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Chapter 4: An Overview of Patents

VIII. Infringement

A claim is infringed when it reads on the alleged-infringing article or process. A claim reads on something when all the elements of the claim are present in that something. It is only necessary to infringe one claim of a patent for the patent to be infringed.

Section 271(a) indicates that infringement occurs when one of the rights to exclude is violated:

Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent. {FN50: 35 U.S.C. §271(a)}

Subsection (b) also extends infringement beyond direct infringement:

Whoever actively induces infringement of a patent shall be liable as an infringer. {FN51: 35 U.S.C. §271(b)}

Subsection (c) covers contributory infringement:

Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer. {FN52: 35 U.S.C. §271(c)}

In patent litigation, it is common to make a claims chart that shows each element of each claim that is being infringed, and then indicate which aspect of the infringing device or method corresponds to each element in the claims chart. If there is any element that does not have a corresponding aspect in the alleged-infringing device or method, then the claim with that element is not literally infringed.

VIII.A. Nonliteral Infringement

A claim may be under the “doctrine of equivalents” infringed even if it does not literally read on a thing. For example, if the claim is to A, B, and C, and the alleged-infringing thing has A, B, and D, there is no literal infringement. However, if D performs substantially the same function in substantially the same way to get substantially the same result as C, then there may be infringement under the doctrine of equivalents. The extension of a claim under the doctrine of equivalents is limited by “prosecution history estoppel” (sometimes called “file wrapper estoppel”) – if during the prosecution of the patent application the applicant has limited a claim to avoid prior art, it cannot be extended to what was previously disclaimed.

Two recent decisions dramatically limit the scope of the doctrine of equivalents. It may not be possible to assert the doctrine of equivalents to cover disclosed but unclaimed embodiments. {FN53: Johnson & Johnston v. R.E. Service, 285 F.3d 1046, 62 USPQ2d 1225 (Fed. Cir. 2002)} And in light of the Supreme Court’s decision in Festo, {FN54: Festo v. Shoketsu Kinzoku Kogyo Kabushiki Co., __ U.S. __, 62 USPQ2d 1705 (2002)} the doctrine of equivalents likely does not capture subject matter that the patent drafter reasonably could have foreseen during the application process and could have been included in the claims.

For example, if an application originally claimed a container with a slot and then, to avoid prior art, the claim was modified to “a slot at the top of the container,” the doctrine of equivalents would not reach a container with its slot on the side near the top, even though it performed the equivalent function. {FN55: Sage Products v. Devon Industries, 126 F.3d 1420, 44 USPQ2d 1103 (Fed. Cir. 1997)} That is because it was foreseeable that the amended claim limitation did not include slots in positions other than the top of the container.

However, if an application filed before the invention of the transistor had its claims amended to include the terms used to describe parts of vacuum tubes (such as “cathode,” “grid,” and “plate’), then a circuit that performs the same function in the same way to get the same result but is implemented using transistors might be covered by the doctrine of equivalents, since it would have been impossible at the time the claims were written or amended to use the corresponding terms that describe the parts of a transistor. The applicant could not have foreseen a limitation as to after-invented technology, was not disclaiming that technology, and should not be held to such a disclaimer under prosecution history estoppel.

VIII.B. Patent Misuse

Subsection (d) indicates that a number of acts that might otherwise be an antitrust violation are not when a patent is involved:

No patent owner otherwise entitled to relief for infringement or contributory infringement of a patent shall be denied relief or deemed guilty of misuse or illegal extension of the patent right by reason of his having done one or more of the following: (1) derived revenue from acts which if performed by another without his consent would constitute contributory infringement of the patent; (2) licensed or authorized another to perform acts which if performed without his consent would constitute contributory infringement of the patent; (3) sought to enforce his patent rights against infringement or contributory infringement; (4) refused to license or use any rights to the patent; or (5) conditioned the license of any rights to the patent or the sale of the patented product on the acquisition of a license to rights in another patent or purchase of a separate product, unless, in view of the circumstances, the patent owner has market power in the relevant market for the patent or patented product on which the license or sale is conditioned. {FN56: 35 U.S.C. §271(d)}

But that is not to say that a patent owner can do anything he wants without concern for violating the antitrust law. Use of the rights under the patent to extend it to cover things not within the scope of a patent, such as licensing a patent only if you will buy the raw materials needed to practice the invention, can be an antitrust violation and make the patent unenforceable until the antitrust violation ends.

VIII.C. Marking

Even though patents are publicly available, it is not reasonable for a person to know what is covered by every patent. Section 287(a) provides that an infringer will not be liable for damages unless he has received notification of the patent. But that notice can come with the filing of an infringement suit, so that it will cover future infringements only, by a letter informing you of the patent, or by seeing a product covered by the patent marked as patented.

Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word ''patent'' or the abbreviation ''pat.'', together with the number of the patent, or when, from the character of the article, this can not be done, by fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice. In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice. {FN57: 35 U.S.C. §287(a)}

VIII.C.1. “Patent Pending”

Often you see a product marked “patent pending” instead of being marked with a patent number. This means that a patent application has been filed and is being examined by the Patent Office, but no patent has issued. The patent pending marking is simply a warning that a patent may issue that covers some aspect of the product, and that at that time people who are making unauthorized copies of the product can be forced to stop. Because patent applications used to be kept secret by the Patent Office, and still may be if the applicant requests and has not filed a foreign patent application, it was impossible to know what the pending application claimed, and so a patent pending mark would create sufficient uncertainty to discourage the investment in producing unauthorized copies of the product.

The Patent Act provides penalties for falsely marking a product as patented or as having a patent pending. Section 292 covers false marking:

(a) Whoever, without the consent of the patentee, marks upon, or affixes to, or uses in advertising in connection with anything made, used, offered for sale, or sold by such person within the United States, or imported by the person into the United States, the name or any imitation of the name of the patentee, the patent number, or the words ''patent,'' ''patentee,'' or the like, with the intent of counterfeiting or imitating the mark of the patentee, or of deceiving the public and inducing them to believe that the thing was made, offered for sale, sold, or imported into the United States by or with the consent of the patentee; or

Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article, the word ''patent'' or any word or number importing that the same is patented for the purpose of deceiving the public; or

Whoever marks upon, or affixes to, or uses in advertising in connection with any article, the words ''patent applied for,'' ''patent pending,'' or any word importing that an application for patent has been made, when no application for patent has been made, or if made, is not pending, for the purpose of deceiving the public –

Shall be fined not more than $500 for every such offense. {FN58: 35 U.S.C. §292}

Any person, not just the patent owner, can sue for false marking, in which case half the penalty goes to the person suing and half goes to the federal government.

VIII.D. Penalties for Infringement

VIII.D.1. Damages Recoverable

As with copyright infringement, there are a variety of penalties for infringing a patent. The recoverable damages are described in Section 284:

Upon finding for the claimant the court shall award the claimant 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, together with interest and costs as fixed by the court. 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. The court may receive expert testimony as an aid to the determination of damages or of what royalty would be reasonable under the circumstances. {FN59: 35 U.S.C. §284}

The reason for the treble damages is to prevent people from infringing when they don’t want to pay royalties and then when they are found to have infringed, having to pay only the royalties that they were avoiding. Damages are generally tripled when the infringement is found to be willful – the infringer was aware of the patent but infringed it anyway. Note that there is no equivalent to the Copyright Act’s statutory damages in the Patent Act.

A troubling aspect of the tripling of damages for willful infringement is that it seems to punish a person who tries to be aware of the patents that are being issued and reward those who ignore patents until they receive actual notice that they may be infringing a particular patent. But it is hard to see a court punishing an infringer for making a good-faith effort to avoid infringing patents, including studying patents as they are issued, when there would be no punishment if they had made no effort at all.

Other penalties for infringing a patent include injunctions to stop future infringement {FN60: 35 U.S.C. §283} and attorney fees in exceptional cases. {FN61: 35 U.S.C. §285} Note that unlike willful copyright infringement, patent infringement carries no criminal penalties.

VIII.D.2. Provisional Rights

There can be no infringement until a patent is issued, which often takes two years or more after an application is filed. But a recent change in the Patent Act, as part of the early publication of patent applications, allows a patent owner to collect a royalty for acts that would infringe the patent when it has issued. These “provisional rights” are detailed in Section 154(d), {FN62: 35 U.S.C. §154(d)} and are available between the time of the early publication of the patent application, as provided for in Section 122(b), {FN63: 35 U.S.C. §122(b)} and the issuance of the patent.

In order to collect those royalties, the person who is violating the provisional right must have actual notice of the published patent application. That generally means that the patent applicant must send a copy of the published patent application to the person violating the provisional right, to simplify proving that the violator has actual notice.

The early-publication provision calls for the publication after 18 months of any application, unless an applicant requests that the application not be published and that application is not filed in a foreign county. But it also allows for publication earlier than 18 months at the request of the applicant. This can be useful when there is no concern about the early disclosure of a patent application, such as when the invention is being sold, marked as patent pending, and it is reasonably clear what such a patent might claim. In that case, an applicant should request publication as soon as the patent application is filed, so that provisional rights will be immediately available.

But even though the provisional rights begin at the time the application is published, they are not available to an applicant until the patent based on the application is issued. If, for some reason, no patent issues from the application, then there will be no provisional rights even though the application has been published.

Because claims are often amended during the examination of a patent application, provisional rights are available only when a published claim is substantially identical to a claim in the issued patent. If a claim is substantially changed, it will be necessary to have the application republished and new notice provided to a person thought to be violating the provisional rights.

