Patent owners may wish to revisit using opinion letters. Since 2007, opinion letters in patent cases have not been as prevalent as they were previously. That is, until the U.S. Supreme Court decided Halo Electronics, Inc. v Pulse Electronics, Inc. in June of this year. In Halo, the Supreme Court replaced the Federal Circuit’s strict Seagate test with a test that makes it easier for patent owners to obtain enhanced patent damages for infringement.
Section 284 of the Patent Act provides that a district court “may increase the damages [for patent infringement] up to three times the amount found or assessed.” The Federal Circuit ruled in 2007 in Seagate that enhanced damages may be awarded to a prevailing patent owner that proves infringing conduct was “willful.” However, the recent Halo decision lowered a patent owner’s burden of proof for showing infringement by eliminating a showing of “willfulness” and now requires the Federal Circuit to defer more to a district Court’s decision whether to enhance damages. When deciding if enhanced damages are appropriate, the Supreme Court directed the district courts to more subjectively “…channel the exercise of discretion, limiting the award of enhanced damages to egregious cases of misconduct beyond typical infringement.” Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. ___, 15 (2016).
Under the Halo standard, an opinion letter written by patent counsel can be an effective tool for avoiding “egregious cases of misconduct beyond typical infringement.” Some examples of opinion letters useful in this regard can include invalidity opinions, non-infringement opinions, or right-to-use opinions. In-house counsel and patent owners should seriously consider using opinion letters more often in the aftermath of Halo in order to provide convincing evidence against an allegation of egregious conduct.
The Federal Circuit recently reversed a Patent Trial & Appeal Board (“Board”) decision relying on “common sense” to invalidate a patent. In Arendi S.A.R.L. v. Apple Inc., Google Inc., Motorola Mobility LLC (Fed. Cir. Aug. 10, 2016), the Court held that the Board erroneously applied the law on permissible use of common sense, and that the Board cannot rely solely on common sense to invalidate a patent. The Court explained that “common knowledge and common sense” cannot be a substitute for “reasoned analysis and evidentiary support” in the Board’s obviousness analysis. Specifically, the Court reasoned that the Board should not rely on common sense to supply a missing claim limitation unless the missing limitation is “unusually simple and the technology particularly straightforward.” Further, where a “missing limitation goes to the heart of an invention,” the use of common sense must be “supported by evidence and a reasoned explanation.”
The Arendi decision raises three important considerations for patentees. First, the decision gives a little ground back to the patentee in regard to overcoming the prior art. The Court appears to be taking a step back after the Supreme Court’s ruling in KSR v. Teleflex, which suggested that conclusory analysis can take the place of evidence. This decision favors patent owners by recognizing that the increasingly prevalent conclusory Board findings are likely to face strong challenge on appeal. Second, this case cautions petitioners to limit arguments based on common sense, and instead offer thoroughly-reasoned argumentation. Finally, this case serves as a reminder of those appeal strategies that are more likely to find success. The Board is rarely overturned on appeal, most likely because the Board’s factual findings do not necessarily need to be correct, just supported by evidence. Thus, a petitioner will rarely get a reversal based on an erroneous factual conclusion. However, petitioners that can identify erroneous application of the law are more likely to find success on appeal.
Three-dimensional (3D) printing has become a hot topic in the past few years. 3D printers allow users to produce prototypes and custom artifacts (e.g., prosthetics, patient-specific anatomical models, replacement parts, etc.) with quick turnaround times, and at relatively low cost for single-item production. Moreover, 3D printers are becoming less expensive, making them accessible to everyday consumers. With some units priced in the range of a few hundred dollars, 3D printers may become a common household item.
However, 3D printing also poses some challenges. The use of 3D printing to produce a working firearm has been heavily discussed in the media and has resulted in specifically tailored law (e.g., California’s AB857, requiring “a person who manufactures or assembles a firearm to first apply to the department for a unique serial number or other identifying mark”). Yet even with changes to law like California’s AB857, enforcement is likely to be difficult if not nearly impossible.
The difficulty of tracking down individuals who print 3D artifacts illegally also raises concerns for businesses trying to protect their patented products. Because it is often impractical to bring legal action against individuals that personally make or use knockoffs of patented products, patent owners generally go after the manufacturers, suppliers, and/or distributors of the knockoff products. So, how can a company prevent infringers from making and using its products at home, through the use of a 3D printer? The task is much more difficult, particularly since CAD files used to make a 3D printed artifact are generally not covered by any patent rights attached to the artifact itself.
The USPTO hosted a conference on June 28, 2016 to take a closer look at these issues. One of the areas considered by the USPTO was the application of induced and contributory patent infringement doctrines to prevent unauthorized distribution and download of CAD files for infringing products. Induced and contributory infringement both require knowledge on the part of the inducer or contributory infringer (see, e.g., 35 U.S.C. §§ 271(b) and (c)), hence it is more important than ever for patent owners to be vigilant. Patent owners should periodically monitor sites like http://www.thingiverse.com/ that allow users to upload and download CAD files for 3D printing, and should promptly report CAD files for any of their patented products. Any supplier (e.g., website or file exchange) of CAD files that continues to do so after having knowledge that the CAD files are for making a patented product likely fits the definition of an “infringer” according to 35 U.S.C. § 271(b), “whoever actively induces infringement of a patent shall be liable as an infringer.” While it is not practical in most cases to go after the individuals making 3D prints of patented products at home, patent owners can take steps to prevent websites and file exchanges from providing CAD files and may be able to hold them liable if they fail to do so.
Two relatively new post grant proceedings took effect on September 16, 2012 that may be useful for businesses that wish to invalidate troublesome and overly-broad patents. More specifically, these proceedings provide a challenger an opportunity to invalidate already issued patents. For example, businesses may utilize these post grant proceedings to potentially invalidate troublesome patents when bringing products to the marketplace. These changes were instituted under the America Invents Act (AIA), which included other major changes to the patent system – including a shift from a first-to-invent system to a first-inventor-to-file system.
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Once relegated to the back waters of intellectual property, design patents have become an important asset in many intellectual property portfolios since Apple’s design patents took center stage in Apple Inc. v. Samsung Electronics Co. Apple owned design patents that were directed to the ornamental appearance of a front face for smartphones, to the overall appearance of a table, and to graphic design of the user interface. During the 2012 trial, the jury considered four of Apple’s design patents (along with three utility patents) deciding a $1.05 billion dollar verdict in favor of Apple.
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Inventors – if you are not practicing your sprint drills…you should be. General Counsel – if you are not exploring internal speed tactics for your research and development groups…you ought to. General practice firms – if you are not coaching your technology clients for the 40 yard dash…you might want to start. The race to the Patent Office is about to begin and there will no longer be any ribbon when you come in second place.
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