Patent Infringement — What Is It, and What Can You Do About It?

Table of contents

• What is patent infringement?
• Types of infringement
• Consequences of patent infringement
• Defenses against and remedies for patent infringement
• How to avoid patent infringement?
• Conclusion

What is patent infringement?

After you have filed and obtained a patent for your invention, you now have the patent rights to exclude others from manufacturing, using, selling, or offering to sell your invention. If a person or a company does so without your permission (a license), we call this patent infringement. Inversely, you will infringe upon another inventor’s patent if you do so. Simply put, patent infringement is the act of stealing another’s invention.

Also, patents are territorial in nature. What this means is that patent infringement may only be recognized in the country the patent was applied for and granted in, depending on the laws and regulations of that country. The fundamental idea is — if your patent was issued in the U.S., it will only be protected in the U.S. If an infringer infringes on your patent in another country, you will find it extremely difficult to sue for damages.

Types of infringement

Direct infringement:

This is the most common and easiest to understand of infringements. This type of infringement occurs when someone makes, uses, sells, or offers to sell your invention without your permission. Direct infringement also includes the following types of infringement:

• Willful infringement
  where the infringer intentionally infringes upon your patent rights. In these cases, the infringer very likely knows of your patent, yet disregards its existence. Usually, if such an infringer is found guilty, the penalties are extremely high.
• Literal infringement
  when the infringer uses all the elements (or features) listed in your patent’s claims.

For example, you invented and obtained a patent for a lockable box, and the claims in your patent state:

(1) a wooden box rectangular in shape;
(2) a lid on the box fastened to the body with metal hinges;
(3) a lock mechanism on the front of the box;
(4) a turnable knob to lock and unlock the box.

If an alleged infringer made a box with all the features in claims (1) through (4), this would be a case of literal infringement. If the offending product had features (1) through (4) and added handles to the side of the box, it would still constitute literal infringement, as it still covers all of the elements claimed. However, if the product only sported features (1) through (3), this would not be considered infringement under the literal definition as it is missing a claimed feature. But, most of the time, patent infringement cases are not so straightforward. This leads us to the next type of infringement.

• Doctrine of Equivalents infringement
  in this kind of infringement case, the patent owner (patentee) must go through each of the “elements” in his/her patent claims and present to the court which elements match up (are equivalent to) and infringes on his/her patent. Using the previous example, if an alleged infringer constructed a box with all of the features in claims (1) through (4), but changed the “wooden” box in claim (1) to a “plastic” box, this may be considered infringement under the Doctrine of Equivalents since plastic could be regarded as an equivalent to wood. However, this would be up to the court to decide.

Indirect infringement:

Indirect infringement, also called secondary liability, is categorized into two types of infringement — induced infringement and contributory infringement.

• Induced infringement
  is the act of actively persuading or influencing a third party to infringe upon a patent.

For example, Joe, having learned of a new patented product X, feeling that it would make good money, then persuaded his friend Karen, who had the resources to manufacture the product and sell it. Karen then successfully reproduced product X and sold it to several retail stores.

In this example, Karen would have directly infringed upon the product X patent, and Joe would be liable for induced infringement.

• Contributory infringement
  contributing or potentially contributing to someone else’s infringement on a patent. This may be done by supplying, importing, or purchasing a component required to manufacture a patented product, providing instructions for assembling a patented invention, or any other acts that may contribute to patent infringement. Generally, this kind of infringement partially overlaps with inducement infringement as these cases need proof of the infringer’s intent to infringe. And, as with willful infringement, intent to infringe will lead to a higher level of guilt and severe penalties.

Consequences of patent infringement

Patent infringement cases are becoming ever more common with the increasing number of new ideas and inventions in the business world today. Although a large proportion of patent infringement is undiscovered or fly under the radar, those that are brought to light usually lead to litigation cases.

Patent infringement lawsuits are extremely time-consuming and exceedingly costly. Patent lawsuits may take years to reach a final verdict, often with appeals that prolong the process. Losing a patent lawsuit — for both parties — is also significantly damaging, even devastating. In a recent case earlier this year (2020), Wells Fargo Bank N.A. was ordered to pay damages of $102.8 million on top of a previous $200 million from a 2019 trial to USAA for patent infringement on mobile deposit capture technology. For an SME, this amount of money is more than enough to jeopardize the business, not to mention the impact on an individual.

Also, for a patentee, a lawsuit may invoke the defending party to apply for a review of your patent’s validity. In the U.S., the Patent Trial and Appeal Board (PTAB) reviews granted patents for their validity. According to the 2020 Trial Statistics released by the USPTO, more than 45% of the patents petitioned were declared invalid after a post-grant review. In other words, there is a real chance that you may lose some or all of your patent rights via such a process.

Apparently, the risks of pursuing legal action for patent infringement are considerable for all parties involved. That is why over 95% of patent infringement cases end up settling out of court. Often, patent litigation cases will also lead to further licensing of the patent. Settlement does not indicate “losing,” but is a sound business decision made through risk evaluation and cost calculation.

