For years, the U.S. has talked about substantially overhauling U.S. patent law so that it conforms with how most of the rest of the world approaches patent rights. Now, it might become a reality. Yesterday, the Senate overwhelmingly passed patent reform legislation, which if signed, will have the greatest effect on patent law in the last fifty years. See Patently-O’s recent post for a good overview of the legislation. It has been reported that the President is likely to sign the Smith-Leahy America Invents Act into law in the next few days. The most significant change will be to move from a first-to-invent country toward a first-to-file country. This change will greatly affect U.S. practitioners’ patent procurement and litigation strategies. See http://www.patentlyo.com/patentreformbillaspassed.pdf for the language of the Act.
We’ve all heard the phrase, “You can’t judge a book by its cover.” Well, this adage is especially true when looking at an issued patent as there may be valuable information that is not reflected on its face. First, printing errors can occur. Late amendments to the claims of the patent (which define the scope of the protected invention) may not make it into the final version of the patent. Thus, the claims that you are looking at may appear broader than they actually are. This is especially important to know when evaluating potential non-infringement positions. Second, the applicant may have given up significant ground to get its patent granted, which is not necessarily reflected in the patent. For example, the applicant may have distinguished its invention over a prior art system. This could have been done by making claim amendments and arguing their narrow meaning, or by otherwise convincing the U.S. Patent and Trademark Office Examiner that no amendments were necessary because the claims (as written) were sufficiently narrow to get around the prior art. Why is this relevant you ask? Because your company may be practicing a technology that is similar to what the applicant distinguished. In the end, while you should start with the patent, you should read the back and forth correspondence with the U.S. Patent and Trademark Office (known as the “patent prosecution history”) as mistakes can happen and the scope of the patent may not always be as it appears on its face.
This is a common question. Just because your company owns a patent doesn’t necessarily mean that you can practice what is covered by the patent. Sound crazy? It’s true. A patent is a negative right. Generally speaking, a patent gives the owner the right to preclude others from making, using, selling, offering for sale and/or importing what is protected by the patent during the term of the patent. However, a patent does not guarantee that the patent owner can make what is covered by the patent without infringing someone else’s rights. A simple example illustrates this point. Company A invents the first inflatable bicycle tire. Company B comes up with the idea of adding a valve stem to the tire so that the tire is more easily inflated and Company B is awarded a patent on a bicycle tire with a valve stem as it is a new, useful and non-obvious improvement to Company A’s patented tire. Then, Company B makes its first tire with a valve stem and receives a cease and desist letter from Company A alleging infringement of Company A’s broader (or more dominant) patent for just the tire. Company B has a problem as it has manufactured Company A’s patented tire. It doesn’t matter that it added anything to it (i.e., the valve stem) as Company A’s patent broadly covers any inflatable bicycle tire. Company B is not left without some leverage however. Should Company A desire to make a tire with a valve stem (because it is a much more compelling product for consumers), it could not do so without Company B’s permission. In the end, the companies would probably cross-license the use of their respective patents. How could this scenario possibly have been avoided? While many of the more dominant patents would have been uncovered during the patent application process for Company B’s patent, it is advisable to have a “prior art” search of existing patents conducted, especially if your company is thinking about actually manufacturing the product. The breadth of any existing patents can be assessed so that you can ensure that your company is not walking into a landmine. Another option is to commission a “freedom to operate” opinion by a patent attorney. In this context, the patent attorney will scour a sea of patents that are possibly relevant to your idea and will give you an assessment of how crowded the space is before you move forward with manufacturing your invention. This type of a search differs from a “prior art” search in that it is much broader in scope and will entail looking for any patents that might address any aspect of your invention vs. just looking for patents that are essentially for the same invention (e.g., looking for any patents that are for just a valve stem used in any context vs. conducting a prior art search to find patents on a tire with a valve stem). In the end, you just need to remember that a patent does not grant you the right to practice the patented invention. It allows you to prevent others from doing so. If you plan on practicing your invention, you should strongly consider hiring someone to conduct a review of the existing prior art (e.g., patents) so that you don’t run into later problems.
Yesterday, the Federal Circuit clarified the standard for proving inequitable conduct in patent infringement cases in its Therasense, Inc. decision. Similar to how it addressed the burden of proof for fraud on the USPTO in the trademark context, the Court adopted a heightened standard for proving inequitable conduct. Here are several points to consider:
- it was a split decision so the Supreme Court may ultimately decide the issue;
- the Court noted that inequitable conduct allegations are a “common litigation tactic” and as such, adopted a more stringent approach in an apparent attempt to discourage this practice;
- the Court clarified the two requisite elements for proving inequitable conduct: materiality and intent;
- with regard to materiality, the Court rejected the USPTO’s broader view of materiality under its Rules as well as the previously used sliding scale approach in favor of a “but for” test– the USPTO would not have allowed a claim of the patent-at-issue had it been aware of the undisclosed prior art;
- the Court provided a carve out to the “but for” rule for “affirmative egregious misconduct” (which should be a ripe area for future litigation);
- with regard to intent, it must be shown that “the applicant knew of the reference, knew that it was material, and made a deliberate decision to withhold it[;]”
- it is not enough to show that the applicant “should have known” about the materiality of the reference;
- inferring intent will become difficult as “the evidence ‘must be sufficient to require a finding of deceitful intent in light of all the circumstances'” and when there are multiple reasonable inferences, intent cannot be found; and
- absence of a good faith explanation for withholding a material reference will not, in and of itself, be sufficient to prove an intent to deceive.