Patent Law

Subscribe to Patent Law via RSS

On February 27, 2013, Congress proposed the “Saving High Tech Innovators from Egregious Legal Disputes (SHIELD) Act.” This bill is designed to stem the tide of patent litigation initiated by non-practicing entities, also known as “patent trolls.” A non-practicing entity (“NPE”) generally operates by forming a shell corporation to acquire and hold patents, then litigating against anyone who uses the covered technology without a license. The NPE’s goal is to monetize its patent portfolio through license revenues obtained in connection with patent infringement settlement agreements. According to President Obama, the NPE business model is designed to “leverage and hijack somebody else’s idea and see if [the NPEs] can extort some money out of them.”

Business is booming. Numerous NPEs have come into existence in recent years, initiating hundreds of patent infringement lawsuits. Estimates from 2011 show that NPEs received as much as $29 billion from U.S. companies. At the heart of the NPE business model is the stark reality that defending a patent infringement lawsuit costs hundreds of thousands, and often millions of dollars. Some patent trolls therefore assert dubious claims against accused infringers knowing that most defendants will settle by executing a patent license rather than risk the costs and uncertainty of patent litigation. The SHIELD Act is designed to address this issue by shifting risk back to the NPEs. Its authors hope that shifting enough risk to NPEs who instigate frivolous patent infringement lawsuits will discourage and reduce such meritless lawsuits.Continue Reading The SHIELD Act – Death of the Patent Troll, or Incentive to Infringe?

By Audrey A. Millemann

There is an inherent conflict between the antitrust laws and the patent laws.  The antitrust laws protect competition and benefit consumers, in part, by prohibiting monopolies.  The patent laws promote innovation and reward inventors, in part, by awarding the patent owner a limited monopoly which inhibits competition.

Sometimes the antitrust laws and the patent laws intersect.  A defendant in a patent infringement suit may assert an antitrust claim as an affirmative defense or as a counterclaim.  One particular type of antitrust claim asserted by a patent owner’s competitors is a “Walker Process claim.”  This is a claim for monopolization under §2 of the Sherman Act based on the patent owner’s fraudulent procurement of a patent.  The claim arises from the Supreme Court’s decision in Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172 (1965), in which the Court held that a plaintiff could state a claim for antitrust liability if the plaintiff could show that: (1) the defendant procured a patent by knowing and willful fraud on the United States Patent and Trademark Office (or by maintaining and enforcing a patent knowing of the fraudulent manner in which it was obtained); and (2) the elements required for a claim under §2 of the Sherman Act were met.

Continue Reading Antitrust and Patent Laws: Separate Standing

by Audrey Millemann

The holidays are upon us. Given that everything seems to be protected by intellectual property rights, maybe someone should protect Christmas!

Could Santa Claus patent Christmas? Well, as a result of the America Invents Act (“AIA”), enacted in September 2011, the United States switches from a “first to invent” to a “first inventor to file” patent system effective March 16, 2013. U.S. patent law will now be more consistent with the patent laws of the rest of the world, although U.S. law still provides a one-year grace period in which a patent application can be filed after certain types of public disclosures by the inventor, while most foreign laws require absolute secrecy before filing. 

So, maybe Santa Claus could file a patent application if he was the first to invent something that has not been publicly disclosed in the last year. If he filed the application before March 16, 2013, the application would be governed by the old patent laws. If he filed it after March 16, 2013, it would be governed by the AIA and Santa would have to be the first inventor to file an application for that invention. Of course, there may be no other inventors competing with Santa so it might not be much of a problem.  And, as to public disclosures, that should not be a problem since Santa has been operating in secret for hundreds of years.Continue Reading You Can’t Patent Christmas!

By: Audrey A. Millemann

In Akamai Technologies, Inc. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012), an en banc Federal Circuit Court of Appeals was divided over the issue of “divided infringement” in the context of inducing infringement. 

A party is liable for inducing infringement if it instructs or causes another party to infringe a patent.  Thus, there is an act of direct infringement that results from the inducement.  “Divided infringement” of a method patents exists when multiple parties perform different steps of the claimed method.  Continue Reading A Court Divided Over Divided Infringement

By: Audrey A. Millemann

The law of willful patent infringement has changed.  After the Federal Circuit’s decision in Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 682 F.3d 1003 (Fed. Cir. 2012), it will now be more difficult for patent owners to prove willful infringement and recover enhanced drawings.

In Bard, the plaintiff, Bard Peripheral, owned a patent covering blood vessel grafting technology.  Bard filed suit for patent infringement and the case was tried to a jury in the district court for the District of Arizona.  The jury found that Gore had infringed Bard’s patent and that the infringement was willful, awarding Bard $185 million in compensatory damages and $185 million in enhanced damages for willfulness.Continue Reading Willful Patent Infringement Now Harder to Prove