Watson IP Group

Watson IP Group

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How Are Patents Enforced and How to Prevent Infringement of Intellectual Property?

In a most general sense, a patent is enforced through the Federal Courts of the United States. A complaint can be filed in a Federal District Court to enforce a patent against a defendant. There are many rules as to where and how such filings are made, and they may be made by patent owners and/or licensees.

Under the law, a State Court cannot hear a case on patent infringement; only a Federal Court can hear such a case. And, there are rules as to where such cases can be brought. Under the statutes, patent cases are treated as extremely particular matters. As such, cases must either be brought in a court where (a) the defendant would reside, or (b) (1) where the defendant has committed acts of infringement; and (2) where the defendant has an established place of business. Thus, for many alleged infringers, there may only be one or two locations where an action for patent infringement can be brought. Large multi-national businesses have more exposure to being sued in more and different Federal Court locations. In addition, foreign businesses are exposed to being sued for patent infringement in more and different Federal Court locations.

Additionally, the Federal District Court is not the only place to bring a suit. In certain instances of importation of infringing goods, an action can be brought before the US International Trade Commission (ITC). The ITC in recent years has gained in popularity, as it tends to be quicker to resolution and can often lead to a broader settlement as to infringing activities. However, as a downside, resolution in the ITC is more limited as to remedies.

Through the District Courts, a patent owner can seek any number of different remedies. For example, an injunction (preliminary, temporary restraining order or permanent) may be sought to keep the infringer from continuing infringing activities. Each one of these has different factors and different proofs that are required. In some instances injunctive relief may not be possible in any form, and, the parties may be forced into a license arrangement.

Other remedies may include the destruction of infringing articles or products. Such destruction can be supervised, monitored and certified by a third party, to insure that the destruction has taken place.

Additionally, a patent owner may seek damages in the form of a royalty, lost profits, total profits in the case of Design patents. These actual compensatory damages can be increased as much as three times for willful infringement and the Court may impose attorney fees in exceptional cases.

Patent litigation in the Federal Courts can be time consuming and very costly. Depending on the court, an action for patent infringement, including appeals can drag on for the better part of five to ten years. And, there are many steps to the litigation process, each one of which involves a large amount of time in which to prepare and produce documents and filings. Due to this large expense and time, the landscape has changed as to how to finance this type of litigation. For many years, there have been contingency fee arrangements between intellectual property law firms and clients. More recently, a number of firms have started to provide litigation financing, or financing through crowdsourcing or crowdfunding.

Additionally, alternative forums have started to appear to resolve patent disputes, such as Amazon’s “Utility Patent Neutral Evaluation” which can quickly address some instances of patent infringement. While the procedure is quite new, it seems that it may be an effective manner in which to resolve some patent disputes both cost effectively and in a timely manner. It has a limited scope (i.e., generally limited to sale of products on Amazon). However, with the volume of such sales at Amazon being quite large, and at times, the only outlet for sale of some products, the limited scope is sufficient for many patent owners. Such a procedure is substantially less expensive than litigation in the Federal Courts.

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