Archive for June, 2012

Willfulness Subject to De Novo Review

June 18, 2012

If a court or jury finds that an infringer willfully infringed a patent, the infringer may be subject to enhanced damages of up to three times lost profits or reasonable royalty, as well as attorneys’ fees and costs.  Willful infringement generally refers to situations where the defendant has knowledge of the patent and does not have a valid defense to infringement.  Last week, the Federal Circuit issued a decision in Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc. that clarified some of the standards for willful infringement.

The Federal Circuit set forth the standard for willful infringement its 2007 opinion In re Seagate Techs. LLC.  To establish willful infringement, “a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.”  The patentee must show that the accused infringer knew of the risk or that it was so obvious that it should have been known by the accused infringer, that is the accused infringer was objectively reckless in light of the infringement risk.  An accused infringer can generally avoid this objective prong by demonstrating that it had a reasonable defense to infringement, such as that the patent is invalid or not infringed.

The court had long stated that the objective prong of the analysis is a question of fact for the jury.  It was up to the jury, as a factual inquiry, as to whether the infringer’s defense was reasonable.  Now, the court determined that the issue is more complex.  The court determined that these questions are usually a mixture of law and fact.  Therefore, the Federal Circuit now holds that the objective determination of recklessness is best decided by the judge as a question of law subject to de novo review on appeal.

[T]he ultimate legal question of whether a reasonable person would have considered there to be a high likelihood of infringement of a valid patent should always be decided as a matter of law by the judge.

Willful infringement is a strange area of patent law.  Previously, the determination was made by the jury, but the decision whether or not to award enhanced damages for made by the judge.  Now, most of the determination will be made by the court.  The Seagate decision requires willful infringement to be proved by clear and convincing evidence.  It seems a bit odd to require this enhanced standard for an issue that is now deemed a pure question of law. 

The Federal Circuit loves de novo review where it grants the trial court no deference.

Accelerating Examination: Patent Prosecution Highway

June 8, 2012

The United States PTO has entered into an agreement with a large number of other patent offices called the Patent Prosecution Highway.  This program is intended to permit the sharing of information and resources between patent offices in various countries in an effort to accelerate patent examination, and presumably increase patent quality, by reducing redundancies in the examination process.

Under this program, the applicant files a patent application in one country, usually the country where the inventor or assignee is located, and then files additional applications in other countries claiming priority to the first-filed application.  Once a patent claim is found to be allowable by the patent office where the application was first filed, the applicant may request that other patent offices fast track examination of the application.  Usually this means that the application will be taken up out of turn and moved near the front of the examination line.  This is a type of work-sharing program intended to reduce redundancy in examination.

There is no longer a fee associated with this program.

The PTO has also instituted programs for trilateral accelerated examination with several countries.  These programs permit applicants who receive a positive written opinion or international preliminary examination report issued by the USPTO or the other program country stating that at least one claim meets the requirements of novelty, inventive step, and industrial applicability, to have the opportunity to accelerate examination of the application in the USPTO or the other pilot program country.

The US has PPH agreements with the following countries:

Australia
Austria
Canada
China
Denmark
EPO
Finland
Germany
Hungary
Iceland
Israel
Japan
Korea
Mexico
Norway
Russia
Singapore
Spain
Taiwan
United Kingdom

The PTO has PCT PPH programs with the following countries.  Some were originally scheduled to expire, but have been extended:

Australia
Austria 
China
EPO
Finland 
Japan
Korea
Nordic Patent Institute
Russia
Spain
Sweden

For applicants that plan to file or have filed in any of these countries, the ability to accelerate examination in later-filed offices can be a significant advantage and should be seriously considered.

Rules for Micro Entity Status

June 5, 2012

Last week, the PTO published rules regarding the new micro-entity status for certain applicants under the America Invents Act.  If all of the applicants qualify for micro-entity status, the applicants would pay certain fees at a 75% reduction over the full PTO price.

To qualify for micro-entity status, the applicants must not have been named on more than 4 patent applications and must have an income less than 3 times the average gross income reported by the Department of Labor for the previous calendar year, and has not assigned or licensed the invention (and is not under and obligation to do so) to an entity with an income higher than this amount. 

Alternatively, if the applicants have assigned or licensed the invention (or are obligated to do so) to an institution of higher education, regardless of income level, the applicants qualify for micro-entity status.  As an exception to the number of named patent applications, if, as a result of previous employment, the applicant has assigned (or is under obligation to do so) all ownership rights in any previous patent application, those applications do not count toward the 4 named applications for that applicant.

The PTO is developing forms for applicants to certify to micro-entity status.  Unless the information supplied by the applicant conflicts with PTO records of being named on more than 4 applications, the PTO will take the applicant at his word.  All applicants must meet the micro-entity status for the application to be entitled to the 75% reduction in fees.

The PTO is working to develop rules of practice the requirements for micro entity status and procedures for claiming micro entity status, paying patent fees as a micro entity, notifying the Office of loss of micro entity status, and correcting payments of patent fees paid erroneously in the micro entity amount.

According to Department of Labor statistics, the median household income in 2010 was $49,445.  Thus, unless the majority of their income comes from an institution of higher education, all applicants must have incomes of less than $148,335 and must not have assigned or licensed the application to an entity with an income higher than that amount.

The PTO notes that as of September 16, 2012, US patent applications will be able to be filed by assignees rather than only by the inventors.  Thus, the PTO seeks comments on how the changing definition of “applicant” affects the proposed rules.

The comment period for these proposed fules runs through July 30, 2012.  The rules will not go into effect until the PTO sets fees according to its new statutory authority to do so, probably around March 2013.


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