The US Supreme Court opinions in the last decade have made life let's call it more challenging for patent owners. I have no reason to expect this to change soon, but now the WSJ reports the "Supreme Court is jumping back into the world of patent law, this time to decide whether to make it easier for patent holders to win increased damages when someone willfully infringes their inventions." But since it involves a chance to reverse the Federal Circuit which vacated damages for willful infringement, who knows!
See WSJ article: The Supreme Court to Consider Patent Damages, New Electricity Case
Copyright © 2015 Robert Moll. All rights reserved.
Showing posts with label willful infringement. Show all posts
Showing posts with label willful infringement. Show all posts
Saturday, October 31, 2015
Friday, February 6, 2015
WSJ - Patent Reform Bill Arises Again in Congress
Tonight, I suggest reading the Wall Street Journal article Patent Reform Bill Arises Again in Congress, discussing Congress' latest effort to change US patent law to address patent litigation abuse.
If you want details, here's Innovation Act 2015, which I will refer to as the Bill. If you want a brief account of Congress' latest patent reform, here's the key changes with brief comments:
1. Attorney Fee Awards - Current law permits the recovery of attorney fees to the prevailing party in an exceptional case, while the new law would require an award attorney fees to the prevailing party unless a judge finds that (1) the legal position and litigation conduct of the non-prevailing party was reasonably justified in law and fact; or (2) special circumstances (e.g., severe hardship to inventor) make attorney fee awards unjust. If the patent owner cannot pay the attorney fees, the court can make "the interested parties" (e.g., investors) pay the attorney fees.
My comment - This is a major change from the American rule where each party pays its own attorney fees. It will reduce patent litigation by smaller companies as they will now have to bear the risk of paying all of the attorneys if they lose and a court decides the legal position was unjustified and cannot establish special circumstances. No doubt many defendants may want this, but the Supreme Court's Highmark and Octane decisions adequately protect the "poor defendants" who hope to reduce patent litigation to just a "sport of kings."
2. Complaints Need Claim Charts - When a patent owners sues for patent infringement, the complaint will need to include a claim chart showing how the claim(s) read on the accused product or process except if it cannot be reasonably known before filing the complaint. Form 18 governing the content of complaints is eliminated, but not if you are pharmaceutical company.
My comment - this higher pleading standard will eliminate some patent infringement suits, because preparing a claim chart makes one stare at the infringement case. If you can't do a claim chart, maybe the case should not be filed. Placing the initial cost of a claim chart on the patent owner is better than asking a court to take on a poorly researched case that wastes court resources and defendant's money. Not sure eliminating Form 18 is useful. The Judicial Conference already says it plans to eliminate Form 18 in 2015 and why give pharmaceuticals "a free pass" on Form 18?
3. PTAB Claim Construction - The Bill proposes to replace the Patent Trial and Appeal Board (PTAB)'s broadest reasonable interpretation (BRI) for claims in inter partes review, post-grant review, and covered business methods with the court's narrower interpretation of claims.
My comment - This will help patents survive invalidity challenges in the USPTO, and better corresponds to the reality that patent owners rarely succeed on motions to amend claims.
4. Limit Discovery - This has a couple of parts: (1) claim construction must happen before much discovery occurs; and (2) only large companies or posting a bond will get discovery of non-core documents.
My comment - Claim construction before significant discovery sounds right, but saying a large company gets discovery without posting a bond only increases their advantages over a smaller company, and may raise disputes on whether certain requested discovery is "core" or "non-core."
5. Willful Infringement - The Bill would require demand letters identify the patent, the patent owner, accused product, and importantly how the product infringes at least one claim of the patent.
My comment - This imposes another claim chart into the process of patent enforcement, which of course helps defendants avoid treble damages by merely showing a claim chart did not accompany the demand letter.
6. Transparency of Ownership - This penalizes a patent owner who fails to update the USPTO within 90 days on changes of ownership with no enhanced damages, or attorney fees and an award of attorney fees to the defendant who spent money researching the ownership information.
My comment - Patent ownership should be transparent during enforcement, but the consequences of missing the 90 day window sounds draconian. Paying the attorney fees to find out the actual ownership should suffice.
