Patent Litigation Quiz

PDF page 75: First you decide whom to sue. Many options may exist. If the infringer is a corporation, you can sue it. But you can also sue its owners and/or officers if it is a closely held company or is dominated by a single shareholder or manager. If the infringer has subsidiaries, you must choose which of them to include as defendants. Recall that your patent gives you the right to exclude others from making, using, selling, offering for sale, or importing your invention in the territory the patent covers. (We will assume for simplicity that you own a U.S. patent; foreign patents can be obtained in other countries and enforcement of those foreign patents is subject to their local laws.) Any person or entity that violates one of these exclusive rights is a potential defendant.

PDF page 75: Strategic issues should be considered in deciding whom to sue. For example, the location of one or more defendants may make it hard to include them in a lawsuit filed in a place (“forum”) convenient to you. Although the infringer’s customers are also infringers (i.e., they “use” the infringing product or service), most patentees disfavor suing customers because these are also the patentee’s customers or potential customers—and suing them may be bad for business. Often, the manufacturer or seller of the infringing product or service indemnifies and defends its customers. In other words, in many cases the manufacturer or seller of a product will agree to “cover” its customers in the event of a patent infringement claim. So, if the infringing manufacturer and/or seller is already a defendant, you gain little by suing customers, except their

PDF page 76: collectively. Common sense might suggest suing them one at a time, to avoid having them gang up on you. But experience shows that suing multiple defendants simultaneously is often a better strategy. It turns out that, in many cases, rather than encouraging them to gang up on you, they spend most of their energy trying to sort out differences among themselves and trying to present a united front.

PDF page 76: Although the America Invents Act narrowed the joinder rule in patent cases beginning in September, 2011 to cases where a plaintiff can show a “common question of law or fact” as well as a true “transaction or occurrence” between the defendants (which must be more than infringement of the same patent), judges still typically consolidate separate cases involving the same patent for their own convenience in handling discovery and pre-trial issues. Thus, proceeding simultaneously against multiple defendants can still be an effective strategy.

PDF page 76: Which patents (if you have more than one) and which claims of those patents you assert in a lawsuit is another important decision you must make. Twenty years ago, you could simply file a lawsuit against an alleged infringer, listing your patent(s) and little more. You could defer deciding which claims to assert against which allegedly infringing products or services until after you received information from the defendant(s) through discovery in the litigation. However, courts now routinely require that you provide details in the complaint you file, or shortly after, about which patent claims are asserted against which product or service, and also that you provide a “claim chart” that details those assertions precisely. Although it is possible to revise these assertions after receiving more information during the discovery process, your initial assertions remain in the court’s record and can come back to haunt you if they are not consistent with your revised assertions. Therefore, careful pre-filing investigation and analysis is crucial to a successful pursuit of the infringers.

PDF page 76: Ideally, hire not only an experienced patent trial lawyer to guide this effort, but also the experts you will rely on in the litigation, and who will testify during the trial on how and why the accused products or services infringe your patent(s). Experts can provide essential evidence of the infringement during the trial. Good experts are critical to success in litigation, as much as experienced trial lawyers, but are sometimes surprisingly hard to find. First, you must find an expert who is neutral, or at least appears so. Most experts are employed in the same field as the patentee and the alleged infringer, making them potentially unsuitable candidates because they have allegiances to existing companies that suggest the possibility of bias. Second, a good expert must not only know their subject thoroughly, but also be able to communicate it to a lay audience (i.e., the nonexpert judge and jury). Such communication skills are not always found in experts with strong technical credentials. Finally, you want an expert who has the right skills, but not one who appears to be a hired gun (exemplified by someone who spends most of their time testifying for a fee).

PDF page 76: The selection of where to file is an important, perhaps determinative, decision. As we have noted, patent infringement cases seeking damages can only be filed in U.S. federal courts (as opposed to state courts). If your defendant is a private party, the proper location for the case (called “venue”) is the federal district court

PDF page 77: At the outside, any suit filed more than six years after the infringement began and was reasonably capable of being discovered can give rise to a defense of “laches” and/or “estoppel”by your opponent. In other words,the accused infringer is arguing that you waited too long to bring your infringement claim. It may be necessary for you to prove that the defendant was not prejudiced by your delay. If laches applies, which simply means you waited an unreasonable time tomake your claim, prejudicing your opponent, your damages will be limited to those that arise after you filed your lawsuit. If estoppel applies, which means that you not only delayed, but affirmatively misled your opponent into believing you would not file suit, your claim is barred altogether.

PDF page 77: At the outside, any suit filed more than six years after the infringement began and was reasonably capable of being discovered can give rise to a defense of “laches” and/or “estoppel”by your opponent. In other words,the accused infringer is arguing that you waited too long to bring your infringement claim. It may be necessary for you to prove that the defendant was not prejudiced by your delay. If laches applies, which simply means you waited an unreasonable time tomake your claim, prejudicing your opponent, your damages will be limited to those that arise after you filed your lawsuit. If estoppel applies, which means that you not only delayed, but affirmatively misled your opponent into believing you would not file suit, your claim is barred altogether.

PDF page 77: ix If the alleged infringer is the federal government itself, or a government contractor, the proper venue is the Court of Federal Claims. 28 U.S.C. §1491 Another forum for enforcing a U.S. patent against imported goods exists at the U.S. International Trade Commission (ITC) in Washington, D.C. 19 U.S.C. §1330. The ITC has the power to investigate alleged infringement and bar goods found to infringe from entering the country. This can be a very effective tool against infringing imports, especially if all the sources of those imports are unknown. The ITC’s jurisdiction is “quasi in rem” so that the infringing goods themselves provide the basis for jurisdiction, allowing their adjudication and prohibition even if the source of the goods is unknown. Proceedings before the ITC are extremely expedited, usually taking 18 months or less, and can be very expensive.

PDF page 78: So, do these considerations dictate that you ambush your opponent and appear to be unreasonable by suing without notice? No, a middle ground does exist. Consider filing the lawsuit simultaneously with, or immediately after, making a demand that the infringer cease the infringing activities. You can defer formally “serving” the lawsuit on your opponent (that is, providing notice by delivering the complaint) for at least 30 days, and as long as 90 days in some courts. This allows you to negotiate with your opponent from a position of strength and with your choice of forum firmly established, without appearing unreasonable.

PDF page 78: remains-judge or jury. Until the 1990s, almost all patent cases were tried to a judge because they were thought to be too complex for juries. but then some enterprising plaintiffs' lawyers decided to request that a jury decide their case, perhaps seeking to take advantage of the complexity of the cases and the belief that juries trust patents because they are issued by the federal government after examination by USPTO experts. That has led to the current reality, which is that almost all patent cases filed now request a jury trial. Interestingly, statistics show that this trend does not always benefit plaintiffs. Depending on the venue, plaintiffs only win 60 to 75 percent of the time, despite having the advantage of being able to pick what cases they file (presumably they self-select only the strongest cases) and where they file them (i.e., they can select