intellectual property litigation - puttering in the study · patent prosecution zu.s. patent &...

Intellectual Property Litigation:Intellectual Property Litigation:What Civil What Civil Litigators Litigators Need to KnowNeed to Know

Michael C. SmithThe Roth Law Firm

Marshall, Texashttp://mcsmith.blogs.com/eastern_district_of_texas/

http://mcsmith.blogs.com/eastern_district_of_texas/

Intellectual Property LitigationIntellectual Property Litigation

PatentCopyrightTrademarkTrade Secrets

Patent LitigationPatent Litigation

Patent LitigationPatent Litigation

Obtaining the PatentPrefiling InquiryVenueClaims Construction, a.k.a. MarkmanInfringementDefenses (invalidity & unenforceability)Remedies (injunction & damages)

Patent ProsecutionPatent Prosecution

U.S. Patent & Trademark OfficeProsecution eventually leads to the grant of

a patent, which has several “claims” that define the scope of what the patent covers.Patentee may bring an action for patent

infringement. 35 U.S.C. § 281.Patents are a form of personal property and

are freely assignable. 35 U.S.C. § 261.

Prefiling Prefiling InquiryInquiry“Infringement analysis" required.Filing law firm must “at a bare minimum, apply the claims of each and every patent that is being brought into the lawsuit to an accused device and conclude that there is a reasonable basis for a finding of infringement of at least one claim of each patent so asserted.” View Engineering, Inc. v. Robotic Vision Systems, Inc., 208 F.3d 981, 986 (Fed. Cir. 2000).

Prefiling Prefiling Inquiry RequirementsInquiry Requirements

Attorney is required to: (1) independently interpret the claims, and (2) independently compare the accused device with the construed patent claims.Antonious v. Spalding & Evenflo Cos., Inc., 275 F.3d 1066, 1072-73 (Fed. Cir. 2002).

Prefiling Prefiling Inquiry Inquiry -- ReviewReviewClaim interpretation is examined under FRCP 11(b)(2) to determine if a reasonable attorney would have concluded that the proposed claim construction was "frivolous.“Infringement conclusion is examined under

FRCP 11(b)(3) to determine if an objectively reasonable attorney would believe, "based on some actual evidence uncovered during theprefiling investigation, that each claim limitation reads on the accused device." Id. at 1074.

Prefiling Prefiling Inquiry Inquiry -- DefensesDefensesPatent holder with no knowledge that a patent is

invalid and who undertakes no independent investigation into possible defenses may rely on the presumption of validity, at least when the patent has been successfully licensed to third parties. See Q-Pharma., 360 F.3d at 1303.

Regional circuit law may still require a party to consider whether there are any obvious affirmative defenses. See FDIC v. Calhoun, 34 F.3d 1291, 1299 (5th Cir. 1994).

Patent VenuePatent Venue

“All too often, patent infringement suits begin with a battle over where the war is to be fought.”

Wydick, Venue in Actions for Patent Infringement, 25 Stan. L. Rev. 551 (1973).

Patent VenuePatent Venue

Patent infringement cases may be filed in the judicial district: (1) where the defendant resides; or (2) where the defendant has committed acts of infringement and has a regular and established place of business. 28 U.S.C. § 1400(b)A defendant that is a corporation “shall be deemed

to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced.” 28 U.S.C. § 1391.

Patent VenuePatent VenueVenue is proper in any district where a corporate

defendant has ‘minimum contacts.”. If the case arises out of the defendant’s contacts

with the district, i.e. the sale of the alleged infringing product in the district of suit, venue is proper under principles of “specific” personal jurisdiction.

If the case does not arise out of the contacts, principles of “general” personal jurisdiction require that the defendant’s contacts with the district be “continuous and systematic.”

Claims ConstructionClaims Construction

The process of determining what the claims of a patent mean is an issue of law for the court, not an issue of fact for the jury. Markman v. Westview Instruments, Inc., 52 F.3d 967, 970 (Fed.Cir. 1995).Claims construction is reviewed de novo. See Glaxo Group Ltd. v. Apotex, Inc., 376 F.3d 1339, 1345 (Fed. Cir. 2004).

Claims ConstructionClaims Construction

The Federal Circuit reverses at least part of district courts’ claims construction rulings in over 40% of cases.The Federal Circuit will not review a claim construction ruling prior to trial on the merits.

InfringementInfringement

Direct ContributoryInducing

Direct InfringementDirect InfringementThe defendant makes, uses, sells, offers to sell or imports the invention defined by the claims of a patent without the authority of the patent owner. 35 U.S.C. § 271(a)A defendant is liable for patent infringement even if his product or process infringes only one independent claim of the plaintiff’s patent. See, e.g., Markman v. Westview Instr., Inc., 52 F.3d 967 (Fed. Cir. 1995).Preponderance of the evidence standard.