7. Stay of Customer Suits - Courts may stay (suspend) a patent infringement suit of a customer lawsuits when the manufacturer of the product challenges the patent.
My comment - Why would anyone sue a customer?
Copyright © 2015 Robert Moll. All rights reserved.
If you want details, here's Innovation Act 2015, which I will refer to as the Bill. If you want a brief account of Congress' latest patent reform, here's the key changes with brief comments:
1. Attorney Fee Awards - Current law permits the recovery of attorney fees to the prevailing party in an exceptional case, while the new law would require an award attorney fees to the prevailing party unless a judge finds that (1) the legal position and litigation conduct of the non-prevailing party was reasonably justified in law and fact; or (2) special circumstances (e.g., severe hardship to inventor) make attorney fee awards unjust. If the patent owner cannot pay the attorney fees, the court can make "the interested parties" (e.g., investors) pay the attorney fees.
My comment - This is a major change from the American rule where each party pays its own attorney fees. It will reduce patent litigation by smaller companies as they will now have to bear the risk of paying all of the attorneys if they lose and a court decides the legal position was unjustified and cannot establish special circumstances. No doubt many defendants may want this, but the Supreme Court's Highmark and Octane decisions adequately protect the "poor defendants" who hope to reduce patent litigation to just a "sport of kings."
2. Complaints Need Claim Charts - When a patent owners sues for patent infringement, the complaint will need to include a claim chart showing how the claim(s) read on the accused product or process except if it cannot be reasonably known before filing the complaint. Form 18 governing the content of complaints is eliminated, but not if you are pharmaceutical company.
My comment - this higher pleading standard will eliminate some patent infringement suits, because preparing a claim chart makes one stare at the infringement case. If you can't do a claim chart, maybe the case should not be filed. Placing the initial cost of a claim chart on the patent owner is better than asking a court to take on a poorly researched case that wastes court resources and defendant's money. Not sure eliminating Form 18 is useful. The Judicial Conference already says it plans to eliminate Form 18 in 2015 and why give pharmaceuticals "a free pass" on Form 18?
3. PTAB Claim Construction - The Bill proposes to replace the Patent Trial and Appeal Board (PTAB)'s broadest reasonable interpretation (BRI) for claims in inter partes review, post-grant review, and covered business methods with the court's narrower interpretation of claims.
My comment - This will help patents survive invalidity challenges in the USPTO, and better corresponds to the reality that patent owners rarely succeed on motions to amend claims.
4. Limit Discovery - This has a couple of parts: (1) claim construction must happen before much discovery occurs; and (2) only large companies or posting a bond will get discovery of non-core documents.
My comment - Claim construction before significant discovery sounds right, but saying a large company gets discovery without posting a bond only increases their advantages over a smaller company, and may raise disputes on whether certain requested discovery is "core" or "non-core."
5. Willful Infringement - The Bill would require demand letters identify the patent, the patent owner, accused product, and importantly how the product infringes at least one claim of the patent.
My comment - This imposes another claim chart into the process of patent enforcement, which of course helps defendants avoid treble damages by merely showing a claim chart did not accompany the demand letter.
6. Transparency of Ownership - This penalizes a patent owner who fails to update the USPTO within 90 days on changes of ownership with no enhanced damages, or attorney fees and an award of attorney fees to the defendant who spent money researching the ownership information.
My comment - Patent ownership should be transparent during enforcement, but the consequences of missing the 90 day window sounds draconian. Paying the attorney fees to find out the actual ownership should suffice.
7. Stay of Customer Suits - Courts may stay (suspend) a patent infringement suit of a customer lawsuits when the manufacturer of the product challenges the patent.
My comment - Why would anyone sue a customer?
Copyright © 2015 Robert Moll. All rights reserved.
Wednesday, June 27, 2012
Bard Peripheral v. W.L. Gore - Judges to Decide Objective Prong of Willful Infringement
A determination of willful infringement may greatly increase the damages. Under 35 USC 284, a judge has discretion to increase damages up to three times to deter patent infringement.