Defenses against and remedies for patent infringement

When accused of infringement, the most common response from the alleged infringer is:

• they were not infringing
• the patent is not valid

Of course, such simple arguments would not be too feasible in the real world. You would have to prove you are not infringing or there is nothing to infringe upon. There are a few ways (or defenses) you can use.

Defenses against patent infringement

• Inequitable conduct defense
  if you can prove the patentee purposefully deceived the PTO during the application for the patent, the patent could be found to be unenforceable (the patentee cannot sue or enforce the patent). Unenforceable patents are canceled of ALL the claims in the patent, whereas a patent may still be enforceable if it has one or more claims still valid. This defense would be the most direct and effective — no patent, no infringement.
• Experimental use exception
  you can argue that your product or process is not infringing for experimental purposes. This is most seen in scientific research or the pharmaceutical industry.
• Prior use exception
  if the subject matter (either a process, machine, manufacture, etc.) is proven to be (1) already in commercial use or on sale (2) 1 year before the patent’s effective filing date or disclosure date, you may be eligible for this exception.
• Patent invalidity
  we touched upon this previously. You can petition to have the patent reviewed by the PTAB, and if they declare it invalid, this shows that you cannot have infringed upon it. Using Quality Insights, you can get a preliminary analysis of how high your chances are in having the patent claims stated invalid. This is done by analyzing the prior art (and the number of prior art), patent strength, and other details regarding that particular patent.

Sue! Or threaten to sue. This answer seems easy, but what can you sue for?

Remedies for patent infringement

• Demand damages
  damages may include some or all of the following:

1. 1. Past damages
   2. Royalties
   3. Lost profits
   4. Legal (attorney) fees

• Demand for injunction
  for injunction relief, you can demand that the alleged infringer

1. 1. stop all infringement activities (use, sell, import, manufacture, etc.)
   2. take preventive measures in avoiding further infringement
   3. destroy all previous infringing products or equipment used for infringement.

Injunctions may be a bit tricky, because of the different patent regulations in each country and how courts will consider the injunctions mentioned above beneficial or fair to society. For instance, if an alleged infringer is producing a beneficial drug to the public at a lower price, a court may deem that stopping its production is not beneficial to society. Also, note the fact that injunction reliefs are only granted if you win the infringement lawsuit.

How to avoid patent infringement?

To avoid infringing on someone’s patent —

• Use prior art. Using inventions and processes already in the public domain is safer.
• Conduct an FTO (Freedom-To-Operate) search, either through Patent Search, Design Search or with the help of patent attorneys.
• License or buy the patent. In some situations, directly approaching the patent owner to license or buy a patent would be much less costly and sometimes less time-consuming than designing your own. Of course, this would only be feasible if the owner is willing to do so.

To avoid others infringing on your patent —

• Note the protection scope of your patent. Is your patent protected in the countries of your targeted markets? Or is it protected in countries where possible infringement will occur?
• Mark your products. If you are a manufacturer, have you properly marked your patented products? In the U.S., patented products are marked with the word “Patent” (or the abbreviation “Pat.”) followed by the patent ID number, comparable to the copyright © or trademark TM.

For both parties, you can also —

• Purchase patent insurance. This is a relatively new form of IP insurance, which comprises two types — a defensive policy to assist if you are sued for infringement and an offensive policy in case you need to sue someone for infringing on your patent. The coverage scope of each insurance will vary according to your needs, but most are mainly designed to cover a portion of the legal costs of patent litigations.
• Seek legal consultation. An experienced patent attorney or consultant will be crucial in analyzing and predicting possible patent infringement risks. Legal fees spent now will be significantly lower than the fees that will arise from future litigations.

Conclusion

Patent infringement is an immense and complicated issue. The issues are not confined to the field of law, but crossover into the entire business world. Patent laws and precedents are continuously evolving and changing. Patent litigation cases among business giants garner much attention, such as the Apple vs. Samsung war that spanned nearly a decade before resolving, or the Apple vs. Qualcomm lawsuit, where the outcome directly influences companies’ business operations (in this case, Apple will need to develop its own 5G production line for future products).

Some cases bring up new issues that may lead to future changes in Patent Law or how it is interpreted. A famous example would be the Warner-Jenkinson case (1997), which highlighted the Doctrine of Equivalents infringement issue by bringing up the question “is a pH level of 5.0 possibly equivalent to a pH level of approximately 6.0 ~ 9.0?”

Global trends are also foretelling possible patent litigation in the future. The 2020 COVID-19 pandemic led to researchers, organizations, pharmaceutical and biotech companies scrambling to develop new vaccines or drugs to combat the virus. With the rush, patent infringement issues are bound to emerge in the near future. More on the topic here on Coronavirus vaccine development.

The vast scope of patent litigation requires inventors, businesses, attorneys to be well informed. A complete and comprehensive database coupled with sound analyses of patent litigation and claims is essential in confronting and responding to patent-related challenges.

How can Patentcloud help you in facing patent infringement issues? Learn more about patent data and in-depth litigation analysis by downloading our white paper — Boundless Patent Strategies: With Invincible Patent Data — From East To West.