Application of the Patent Misuse Doctrine

Patent misuse is an affirmative defense to an action for patent
infringement or for royalties under a license. The burden of establishing
misuse lies with the alleged infringer or defaulting licensee. If misuse is
found, the patent is rendered unenforceable until the misuse is “purged.”
A finding of misuse precludes prospective injunctive relief and eliminates
any damage award (either lost profits or reasonable royalties) for the
period during which the misuse occurred. A party asserting the defense
need not have been affected by the conduct constituting misuse in order
to assert the defense. Essentially, the patent becomes unenforceable
against the world until and unless the misuse is deemed to have been
purged. By disavowing the contract provision constituting the misuse and
taking other steps, the patentee may reinstate the enforceability of its
This chapter is designed to give practitioners a practical guide to
applying the misuse doctrine to particular conduct. It summarizes the
elements of misuse, the relevant antitrust law principles for applying the
anticompetitive effects requirement, and practical issues such as standing
and remedies.
A. Elements of Patent Misuse
There are two elements to patent misuse: (1) a “leveraging” or “use”
of the patent in suit to impermissibly broaden the physical or temporal
scope of the patent; and (2) an anticompetitive effect resulting from the
conduct.1 The anticompetitive effect prong includes, but is not limited to,
conduct that would constitute an antitrust violation. Under Federal Circuit
precedents, certain conduct is deemed to meet the second element without
proof of actual anticompetitive effects.2 The burden of establishing
misuse lies with the alleged infringer or defaulting licensee,3 but applying
1. Princo Corp. v. ITC, 616 F.3d 1318, 1328 (Fed. Cir. 2010) (en banc).
2. Virginia Panel Corp . v. MAC Panel Co., 133 F.3 d 860, 869 (Fed. Cir.
3. Princo, 616 F.3d at 1338.
38 Intellectual Property Misuse
the anticompetitive effects element may require the patent holder to offer
legitimate, procompetitive justifications for its conduct.4
1. The Leveraging Requirement
The patent misuse doctrine is meant to prevent intellectual property
holders from using the valid, government-sanctioned exclusivity right of
a patent “to derive a benefit not attributable to use of the patent’s
teachings.”5 The Federal Circuit has explained that patent misuse consists
of a patent holder “leverag[ing] its patent to “impose overbroad
conditions on the use of the patent in suit that are ‘not within the reach of
the monopoly granted by the Government.’”6 The court must also
“determine if [the challenged] practice is reasonably within the patent
grant, i.e., that it relates to subject matter within the scope of the patent
claims.If so, the practice does not have the effect of broadening the scope
of the patent claims and thus cannot constitute patent misuse.”7
“Leveraging” the patent means conditioning access to the patent on a
demand outside the patent grant, typically but not always through a patent
license.8 Such demands are “overbroad”i.e., outside the patent grant—
4. Id. See also Arkansas Carpenters Health & Welfare Fund v. Bayer AG,
604 F.3d 98, 104 (2d Cir. 2010), as corrected (June 17, 2010) (“Rule of
reason analysis proceeds in three steps. First, the plaintiff bears the initial
burden of showing that the defendant’s conduct had an actual adverse
effect on competition as a whole in the relevant market.’ If plaintiff
satisfies this burden, the burden then shifts to defendant to offer evidence
that its conduct had pro-competitive effects. If defendant is able to offer
such proof, the burden shifts back to plainti ff, who must prove that a ny
legitimate competitive effects could have been achieved through less
restrictive alternatives.” (internal citations omitted)).
5. Zenith Radio Corp. v. Hazeltine Research, 395 U.S. 100, 136 (1969).
6. Princo, 616 F.3d at 1331 (quoting Zenith, 395 U.S. at 136-138).
7. Virginia Panel, 133 F.3d at 869 (internal citations omitted) (sending
notices of suspected infringement and intention to sue were acts
reasonably within the scope of the patent grant); Mallinckrodt, Inc. v.
Medipart, Inc., 976 F.2d 700, 708 (Fed. Cir. 1992) (if patentee’s conduct
“relates to subject matter within the scope of the patent claims, that ends
the inquiry”); Monsanto Co. v. McFarling, 363 F.3d 1336, 1341 (Fed. Cir.
2004) (“In the cases in which the restriction is reasonably within the patent
grant, the patent misuse defense can never succeed.”).
8. Princo, 616 F.3d at 1331; Altana Pharma AG v. Teva Pharm. USA, Inc.,
2013 WL 12158369 at *5 (D.N.J. 2013) (no misuse where plaintiff did not

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