Contributory InfringementContributory Infringement

“[S]elling … a patented machine …knowing the same to be … an infringement." 35 U.S.C. § 271(c).Intent is not required - only proof of a defendant’s knowledge that it caused infringement. See, e.g., Preemption Devices, Inc. v. Minnesota Min. & Mfg. Co., 803 F.2d 1170 (Fed. Cir. 1986).

Inducement to InfringeInducement to Infringe

A person induces infringement by knowingly aiding and abetting another’s direct infringement. See 35 U.S.C. § 271(b).Proof of intent to induce infringement isrequired. See, e.g., Water Technologies Corp. v. Calco, Ltd., 850 F.2d 660 (Fed. Cir. 1988).

Doctrine of EquivalentsDoctrine of Equivalents

Alternative to literal infringementInfringement exists if the accused device performs substantially the same function, in substantially the same way to achieve substantially the same result? See, e.g., Atlas Powder Co. v. E.I. duPont& Co., 750 F.2d 1569 (Fed. Cir. 1984) (“function, way, result” test). Subject to prosecution history estoppel.

Prosecution History Prosecution History EstoppelEstoppel

Patent claims must be interpreted in light of the proceedings before the Patent and Trademark Office. Schriber- Schroth Co. v. Cleveland Trust Co., 311 U.S. 211, 220-21 (1940). Patentee is estopped from “regaining through litigation, coverage of subject matter relinquished during prosecution of the application for the patent.” Wang Labs., Inc. v. Mitsubishi Electronics America, Inc., 103 F.3d 1571, 1577-78 (Fed. Cir. 1997).

Patent LitigationPatent LitigationDefensesDefenses

LimitationsLimitations

Limitations - six years. 35 U.S.C. § 286. Since infringement is a continuing tort, limitations simply acts to limit the period of time for which damages are recoverable.

LachesLachesWhen patentee’s delay in bringing the suit is unreasonable and inexcusable and the infringersuffered material prejudice from the delay, the patentee's claim for damages prior to suit may be barred. See A.C. Auckerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020 (Fed. Cir. 1992).Presumed when delay of over six years after knew / should have known of infringement. Shifts burden to the patentee to show delay was reasonable and/or infringer suffered no prejudice. Legal issue. Auckerman, 960 F.2d at 1028, 1031.

Equitable Equitable EstoppelEstoppelIf equitable estoppel is established, the patentee’s

suit for patent infringement is barred altogether. Equitable estoppel consists of:

– (1) the patentee misled the infringer to infer that the patentee does not intend to enforce his patent rights against the infringer;

– (2) the alleged infringer relied on the patentee’s conduct; and

– (3) due to its reliance, the alleged infringer will be materially prejudiced if the patentee is allowed to pursue his claim.

Issue of law. Auckerman, 960 F.2d at 1028, 1031.

Marking & NoticeMarking & NoticePatentee required to provide notice to the

public that a product is patented by marking or its packaging. 35 U.S.C. § 287.Failure to mark will bar the patentee from

recovering pre-notice damages.

InvalidityInvalidityEvery patent is presumed to be valid. 35 U.S.C. §

282. A claim that a patent is invalid must be proven by

“clear & convincing” evidence.The Federal Trade Commission has proposed that

the burden of proof on validity challenges be reduced to a "preponderance of the evidence" standard. See "To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy," Federal Trade Commission (2003).

Invalidity DefensesInvalidity DefensesNovelty - 35 U.S.C. § 101Anticipation - 35 U.S.C. § 102 (prior art)Enablement, written description & best mode. 35

U.S.C. § 112 Obviousness. 35 U.S.C. § 103. Definiteness. See Union Pacific Res. Co. v.

Chesapeake Energy Corp., 236 F.3d 684, 692 (Fed. Cir. 2001).Inventorship errors. See Pannu v. Iolab Corp., 155

F.3d 1344, 1350 (Fed. Cir. 1998).

Inequitable ConductInequitable ConductAlso referred to as “fraud on the patent office.”Failure to disclose material information or

submission of false information to the patent office during patent’s prosecution with an intent to deceive renders a patent unenforceable. SeeKingsdown Med. Consultants, Ltd. v. Holister Inc., 863 F.2d 867, 872, 877 (Fed. Cir. 1988) (en banc). Unfounded accusations of fraud on the patent

office have been called a “plague” by the Federal Circuit. See Allied Colloids Inc. v. Am. Cyanamid Co., 64 F.3d 1570, 1578 (Fed. Cir. 1995).

Inequitable ConductInequitable ConductMust be stated with particularity. Fed. R. Civ. P.

