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Patent holders can bring civil actions in federal court both in equity (injunctions) and at law (money damages). Often a holder will do both; seek an injunction to prevent future harm and money damages for past wrongs. In order to prove infringement the holder will have to prove that the defendant's making, using or selling of a process, machine, manufacture, or composition of matter "steps on" one or more of the patent holder's claims as described in the patent in question (see Infringement). The defendant will likely respond (i.e. assuming no settlement and plausible arguments) with one or more affirmative defenses (see Defenses). Injunctions Section 283 explicitly provides for equitable relief as follows:
In general, in order for the patent holder plaintiff to get a permanent injunction they will need to show: (1) that there is no adequate remedy at law or that they will suffer irreparable harm unless the injunction is granted; (2) that the "balancing of the equities" favors them; and (3) that granting the injunction is in the public interest. A preliminary injunction may also be available to the patent holder but here the burden is greater. In addition to a showing with respect to the factors above the patent holder will need to show that there is a strong likelihood that they will prevail on the merits. In a fairly recent case, eBay v. MercExchange (USSC 2006), the Court may have signaled that it is less inclined to grant injunctions in certain situations. In eBay, a jury found that MercExchange had a valid patent and that eBay and Half.com had infringed upon it. Nonetheless the district court refused to grant a permanent injunction (which may have shut down eBay), but the appeals court reversed citing that general rule that “courts will issue a permanent injunction against patent infringement barring exceptional circumstances.” The USSC reversed indicating that both lower courts had gotten it wrong. The district court because its reasoning would deny injunctions too broadly and the appeals court because it did not apply the "four" (the Court apparently split factor 1 into two factors (1)(a) no remedy at law; or (1)(b) irreparable harm) factor analysis as described above. The Court apparently felt that there was a remedy at law going forward. Justice Kennedy gets to the heart of the matter in his concurrence:
What is to be made of the eBay decision? It is too early to tell. But it does reinforce the view that American jurisprudence is first and foremost concerned with practical outcomes. The Court stepped in to prevent the "tail from wagging the dog" while leaving the door open for a decision that goes the other way under a different set of facts. Money Damages The statute provides for damages in section 284 as follows:
Notice that a court has discretion to grant treble damages. Treble damages are available when a court finds intentional wrongdoing on the part of the defendant. It may also grant, in exceptional cases, attorney fees to the prevailing party. The statute of limitations for a patent infringement claim is six years. There are also special damages available for the infringement of a design patent as follows:
This section imposes a severe penalty for infringement of a design patent in that there are no qualifications on the profit. The infringer will be disgorged of the "total profit" and not just the profit directly attributed to the patent infringed upon. Comments: Many patent disputes, especially in the software space, are not settled via litigation but rather are resolved via licensing and cross licensing agreements. While this may appear to be "progress" (depending on your point of view) it tends to favor businesses that have large patent portfolios and therefore leverage during the negotiations process. Often licensing is a convenient insurance policy against litigation risk and may be a viable option for high growth online businesses that have some exposure. |
| As Internet Lawyers we offer patent advice but not patent prosecution. |
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