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Patents: Defenses

There are a number of more or less "standard" defenses that are asserted by an accused infringer as an attempt to avoid liability. The starting point is to argue that the patent in question is not valid because it does meet the requirements of patentability and therefore should have never been issued. Here the defendant will argue one or more of the following:

  • The patent in question is not new; or
  • The patent is obvious; or
  • The patent is not useful (rarely).

The defendant may also argue that the patent has not been sufficiently disclosed, or that the best mode was not provided, or that it has been abandoned. In short, a defendant will attack the patent in any and every way possible, given the specific facts in play.

In addition to a "frontal" attack, there are some specialty defenses that might be asserted under a more narrow set of factual constraints as discussed below.

Experimental Use Defense

There is a limited exception if the reconstruction of the invention was merely for the purpose of scientific inquiry (and not for profit). The doctrine apparently has its origin in yet another famous opinion by Justice Story (see Whittemore v. Cutter (C.C.D. Mass. 1813)). Here Justice Story had the following to say: "it could never have been the intention of the legislature to punish a man, who constructed such a machine merely for philosophical experiments, or for the purpose of ascertaining the sufficiency of the machine to produce its described effects." But things are not often what they seem it patent land since in a more recent decision by the Federal Circuit (see In Re Roche Products v. Bolar Pharmaceuticals (1984)) the court stated as follows:

Bolar's intended "experimental" use is solely for business reasons and not for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry. Bolar's intended use of flurazepam hcl to derive FDA required test data is thus an infringement of the '053 patent. Bolar may intend to perform "experiments," but unlicensed experiments conducted with a view to the adaption of the patented invention to the experimentor's business is a violation of the rights of the patentee to exclude others from using his patented invention. It is obvious here that it is a misnomer to call the intended use de minimis. It is no trifle in its economic effect on the parties even if the quantity used is small. It is no dilettante affair such as Justice Story envisioned. We cannot construe the experimental use rule so broadly as to allow a violation of the patent laws in the guise of "scientific inquiry," when that inquiry has definite, cognizable, and not insubstantial commercial purposes.

Caveat Inventor! Pose Roche the Federal Circuit provided a more narrow plaintiff friendly interpretation of that case. Here the plaintiff prevailed against a university not directly involved in activities that would lead to commercial gain (see Madley v. Duke University (Fed. Cir. 2002)). The experimental use defense remains viable, but predicting when a court may in fact allow it appears to be a risky proposition.

Bad Behavior Defense

There are harsh penalties if a court finds "inequitable conduct" on the part of the inventor during the patent prosecution process (i.e. the application process with the USPTO). If found the issued patent is completely unenforceable. But what is the standard for judging the behavior that falls into this category? The Federal Circuit in Kingsdown Medical Consultants v. Hollister (Fed. Cir. 1988) held that gross negligence, in and of itself, may not be enough. The key languages follows:

Some of our opionions have suggested that a finding of gross negligence compels a finding of intent to deceive. Others have indicated that gross negligence alone does not mandate a finding of intent to deceive.

"Gross negligence" has been used as a label for various patterns of conduct. It is definable, however, only in terms of a particular act or acts viewed in light of all the circumstances. We adopt the view that a finding that particular conduct amounts to "gross negligence" does not of itself justify an inference of intent to deceive; the involved conduct, viewed in light of all the evidence, including evidence indicative of good faith, must indicate sufficient culpability to require a finding of intent to deceive.

So this is a "totality of the circumstances" kind of test. Notice that from a practical perspective it will take a substantial amount of discovery to support such a finding. Discovery is expensive to produce. Patent litigation tends to favor, more so than in the general case, those with deep pockets. It would be highly unusual for a small or medium size company to mount such a defense. You might prevail and bankrupt the business at the same (i.e. win the battle and lose the war). There may be significant exposure for online entrepreneurs depending on the type of online business conducted and the technologies used to underpin it. A more in depth treatment of the topic can be found here.

Patent Misuse Defense

Patent misuse is a judge made doctrine that has its roots in the judiciary attempting to limit the patent monopoly to the "four corners of the statute" and not allow a holder to extend property rights beyond it in a way that was felt to be anti competitive. Many commentators believe that the doctrine is coextensive with antitrust laws, which have somewhat fallen out of favor. But what is in or out of favor is driven by "events on the ground" and American jurisprudence has always demonstrated a pragmatic bent, willing to address the pressing issues of the day, adapting to changing views in public policy. That said, as discussed below, Congress has acted to curb the doctrine's scope, but it remains "good law" in certain situations.

It would take a law review article to attempt to add clarity to the controversy surrounding this doctrine (and its extensions elsewhere) and readers would likely be none the better for it. However, given the current debate surrounding software patents, and the prevalence of software patents (felt but mostly unseen) to online businesses, a few words may be in order. While clarity may not be achieved, the far less ambitious goal of general awareness is within reach. If an online entrepreneur has an awareness of the contours of the doctrine, they may have a "hook" for a defense that prevents or mitigates the otherwise devastating consequences of patent infringement. This liability has the potential to have an impact in an insidious manner, catching an unsuspecting business unawares, perhaps through the use of software they had every reason to believe was legitimate.