9(b); see Ferguson Beauregard/Logic Controls, Div. of Dover Res., Inc. v. Mega Sys., LLC, 350 F.3d 1327, 1344 (Fed. Cir. 2003).

For the court, not the jury, but the court has great discretion in determining how to decide the issue, and can submit the issues of materiality and intent to the jury, or submit the entire issue to the jury on an advisory basis. Hebert v. Lisle Corp., 99 F.3d 1109 (Fed. Cir. 1996).

RemediesRemedies

Injunctive ReliefDamages

Injunctive ReliefInjunctive Relief

Injunction to preclude future infringement during the remaining term of the patent. 35 U.S.C. § 283.Irreparable harm is presumed when patent infringement and validity are established. See, e.g, Richardson v. Suzuki Motor Co., 868 F.2d 1226 (Fed. Cir. 1989). Injunctive relief is discretionary with the court, but it is typically granted. See Roche Prods., Inc. v.Bolar Pharm. Co., 733 F.2d 858 (Fed. Cir. 1984).

DamagesDamagesReasonable royalty or lost profits, interest and costs. 35 U.S.C. §§ 283, 284; see Stickle v.Heublein, Inc., 716 F.2d 1550 (Fed. Cir. 1983) (section 284 does not limit the types of damages that can be awarded). Reasonable royalty is shown using several factors in a hypothetical negotiation between the parties, with the plaintiff as a willing licensor and theinfringer as a willing licensee. Georgia Pacific Corp. v. United States Plywood Corp., 318 F.Supp. 1116, 1119-20 (S.D.N.Y. 1970).

Willful InfringementWillful InfringementCourt can consider the infringer’s commercial behavior and state of mind to determine whether the infringement was "willful.”Plaintiff must prove willful infringement by clear and convincing evidence. See, e.g., Hoechst Celanese Corp. v. BP Chem. Ltd., 78 F.3d 1575 (Fed. Cir. 1996). If willfulness is found, damages may be increased up to three times the amount found or assessed by the court or jury. 35 U.S.C. § 284.

Willful InfringementWillful InfringementWillfulness is alleged in over 90% of cases.Willfulness is virtually never decided on summary judgment, and is found to exist about half the time at trial, The Federal Circuit affirms over 90% of willfulness findings. Willfulness is bifurcated at trial about a third of the time.

See Kimberly A. Moore, Empirical Statistics on Willful Patent Infringement, 14 Fed. Cir. Bar J. 227 (2004).

Attorneys FeesAttorneys Fees

Attorney's fees to be awarded to the prevailing party in "exceptional cases." 35 U.S.C. § 285. “Exceptional cases” include inequitable conduct before the PTO, litigation misconduct such as vexatious or unjustified litigation or frivolous filings, and willful infringement. Glaxo Group Ltd. v. Apotex, Inc., 376 F.3d 1339, 1345 (Fed. Cir. 2004).

Top Five Things Top Five Things NotNot To Say to To Say to Patent LawyersPatent Lawyers

5. Do I need a decoder ring to read the source code?


5. Do I need a decoder ring to read the source code?4. Sure, I've had Markman hearings. Our probate court has them every Monday.


5. Do I need a decoder ring to read the source code?4. Sure, I've had Markman hearings. Our probate court has them every Monday.3. The guy in the black robe is the judge. Am I going too fast for you?


5. Do I need a decoder ring to read the source code?4. Sure, I've had Markman hearings. Our probate court has them every Monday.3. The guy in the black robe is the judge. Am I going too fast for you? 2. You know, the judge should be good at construing claims. He used to be a claims adjuster before he went to law school.


1. Could you send me another copy of our source code? I put it on my kid's laptop, and he and his friends are still playing with it.

Top Five Things Top Five Things ToTo Say to Say to Patent LawyersPatent Lawyers

5. You know, Markman is a lot more stressful than a jury trial. I don't know how you guys do it.


5. You know, Markman is a lot more stressful than a jury trial. I don't know how you guys do it. 4. I just keep worrying about prosecution history estoppel’s effect on the doctrine of equivalents.


5. You know, Markman is a lot more stressful than a jury trial. I don't know how you guys do it. 4. I just keep worrying about prosecution history estoppel’s effect on the doctrine of equivalents.3. Do you have some associates that could work on this?


5. You know, Markman is a lot more stressful than a jury trial. I don't know how you guys do it. 4. I just keep worrying about prosecution history estoppel’s effect on the doctrine of equivalents.3. Do you have some associates that could work on this? 2. I really hate to ask, but do you have some moreassociates that could work on this?

Top Five Things To Say to Top Five Things To Say to Patent LawyersPatent Lawyers

1. We just aren't representing our client unless we ask to exceed the page limits.

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