Enforcing a Paten
A. Infringement
Once a patent application issues as a patent, the patent holder may file suit in U.S. District Court to enforce the patent against an infringing party. An infringing party is an unlicensed party who has made, used, sold, or offered to sell in the U.S., or imported into the U.S., an infringing invention or its equivalent. A party is also liable for infringement if the party: (a) contributes to the infringing act by selling (or offering to sell) a necessary or important component of a patented invention; or (b) actively and knowingly induces another to infringe. For a patent holder to prevail in court, the patent holder must show, by a preponderance of the evidence, that the accused product or process includes each and every element (or its substantial equivalent) of at least one patented claim. Patent litigation typically involves two steps: (1) a judge determines the meaning of the patent’s claims (often referred to as "claim construction" or a "Markman hearing"); and (2) a jury compares the claims, element by element, to the accused product or process to determine whether the accused product or process infringes the claims.
B. Remedies
A patent holder who prevails on an infringement claim may be entitled to monetary damages and/or an injunction that prevents the infringing party from practicing the invention. Damages can be measured in the form of the patent holder's lost profits or, if the patent holder cannot establish lost profits, a reasonable royalty on the infringing product. The amount of a reasonable royalty may be based on an established royalty rate in the industry, or on a "hypothetical negotiation" between the patent holder and the accused infringer just before the infringement began.
In general, if a patented invention is only a small part of an infringing product, the patent holder can recover only for the value of the patented invention, not for the value of the overall product. However, in very select circumstances, when the patented subject matter forms the basis for the consumer demand for the product, the "entire market value" rule allows the patent holder to recover damages based on the value of the entire product.
A patent holder can only recover damages for the six years prior to filing the lawsuit. In addition, if the patent holder makes products under the patent, but fails to appropriately mark them (e.g., with the patent number), the patent holder generally cannot recover any pre-suit damages unless the patent holder notified the accused infringer of the infringement. If an infringer receives actual notice of a published patent application, and the invention claimed in that application is substantially identical to the invention claimed in a patent that later issues from the application, then the patent holder may also be able to recover a reasonable royalty for infringement that occurred in the period between publication of the application and issuance of the patent.
As noted above, district courts are authorized to issue injunctions to prevent infringement of a patent. Injunctions—particularly injunctions that prevent an accused infringer from making, using, importing, and selling one of its key products—are often even more devastating to an infringing party than a damages award because it effectively forces the infringing party to choose between obtaining a license from the patentee, designing around the patent, or terminating a line of products. Injunctive relief can take the form of a preliminary injunction before and during trial, or a permanent injunction after a finding that the patent is valid and infringed. The grant of a permanent injunction is within the court’s discretion, and the court will only issue an injunction if the patent holder establishes: (a) it suffered an irreparable injury; (b) money damages are inadequate compensation; (c) the balance of hardships is in the patent holder's favor; and (d) the grant of an injunction will not adversely affect the public interest. Historically, it was relatively easy to obtain an injunction when the patent owner prevailed during litigation, but it has become more difficult in recent years.
C. International Trade Commission (ITC) Proceedings
A patent holder may also choose to enforce a patent in an administrative proceeding with the ITC. Unlike district courts, the ITC has no authority to award damages. Instead, the sole remedy is an "exclusion order," which bars the importation of infringing products into the U.S. In addition, ITC proceedings have a "domestic industry" requirement under which the patent holder must show: (a) that it or a licensee is practicing one or more claims of the patent in the U.S. (i.e., the "technical prong"); and (b) that, with regard to the patented technology and within the U.S., there is significant investment in plant and equipment, significant employment of labor or capital, or substantial investment in R&D or licensing (the i.e., the "economic prong").
Once a patent application issues as a patent, the patent holder may file suit in U.S. District Court to enforce the patent against an infringing party. An infringing party is an unlicensed party who has made, used, sold, or offered to sell in the U.S., or imported into the U.S., an infringing invention or its equivalent. A party is also liable for infringement if the party: (a) contributes to the infringing act by selling (or offering to sell) a necessary or important component of a patented invention; or (b) actively and knowingly induces another to infringe. For a patent holder to prevail in court, the patent holder must show, by a preponderance of the evidence, that the accused product or process includes each and every element (or its substantial equivalent) of at least one patented claim. Patent litigation typically involves two steps: (1) a judge determines the meaning of the patent’s claims (often referred to as "claim construction" or a "Markman hearing"); and (2) a jury compares the claims, element by element, to the accused product or process to determine whether the accused product or process infringes the claims.
B. Remedies
A patent holder who prevails on an infringement claim may be entitled to monetary damages and/or an injunction that prevents the infringing party from practicing the invention. Damages can be measured in the form of the patent holder's lost profits or, if the patent holder cannot establish lost profits, a reasonable royalty on the infringing product. The amount of a reasonable royalty may be based on an established royalty rate in the industry, or on a "hypothetical negotiation" between the patent holder and the accused infringer just before the infringement began.
In general, if a patented invention is only a small part of an infringing product, the patent holder can recover only for the value of the patented invention, not for the value of the overall product. However, in very select circumstances, when the patented subject matter forms the basis for the consumer demand for the product, the "entire market value" rule allows the patent holder to recover damages based on the value of the entire product.
A patent holder can only recover damages for the six years prior to filing the lawsuit. In addition, if the patent holder makes products under the patent, but fails to appropriately mark them (e.g., with the patent number), the patent holder generally cannot recover any pre-suit damages unless the patent holder notified the accused infringer of the infringement. If an infringer receives actual notice of a published patent application, and the invention claimed in that application is substantially identical to the invention claimed in a patent that later issues from the application, then the patent holder may also be able to recover a reasonable royalty for infringement that occurred in the period between publication of the application and issuance of the patent.
As noted above, district courts are authorized to issue injunctions to prevent infringement of a patent. Injunctions—particularly injunctions that prevent an accused infringer from making, using, importing, and selling one of its key products—are often even more devastating to an infringing party than a damages award because it effectively forces the infringing party to choose between obtaining a license from the patentee, designing around the patent, or terminating a line of products. Injunctive relief can take the form of a preliminary injunction before and during trial, or a permanent injunction after a finding that the patent is valid and infringed. The grant of a permanent injunction is within the court’s discretion, and the court will only issue an injunction if the patent holder establishes: (a) it suffered an irreparable injury; (b) money damages are inadequate compensation; (c) the balance of hardships is in the patent holder's favor; and (d) the grant of an injunction will not adversely affect the public interest. Historically, it was relatively easy to obtain an injunction when the patent owner prevailed during litigation, but it has become more difficult in recent years.
C. International Trade Commission (ITC) Proceedings
A patent holder may also choose to enforce a patent in an administrative proceeding with the ITC. Unlike district courts, the ITC has no authority to award damages. Instead, the sole remedy is an "exclusion order," which bars the importation of infringing products into the U.S. In addition, ITC proceedings have a "domestic industry" requirement under which the patent holder must show: (a) that it or a licensee is practicing one or more claims of the patent in the U.S. (i.e., the "technical prong"); and (b) that, with regard to the patented technology and within the U.S., there is significant investment in plant and equipment, significant employment of labor or capital, or substantial investment in R&D or licensing (the i.e., the "economic prong").