Patent Litigation

• Author: David R. Gerk - John M. Fleming
• Pages: 141-173

P A R T 3

Patent Litigation

141

I have been so constantly under the necessity of watching the move-

ments of the most unprincipled set of pirates I have ever known,

that all my time has been occupied in defense, in putting evidence

into something like legal shape that I am the inventor of the Electro-

Magnetic Telegraph.

—Samuel F. B. Morse

(inventor of the telegraph and Morse code)

Samuel F. B. Morse, His Letters and Journals (1914), vol. 2, 283

(Extract from a letter to his brother describing the challenge of

defending his patents on the telegraph, April 19, 1848)

Patent litigation does not just happen. Prior to any courtroom, any depo-

sition, any review of documents, or even any complaint, the process for

determining whether to litigate a patent begins with issuance of the patent,

or maybe even before. A practitioner involved in the process of litigating

a patent should appreciate several things before determining that legal

action in a U.S. District Court is the best course of action.

Part 3

142 Section 2, Part 3

I. REQUIREMENTS FOR AN OWNER OF PATENT IN

SEEKING AN INFRINGEMENT ACTION

A patent infringement action in a U.S. District Court is a very costly

endeavor. Litigating a patent can cost in excess of $3 million and take at

least two years. Also, the appeal process can cost as much as another $2

million and take at least another year of time. Prior to counseling a client

on whether to proceed or not, a practitioner should assist a client in

understanding the time and resource commitments that a patent litiga-

tion, whether offensive or defensive, will require. Given the significant

average costof litigation, the estimated costs need to be addressed imme-

diately. If the best case scenario is a judgment of less than $1 million,

then litigation may not be in the best interest of a client, or at least a

client should be aware that the litigation itself likely will cost more than

any payment received in a judgment.

Proper prosecution of the patent during examination before the U.S.

Patent & Trademark Office (USPTO) is critical to later litigation. It

dictates whether a patent is worth litigating, how well it will hold up to

attacks during litigation, and even whether it can be litigated. Funda-

mental issues during prosecution of a patent, whether substantive or pro-

cedural, can be used to invalidate the patent before an owner can even

attempt to assert an action against another party.

In addressing the validity and strength of the issued patent, certain

details associated with the patent need to be considered. In the U.S.,

ownership of a patent is defined initially by the determination of

inventorship, i.e., the determination of that individual or those individu-

als who conceived of and reduced to practice the invention. A patentee

cannot hope that identification of inventorship during the original pros-

ecution of the patent before the USPTO was proper. An effort should be

made to reevaluate the determination of inventors to ensure that proper

inventorship is in place. Improper inventorship of an issued U.S. patent

can be corrected if the error was without deceptive intent. As such, a

practitioner should address the determination of inventorship immedi-

ately and certainly before embarking on a litigation.

Another determination to be made before bringing a litigation action

is ownership. Just because the face of a U.S. patent indicates that a par-

ticular entity is the assignee does not mean that the ownership claim by

that assignee is proper. Public records should be reviewed to ensure that

the chain of title of ownership is proper. In situations in which the as-

signee is a company, the chain of title must start with a transfer of rights

143

Patent Litigation

from the inventor(s). In the U.S., the inventor(s) of a patent are the

owners of the patent unless an assignment of rights in the patent has been

made by the inventor(s). In addition, it is incumbent on patentees to

confirm that no other assignment records exist by any individual or en-

tity in the chain of ownership that deviates from the public record. Con-

firmation that the inventors did not assign rights prior to any publicly

recorded assignment is essential. A practitioner may face sanctions in

filing an infringement action against another entity if it can be shown

that the alleged owner is not in fact a proper owner to bring the legal

action. In addition to the determination of inventorship, a practitioner

should look into retaining the inventors as a consultant or witness. Other-

wise, a patentee may be left in a difficult position in bringing a litigation

action against a defendant that then retains one or more of the inventors.

Still another important factor regarding the validity of a patent that

needs to be considered and/or rectified prior to bringing a legal action of

infringement against a defendant is the confirmation of payment of the

maintenance fees. Maintenance fees for a U.S. utility patent must be paid

at certain intervals following issuance of the patent. Failure to timely pay

maintenance fees results in automatic abandonment of the patent. Yet

again, a practitioner may face sanctions before a court in the event that

an infringement action on a patent is brought when the patent is, in fact,

no longer enforceable due to abandonment. Maintenance fees must be

paid every four years, eight years, and twelve years following issuance

of the patent.1 If the patent is abandoned for failure to pay the mainte-

nance fees, revival of the patent may be sought in order to still bring a

legal action against another party so long as the proper paperwork is filed

and the abandonment is shown to have been unavoidable or uninten-

tional.

Although not required, a study of the validity of the patent may be

made before bringing an action, particularly if the state of the art was

unknown to the applicant during prosecution or there is reason to think

the most pertinent art may not have been identified and considered by the

examiner.2 A practitioner may search various databases for prior art that

is not of record, i.e., was not presented before the USPTO during exami-

1. One year windows for payment of maintenance fees open at 3.5, 7.5

and 11.5 years respectively.

2. Confidence in the strength of a patent can be greatly increased if the

state of the relevant art is known by the applicant, inventors or practitioner or

if a patentability or clearance search is performed prior to filing a patent ap-

plication. As such, time and money spent during the prosecution process to