion regarding claim construction.

★ IP Dragon focused on IPR in China including patent infringements.

★ China Law Blog Frequent commentary on China IP law.

Notes

1. (U.S. specific citation) “[F]or a court to find infringement, the plaintiff must show the presence of every element or its substantial equivalent in the accused device.” Wolverine World Wide, Inc. v. Nike, Inc., 38 F.3d 1192, 1199 (Fed. Cir. 1994)
2. 35 U.S.C. 271 - Infringement of patent
3. Patent Litigation Insurance
4. www.fullbooks.com, ''Samuel F. B. Morse, His Letters and Journals by Samuel F. B. Morse'', Part 5 out of 9, retrieved on June 10, 2006
5. see Testimony by Harold C. Wegner, Professor of Law and Director, Intellectual Property Law Program, George Washington University National Law Center before the US Senate Wednesday, March 9, 1994

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PATENT INFRINGEMENT

Elements of patent infringement

Legislation

United Kingdom

Remedies

United States

Direct infringement

Indirect infringement

Active inducement of infringement

Defenses

Remedies

Clearance search and opinion

Patent infringement insurance

Piracy

References

Notes

See also

Notable infringement cases

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