Patent Defenses and Remedies. Intro to IP – Prof Merges 2.3.10. Defenses. Inequitable Conduct Patent Exhaustion. Remedies in patent infringement cases. • Prosecution History Estoppel. • Reverse Doctrine of Equivalents. • W ith Authority. • Exhaustion/First Sale Doctrine.
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Intro to IP – Prof Merges
• Reverse Doctrine of Equivalents
• With Authority
• Exhaustion/First Sale Doctrine
• Implied License
• Shop Right
• Repair (not reconstruction)
• Experimental Use
• common law
• §271(e) (Bolar Amendment – for purposes of FDA approval of generics)
• Medical Activities § 287(c) (suits against MDs, hospitals)
Clear and convincing evidence standard
Presumption of Validity
“Inequitable conduct resides in failure to disclose material information, or submission of false material information, with an intent to deceive . . . .”
-- p. 327
• Inequitable conduct
• Duty of Candor
•failure to disclose prior art
•failure to disclose rejection of claims
•misleading partial translation
•characterizing prophetic examples as
•false claim of small entity status
•failure to disclose all true inventors
• Inequitable conduct
• Duty of Candor
Master License (required non-coverage notice to Intel Customers)
Specific product license (no customer restrictions)
LG’s right to
Master License (required non-coeverage notice to Intel Customers)
Specific product license (no customer restrictions)
“[T]he provision requiring notice to Quanta appeared only in the Master Agreement, and LGE does not suggest that a breach of that agreement would constitute a breach of the License Agreement. Hence, Intel's authority to sell its products embodying the LGE Patents was not conditioned on the notice or on Quanta's decision to abide by LGE's directions in that notice.”-- 128 S.Ct. 2109, 2121-2122
Quanta strongly suggests that effective restrictions/not-ice in license agreement might bind downstream users
Specific product license WITH requirement to restrict customers; to give notice of no license
“We note that the authorized nature of the sale to Quanta does not necessarily limit LGE's other contract rights. LGE's complaint does not include a breach-of-contract claim, and we express no opinion on whether contract damages might be available even though exhaustion operates to eliminate patent damages.” – 128 S.Ct. at 2122
in District Court
Damages assessed for
this period if marking
(or actual notice)
The several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.
MercExchange, L.L.C., holds a number of patents, including a business method patent for an electronic market designed to facilitate the sale of goods between private individuals by establishing a central authority to promote trust among participants. See U.S. Patent No. 5,845,265.
A method and apparatus for creating a computerized market for used and collectible goods by use of a plurality of low cost posting terminals and a market maker computer in a legal framework that establishes a bailee relationship and consignment contract with a purchaser of a good . . . in an electronic market for used goods while assuring the safe and trusted physical possession of a good with a vetted bailee.
Inventors: Woolston; Thomas G. (Arlington, VA) Assignee:MercExchange, L.L.C. (Alexandria, VA) Filed: November 7, 1995
“Substantial evidence was adduced at trial showing that the plaintiff does not practice its inventions and exists merely to license its patented technology to others. Indeed, the plaintiff has made numerous comments to the media before, during, and after this trial indicating that it did not seek to enjoin eBay but rather sought appropriate damages for the infringement.”
-- 275 F.Supp.2d 695, at 712
(1) [T]hat it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. – book, p. 935
Too mechanical: “[T]he Court of Appeals departed in the opposite direction from the four-factor test. The court articulated a “general rule,” unique to patent disputes… Just as the District Court erred in its categorical denial of injunctive relief, the Court of Appeals erred in its categorical grant of such relief.
[S]ome patent holders, such as university researchers or self-made inventors, might reasonably prefer to license their patents, rather than undertake efforts to secure the financing necessary to bring their works to market themselves. Such patent holders may be able to satisfy the traditional four-factor test, and we see no basis for categorically denying them the opportunity to do so.
We hold only that the decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and that such discretion must be exercised consistent with traditional principles of equity, in patent disputes no less than in other cases governed by such standards.
The lesson of the historical practice, therefore, is most helpful and instructive when the circumstances of a case bear substantial parallels to litigation the courts have confronted before. -- 938
An industry has developed injunctive relief rests within the equitable discretion of the district courts, and that such discretion must be exercised consistent with in which firms use patents not as a basis for producing and selling goods but, instead, primarily for obtaining licensing fees. For these firms, an injunction, and the potentially serious sanctions arising from its violation, can be employed as a bargaining tool to charge exorbitant fees to companies that seek to buy licenses to practice the patent. When the patented invention is but a small component of the product the companies seek to produce and the threat of an injunction is employed simply for undue leverage in negotiations, legal damages may well be sufficient to compensate for the infringement and an injunction may not serve the public interest.
“[T]he court shall award [the patentee] damages adequate to compensate for the infringement but in no event less than a reasonable royalty for the use made of the invention by the infringer.”
“The court in exceptional cases may award reasonable attorney fees to the prevailing party.”
1. Should a party's assertion of the advice of counsel defense to willful infringement extend waiver of the attorney-client privilege to communications with that party's trial counsel? See In re EchoStar Commc'ns Corp., 448 F.3d 1294 (Fed.Cir.2006).
2. What is the effect of any such waiver on work-product immunity?
3. Given the impact of the statutory duty of care standard announced in Underwater Devices, Inc. v. Morrison-Knudsen Co., 717 F.2d 1380 (Fed.Cir.1983), on the issue of waiver of attorney-client privilege, should this court reconsider the decision in Underwater Devices and the duty of care standard itself?
When the damages are not found by a jury, the court shall assess them. In either event the court may increase the damages up to three times the amount found or assessed. Increased damages under this paragraph shall not apply to provisional rights under section 154(d) of this title.
The court may receive expert testimony as an aid to the determination of damages or of what royalty would be reasonable under the circumstances.
“Where ... a potential infringer has actual notice of another's patent rights, he has an affirmative duty to exercise due care to determine whether or not he is infringing. Such an affirmative duty includes, inter alia,the duty to seek and obtain competent legal advice from counsel before the initiation of any possible infringing activity.” – Underwater Devices
The duty of due care standard has led to punitive damages based on nothing more than a negligent failure to proceed with “due care.” See, e.g., Stryker Corp. v. Davol, Inc., 234 F.3d 1252, 1259 (Fed. Cir. 2000) (declining to overturn jury finding of willful infringement when evidence indicated that reliance on advice of counsel was “unreasonable”)
But the duty of due care standard shifts to the defendant the burden of demonstrating that it has acted with sufficient care to forestall a finding of willful infringement. See Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmBH v. Dana Corp., 383 F.3d 1337, 1349 (Fed. Cir. 2004)(en banc) (Dyk, J.) (this “effectively shifts the burden of proof on the issue of willfulness from the patentee to the infringer”).
Accordingly, we overrule the standard set out in willfulness as a statutory condition of civil liability for punitive damages. Underwater Devices and hold that proof of willful infringement permitting enhanced damages requires at least a showing of objective recklessness. Because we abandon the affirmative duty of due care, we also reemphasize that there is no affirmative obligation to obtain opinion of counsel.