IX. What To Do If You Are Told You Are Infringing a Patent

IX.A. Reviewing the Claims

The first thing you should do when you are notified that you may be infringing a patent, or suspect that that might be the case, is to review the claims of the patent in light of its prosecution history (which may give particular meaning to claim terms or otherwise limit the claims) to see if all the elements in the claims are components of the alleged infringing product. A patent attorney should be consulted to interpret the claims and, if infringement is not found, to provide a written opinion of why each claim of the patent is not infringed. (That will make it difficult to show willful infringement if you continue making or selling the product and a court later determines that your interpretation of the claims is incorrect.)

IX.B. Three Choices

If a claim of the patent does read on your product, you have three choices (besides ceasing to make and sell your product). You can try to negotiate a license with the patent owner, possibly cross-licensing a patent that you own that may be useful to the patent owner. (Many companies get patents not for stopping their competitors but as bargaining chips in negotiating cross-license agreements.) You can read the claims carefully to determine if there is some change you can make to your product such that the claims no longer read on your product because one element is missing or different in your product. (This is called “inventing around” the patent, and while it sounds like a sneaky thing to do, it is actually encouraged by the patent laws because it results in new ways of doing things. But you have to worry about continued infringement under the doctrine of equivalents if your change is minor.)

Finally, you can try to invalidate the patent. This is difficult because the presumption of validity of a patent means that your evidence must meet a high standard. For example, you can’t just say that the disclosure isn’t enabling because deference is given to the examiner’s determination that it is enabling, as indicated by the lack of a rejection for that reason. The examiner’s decision that the claimed invention is not anticipated or made obvious in light of the prior art considered (and listed on the first page of the patent) is also given high deference. But prior art not known to the examiner cannot receive the same deference because it clearly did not form a part of the examiner’s decision to grant the patent. So trying to invalidate a patent generally results in a search for prior art not considered by the examiner and clearly different from the prior art that was considered.

IX.C. Reexamination

Any prior art discovered in such a search can be used as a defense in an infringement suit against you, as the basis for filing a declaratory judgment action to find the patent invalid if you have received a letter from the patent owner sufficiently threatening of an infringement suit, or to have the Patent Office reexamine the patent in light of the newly-discovered prior art. To have the Patent Office order a reexamination, you have to raise a new issue of patentability, which generally means that you have found new prior art and are not just saying that the examiner misapplied the prior art that he considered.

Until a recent change in the patent statute, most people avoided reexamination since they could play no role in it beyond their original request, and in particular could not point out misconceptions on the part of the reexamination examiner. The give-and-take of the reexamination was entirely between the patent owner and the examiner. And any prior art supplied as part of the reexamination request became essentially useless in later patent litigation, since the presumption of validity now applies to that prior art as well as the prior art considered during the original patent examination.

The patent statute was changed in 1999 to permit the reexamination requestor to participate in the reexamination by providing written commentary on the actions of the examiner and the responses of the patent owner. Further changes were made in 2002 to give the requestor the same appeals rights as the patent owner. Previously, while either party could appeal the examiner’s decision to the Board of Patent Appeals and Interferences, only patent owner could further appeal the decision of the Board to the Court of Appeals for the Federal Circuit.

The reexamination provision prevents you from using anything that you could have brought up at the time of the reexamination in later litigation. Because of uncertainty about the scope of this bar, reexamination may be undesirable unless you have prior art that you are sure will invalidate the patent, or at least cause new claims that will not concern you.

Another change allowed the reexamination to be based on prior art already considered by the examiner, as long as a “substantial new question of patentability” is shown. But Congress made it clear that this is not a way to second-guess the examiner.

However, this bill is not a license to abuse patentees and waste the life of a patent. The point must be stressed that the past requirement of ‘a substantial new question of patentability’ has not been diminished. The issue raised must be more that just questioning the judgment of the examiner. There should be substantial evidence that the examiner did not properly understand the reference, or did not consider a portion of the reference in making his decision. That substantial new question must be put forward clearly in the request for reexamination. The bill preserves the necessary safeguard in the Patent Act against harassment of patentees with the safety-valve of a ‘substantial new question of patentability' standard, not merely `any sort of question.’ The agency has discretion in this determination to permit reexamination, but it is not absolute. While the bill clarifies the basis for a reexamination determination and removes the overly-strict bar established by the court, which renders the available process useless in many obvious instances such as with previously considered prior art, the courts should judiciously interpret the ‘substantial new question’ standard to prevent cases of abusive tactics and harassment of patentees through reexamination. {FN64: H.R. Rep. No. 107-120 at 3}

Though each revision to reexamination makes an important improvement, there are still problems that keep people from taking advantage of reexamination as an alternative to litigation. Perhaps Congress will see this as reason to institute a simplified early reexamination, such as an opposition period for a short time after the issuance of a patent to weed out patents where the best prior art was unavailable to the examiner.