Expert Advice: Patent defendants have the upper hand—for now

Several significant changes in rapid succession favor patent defendants and significantly diminish the fearsome power of patents.

By Jay Sandvos, Bromberg & Sunstein LLP -- Electronic Business, 6/12/2007

Do you know what it's like to be accused of patent infringement? You've seen it in the movies. You start to feel like you're trapped inside a bullet-riddled apartment, screaming out the window, "You'll never take me alive, coppers!"

But the patent owners are betting that you don't really mean it. They're betting that you'll make the cold, rational business decision that it's cheaper and more certain to pay them off with a settlement—basically that you can be bullied like a nervous accountant (sorry, dudes) in a biker bar: "I'm sorry, I must have the wrong address…."

But wait, I've got a different message for you straight from the marine drill instructors on Parris Island: "Hang tough, maggot! You can do it!" In fact, we are entering a Golden Age in which the law has never been better for patent defendants—aren't you just the luckiest guy on the planet?

Patent law used to change slowly, but recently there have been several significant changes in rapid succession, all favoring patent defendants. Taken together, they have significantly diminished the fearsome power of patents.

First and foremost, the Supreme Court in its recent KSR decision redefined what is "obvious." A valid patent now has to be a more significant improvement than was required before. It is almost automatic that a patent defendant will argue that the patent attacking them is invalid because it is obvious. Post-KSR, such arguments are much more likely to succeed.

But even beyond the monumental KSR decision, several other recent developments are helpful for patent defendants.

Until recently, the claims of a patent covered a little bit more than their literal language. To prove literal infringement, you have to show that every word in one of the claims is present in the accused product. But the accused product might differ from the exact literal language of the patent claims in just a small insignificant way. If so, that small difference might once have been viewed as "equivalent" to what the claims literally required. So there could be infringement under this doctrine of equivalents.

But that too has changed. The doctrine of equivalents no longer applies to any part of the claims that were changed after the original filing.With related developments in this area of the law, even the original claim language may not be entitled to equivalents. So it is becoming rare for the doctrine of equivalents to be a factor in a patent case. Again, advantage: accused infringer.

The courts have also tweaked a technical point of patent law concerning "inducement."For example, a patent claim for computer software might not be directly infringed by the software itself, but rather only by the end use of the software.For understandable reasons, the patent owner prefers to sue the software maker rather than the customer. The law allows this in the form a claim for inducement of infringement where the patent owner proves that sales of the accused product result in infringement when used by the customer.

Inducement requires a special kind of knowledge and thinking. In the past, many courts required only that the accused party sold their products knowing how they would be used by the customer. But now, the courts have held that inducement requires knowledge of the patent and selling with a "specific intent to infringe." That is a much narrower condition which makes inducement cases much harder to prove. And a defendant should be able to avoid having that kind of intent simply by getting a written opinion letter from their patent lawyers. Again, benefit to the accused defendant.

Another recent change is what happens when you win a patent case. Before, the courts automatically issued an order called an injunction, prohibiting the sale of the infringing product. If it was a company's key product, the injunction effectively put the company out of business. This threat was one of the mighty rights contained within a patent and provided great leverage in licensing and settlement talks.

But no more. The injunction of victory is no longer automatic. Now the judge has to meditate on all the factors of a case and decide if an injunction is fair and appropriate. For instance, if the patent owner doesn't sell his own products that compete with the infringing product, an injunction is going to be a lot less likely. As a result, the implicit threat of an injunction has been significantly reduced, easing the pressure on the defendant accused of infringement.

So some of the scary monsters of patent law—equivalents, inducement, and injunctions—have been whittled down in size, and the courts are clearly looking around for other beasts to tame (is that the creature from the "obviousness lagoon" I see hightailing it away?). It truly is the best of times for patent defendants.

Jay Sandvos is a partner with Bromberg & Sunstein LLP, a Boston law firm focusing on intellectual property and business litigation.