Patent_infringement

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Patent infringement

Patent infringement is the act of utilizing a patented invention without permission from the patent holder. Permission may typically be granted in the form of a licence. In many countries a use is required to be commercial (or to have a commercial purpose) to constitute a patent infringement.

The scope of the patented invention or the extent of protection is defined in the claims of the granted patent. In other words, the terms of the claims inform people what they are not allowed to do without the permission of the patent holder.

Patents are territorial and infringement is only possible in a country where a patent is in force. The scope of protection may also vary from country to country, because the patent is examined by patent office in each country/area and may have some difference of patentability, so that a granted patent has not worldwide applicability.

Elements of patent infringement

Typically, any party that manufactures, imports, 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. The process employed involves "reading" a claim onto the technology of interest. If all of the claim's elements are found in the technology, the claim is said to "read on" the technology; if a single element from the claim is missing from the technology, the claim does not literally read on the technology and the technology does not infringe the patent with respect to that claim.

In response to allegations of infringement, an accused infringer will generally assert one or more of the following:

They are not practicing the patented invention;
They are not performing any infringing act in the territory covered by the patent;
The patent has expired;
The patent (or the particular claim(s) alleged to be infringed) is invalid. This may be as a consequence of not meeting patentability criteria or a formal defect that makes the patent invalid or unenforceable;
They have obtained a license under the patent;
The patent holder is infringing patent rights belonging to the accused infringer, which can result in settlement of a dispute and cross-licensing.

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.

Legislation

Japan

Infringement under Japan patent law is defined by Article 101 of Patent Act (Act No. 121 of 1959), which shows the following acts shall be deemed to constitute infringement of a patent right or an exclusive license:

(i) where a patent has been granted for an invention of a product, acts of producing, assigning, etc., importing or offering for assignment, etc. any product to be used exclusively for the producing of the said product as a business;
(ii) where a patent has been granted for an invention of a product, acts of producing, assigning, etc., importing or offering for assignment, etc. any product (excluding those widely distributed within Japan) to be used for the producing of the said product and indispensable for the resolution of the problem by the said invention as a business, knowing that the said invention is a patented invention and the said product is used for the working of the invention;
(iii) where a patent has been granted for an invention of a process, acts of producing, assigning, etc., importing or offering for assignment, etc. any product to be used exclusively for the use of the said process as a business; and
(iv) where a patent has been granted for an invention of a process, acts of producing, assigning, etc., importing or offering for assignment, etc. any product (excluding those widely distributed within Japan) to be used for the use of the said process and indispensable for the resolution of the problem by the said invention, knowing that the said invention is a patented invention and the said product is used for the working of the invention as a business.

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.

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. One also commits indirect infringement if he actively and knowingly induces another to infringe, and is liable for that infringement. Types of "indirect infringement" include "contributory infringement" and "induced infringement."

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.

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.

An exculpatory opinion is also possible.

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. 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 1840s, 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

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. (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.

Threat to bring a patent infringement action

"A threat to bring a patent infringement action is highly likely to influence the commercial conduct of the person threatened, which is why the law of some countries, including the UK, provides that the making of a groundless threat to sue is, within certain carefully prescribed limits, an actionable wrong in itself."

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
See Phillips For the Federal Circuits most recent opinion regarding claim construction (United States patent law).