The doctrine itself is not software specific. It has been around for well over a hundred years and applies to patents in general, software just provides a convenient digital law centric illustration. It is not even clear that there is an obvious fact pattern where it might apply to software patents, online or off, but that is the point (although copyright mis-use was developed under s software licensing fact pattern). If you are arguing patent misuse chances are you are looking for a life preserver, people that are drowning tend not to refuse help.

Patent misuse occurs when a patent holder attempts to mandate the purchase of a non-patented item with use of the patent. A landmark case is Motion Picture Patents Company v. Universal Film Manufacturing Company (USSC 1917). In this case the plaintiff sought to restrict the use of the patented machine (an invention used to display motion pictures) by providing, via a post sale notice attached to the machine (and importantly according to the Court not via contract), that the machine could only be used with specified (non-patented) supplies. Early in the opinion the Court states its apparent displeasure with this state of affairs as follows:

Plainly, this language of the statute and the established rules to which we have referred restrict the patent granted on a machine, such as we have in this case, to the mechanism described in the patent as necessary to produce the described results. It is not concerned with, and has nothing to do with, the materials with which or on which the machine operates. The grant is of the exclusive right to use the mechanism to produce the result with any appropriate material, and the materials with which the machine is operated are no part of the patented machine or of the combination which produces the patented result. The difference is clear and vital between the exclusive right to use the machine, which the law gives to the inventor, and the right to use it exclusively with prescribed materials to which such a license notice as we have here seeks to restrict it. The restrictions of the law relate to the useful and novel features of the machine which are described in the claims of the patent; they have nothing to do with the materials used in the operation of the machine, while the notice restrictions have nothing to do with the invention which is patented, but relate wholly to the materials to be used with it. Both in form and in substance, the notice attempts a restriction upon the use of the supplies only, and it cannot, with any regard to propriety in the use of language, be termed a restriction upon the use of the machine itself.

In other words, the Court is clearly saying that the attempted restriction has nothing at all to do with the patent monopoly and cannot be tied to it. Whatever legal force such notice may have, it is not to be derived from the patent, and cannot be. The Court goes on to comment on the anti competitiveness of allowing such control by stating:

The perfect instrument of favoritism and oppression which such a system of doing business, if valid, would put into the control of the owner of such a patent should make courts astute, if need be, to defeat its operation. If these restrictions were sustained, plainly the plaintiff might, for its own profit or that of its favorites, by the obviously simple expedient of varying its royalty charge, ruin anyone unfortunate enough to be dependent upon its confessedly important improvements for the doing of business.

It is plain as day that the Court here feels strongly about the potential stranglehold a patent holder might have on a market if such control were allowed. In concluding that the restriction on supplies was invalid the Court closes in summary with the paragraph below:

A restriction which would give to the plaintiff such a potential power for evil over an industry which must be recognized as an important element in the amusement life of the nation, under the conclusions we have stated in this opinion, is plainly void because wholly without the scope and purpose of our patent laws, and because, if sustained, it would be gravely injurious to that public interest, which we have seen is more a favorite of the law than is the promotion of private fortunes.

A fair amount of time has been devoted to this case to illustrate that patent controversy is nothing new. The patent debate is always about balancing the quid pro quo for the public with the need to promote and reward innovation. Justice Holmes dissented in this case and argued that such restrictions were well within the right of the patent holder, since a holder was free to refuse to provide the invention to the public altogether. Notice that this is a majority of the USSC stating that extending the patent monopoly would be "evil" under these facts. The doctrine, as held here by the majority, continued to expand until Congress amended the patent laws in 1952, adding section 271(1)-(3).

The following additions to section 271 were no doubt aimed at providing the patent holder more control of how the invention is used. This is indicative of the back and forth that goes. At different times various powerful players exert influence on either Congress, the courts or both. The constant "to and fro" of the patent, debate.

(d) No patent owner otherwise entitled to relief for infringement or contributory infringement of a patent shall be denied relief or deemed guilty of misuse or illegal extension of the patent right by reason of his having done one or more of the following:

(1) derived revenue from acts which if performed by another without his consent would constitute contributory infringement of the patent;
(2) licensed or authorized another to perform acts which if performed without his consent would constitute contributory infringement of the patent;
(3) sought to enforce his patent rights against infringement or contributory infringement;

Where are we now? Well to answer that question would require the aforementioned law review article. Others have probably written on the topic in a far more eloquent and rigorous way. The point here was to illustrate the process by which a doctrine evolves and then recedes. There is no end to the patent debate because the balancing act is complex and events on the ground take unexpected turns. It is, for our purposes here, enough to be aware. If a patent holder attempts to extend the reach of the patent with what feels like "strong arm" tactics, unrelated directed to what was claimed, then the misuse doctrine may trigger.


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