In Seagate, the Federal Circuit defines a test for willful infringement that requires clear and convincing evidence (1) that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent, and (2) that the infringer had knowledge (or should have known) of this risk.
In Bard Peripheral v. W.L. Gore, the Federal Circuit determined that a judge should decide the first prong: whether the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.
In the past, a jury would decide willfulness, but the Bard defendant asserted a judge should determine whether the infringer's actions constituted an objectively high-likelihood of infringement.
The Federal Circuit agreed stating:
After reviewing the Supreme Court's precedent in similar contexts, as well as our own, we conclude that simply stating that willfulness is a question of fact over-simplifies the issue. While the ultimate question of willfulness based on an assessment of the second prong of Seagate may be a question of fact, Seagate also requires a threshold determination of objective recklessness. That determination entails an objective assessment of potential defenses based on the risk presented by the patent. Those defenses may include questions of infringement but also can be expected in almost every case to entail questions of validity that are not necessarily dependent on the factual circumstances of the particular party accused of infringement.
In considering the standard applicable to the objective prong of Seagate, it can be appreciated that "the decision to label an issue a 'question of law,' a 'question of fact,' or a 'mixed question of law and fact' is sometimes as much a matter of allocation as it is of analysis." Miller v. Fenton, 474 U.S. 104, 113-14 (1985). When an "issue falls some-where between a pristine legal standard and a simple historical fact, the fact/law distinction at times has turned on a determination that, as a matter of sound administration of justice, one judicial actor is better positioned than another to decide the issue in question." Id. at 114; see also Markman v. Westview Instruments, Inc., 517 U.S. 370, 388 (1996) (applying this test to determine that claim construction is best left to the judge).
We believe that the court is in the best position for making the determination of reasonableness. This court therefore holds that the objective determination of recklessness, even though predicated on underlying mixed questions of law and fact, is best decided by the judge as a question of law subject to de novo review.
Thus, judges' gatekeeper role on willful infringement should help to prevent excessive damage awards in the future.
Copyright © 2012 Robert Moll. All rights reserved.
In Seagate, the Federal Circuit defines a test for willful infringement that requires clear and convincing evidence (1) that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent, and (2) that the infringer had knowledge (or should have known) of this risk.
In Bard Peripheral v. W.L. Gore, the Federal Circuit determined that a judge should decide the first prong: whether the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.
In the past, a jury would decide willfulness, but the Bard defendant asserted a judge should determine whether the infringer's actions constituted an objectively high-likelihood of infringement.
The Federal Circuit agreed stating:
After reviewing the Supreme Court's precedent in similar contexts, as well as our own, we conclude that simply stating that willfulness is a question of fact over-simplifies the issue. While the ultimate question of willfulness based on an assessment of the second prong of Seagate may be a question of fact, Seagate also requires a threshold determination of objective recklessness. That determination entails an objective assessment of potential defenses based on the risk presented by the patent. Those defenses may include questions of infringement but also can be expected in almost every case to entail questions of validity that are not necessarily dependent on the factual circumstances of the particular party accused of infringement.
In considering the standard applicable to the objective prong of Seagate, it can be appreciated that "the decision to label an issue a 'question of law,' a 'question of fact,' or a 'mixed question of law and fact' is sometimes as much a matter of allocation as it is of analysis." Miller v. Fenton, 474 U.S. 104, 113-14 (1985). When an "issue falls some-where between a pristine legal standard and a simple historical fact, the fact/law distinction at times has turned on a determination that, as a matter of sound administration of justice, one judicial actor is better positioned than another to decide the issue in question." Id. at 114; see also Markman v. Westview Instruments, Inc., 517 U.S. 370, 388 (1996) (applying this test to determine that claim construction is best left to the judge).
We believe that the court is in the best position for making the determination of reasonableness. This court therefore holds that the objective determination of recklessness, even though predicated on underlying mixed questions of law and fact, is best decided by the judge as a question of law subject to de novo review.
Thus, judges' gatekeeper role on willful infringement should help to prevent excessive damage awards in the future.
Copyright © 2012 Robert Moll. All rights reserved.
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