Patent Enforcement Pre-Litigation Considerations
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1 Patent Enforcement Pre-Litigation Considerations The Intellectual Property Society April 10, 2005 Patrick Reilly 1
2 I. Pre-Litigation Check-List 2
3 Purposes of a Pre-Litigation Check-List Validity Can the patents Can the patents-at-issue withstand attack? Infringement Are the claims broad enough to cover the accused products? Remedies Will the client achieve its objectives by bringing suit? 3
4 Validity Analyze the Patents-at at-issue and Their Prosecution Histories Look for subject matter abandoned during prosecution Make sure continuation applications properly claim priority and have adequate disclosure in the parent Verify that all USPTO maintenance fees have been paid Determine the status of related applications filed in foreign countries 4
5 Make Sure There Are No Inventorship Issues Interview inventors and review their files Ensure they disclosed all prior art of which they were aware at the time to USPTO Obtain records of assignment to confirm standing to sue 5
6 Be Familiar With Relevant Prior Art Review prior art cited during prosecution and the arguments patentee made in response Conduct a search of prior art not cited during prosecution Consider utilizing the USPTO s s reexamination process to have the patent blessed over any newly discovered prior art 6
7 Search For Invalidating Public Disclosure of the Invention Examples of where to look: Government and SEC filings related to the technology Publications from standards bodies Marketing materials Antitrust filings Web postings from patentee s s company Published results from beta testing or trials Recordings of speeches given at trade or technical conferences 7
8 Infringement Analyze the Infringing Products and Start to Build a Case for Infringement Become familiar with the patented products, the market, industry, and the competition Clarify the line between infringing and non- infringing products Obtain all testing and analysis of the infringing product and conduct additional testing, if necessary Consider obtaining an infringement opinion to avoid exposure to attorney s s fees 8
9 Remedies Investigate Potential Damages Determine timing of events Research infringer s s business and products Obtain records of infringer s s sales Gather any documents regarding market impact of infringing sales 9
10 Analyze Any Applicable Licenses Licenses granted under the patents-at at-issue may be relevant to: 1. Resolve which parties have standing to sue 2. Determine whether the opposing party has some rights granted by the agreements 3. Provide evidence of a reasonable royalty rate for the infringing product 10
11 Be sure the enforcement strategy and available remedies coincide with the client s s business strategy 11
12 Other Considerations Avoid the Discovery Surprise Find it Sooner Than Later Obtain all files relating to the prosecution of the patents Collect any written analyses or opinions Interview employees to unearth damaging material Gather all documents relating to any pre-existing existing relationship between the client and the infringer, and any correspondence between them 12
13 Investigate Any Relevant Prior Litigation Can include: The patents-at at-issue Related patents The infringing product Examples of what to look for: Issues that have been decided and that cannot be re- litigated Both harmful and helpful testimony of witnesses who may be called to testify 13
14 Weigh All Considerations in Selecting the Forum Determine all venues in which suit can be brought Research the speed of the available jurisdictions and choose an expected pace that coincides with the overall strategy Explore the court s s familiarity with patent law, and any special procedures it has for patent cases Be sure that key, non-party witnesses are within the court s s subpoena power for trial 14
15 Consult with and involve competent patent counsel 15
16 II. Sending Notice of Infringement 16
17 Purposes of Notice Start the damages clock for product patents ( Actual notice requirement) Begin dialogue over potential licensing/product change or phase-out Create evidence of knowledge of patent for willful infringement claim 17
18 Actual Notice of Infringement Required for accumulation of damages for sale of patented article May be actual or constructive patent marking Distinction: : Process claims Purposes: Notify alleged infringer of potential liability Provide information to contact patent holder 18
19 Actual Notice of Infringement (cont. cont.) Requirements: 1. Letter from owner or counsel 2. Identifies patent and patent owner 3. Identifies activities believed to infringe 4. Proposal for abatement (license/other) 19
20 Case or Actual Controversy / Avoiding the Declaratory Judgment Action 20
21 Two-Prong Test for Declaratory Judgment Standing 1.) an explicit threat or other action by the patentee, which creates a reasonable apprehension on the part of the declaratory judgment plaintiff that it will face an infringement suit; and 21
22 Two-Prong Test for Declaratory Judgment Standing (Cont.) 2.) present activity which could constitute infringement or concrete steps taken with the intent to conduct such activity. Gen-Probe, Inc. v. Vysis,, Inc., 359 F.3d 1376, 1380 (Fed. Cir. 2004) 22
23 Reasons to Avoid Creating Declaratory Judgment Standing: Inconvenient forum Willingness to license on reasonable terms/negotiate business solution Timing issues Litigation Litigation avoidance 23
24 Actual controversy test: Fact-specific/totality of circumstances Other actions can lead to reasonable apprehension : Statements to customers regarding infringer s s status/intention to enforce rights; Past litigation between parties; Warnings to trade groups/public regarding intent to enforce patent rights; Threatening statements by licensee during license negotiations. 24
25 Notice letter elements potentially triggering reasonable apprehension of litigation: Sending letter from outside patent counsel rather than in-house counsel or business executive; Making express threats of litigation; Threatening litigation unless license or stop selling product; Using terms cease and desist or legal action in circumstances evincing intent to sue; Providing deadline for response to letter. 25
26 Factors militating against reasonable apprehension : Licensing negotiations (no controversy unless breakdown); Existing license; Delay in filing suit; Patent holder promises not to sue; Assertion that product may infringe with mere offer of license negotiations. 26
27 Balance actual notice and actual controversy requirements SRI Int'l, Inc. v. Advanced Tech. Labs., Inc., 127 F.3d 1462 (Fed. Cir. 1997) 27
28 SRI would be pleased to provide [ATL] with a nonexclusive license under the patent. For your information, counterpart applications are on file in a number of countries outside the United States. If you are of the opinion that you do not need a license from SRI, it would be helpful if you could give us some insight into your reasons. (Emphasis added.) SRI Int'l, Inc. v. Advanced Tech. Labs., Inc., 127 F.3d 1462 (Fed. Cir. 1997) 28
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