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Patent Litigation 101

 

In patent litigation, the parties’ claims and definitions are subject to construction. Parties generally base their claim constructions on strategic considerations. Patentees propose narrow definitions and accused infringers typically propose broad ones. The court will consider evidence based on the claim language and its context, such as discussion of the term in the written history of the patent prosecution. Extrinsic evidence can also be used in support of a claim construction.

Patent trolls

You’ve likely heard of patent trolls and what they do to companies, but do you know how they work? Patents are an organized body of rights and incentives for people to invent things. They also offer protection for those who create them and the chance to earn a material reward. Patent trolls are individuals who file these claims with the goal of gaining access to this protected intellectual property, often for pecuniary gain.

Patent trolls are non-practicing entities with a highly litigious business model. While NPEs are a nuisance, they do provide valuable economic services. They can identify patents that infringe on commercial products and demand licensing fees. The problem is that a patent troll can collect tens of thousands of dollars from an individual who wants to use the patent to improve his or her own business.
Preliminary injunctions

A preliminary injunction in a patent lawsuit is a temporary measure imposed on a party to prevent infringement. In most cases, a court will grant a preliminary injunction if the defendant fails to meet its obligations under the agreement. This type of order is typically granted only in a time-sensitive situation. The applicant must demonstrate that the plaintiff is likely to succeed on the merits of the case. Preliminary injunction hearings typically involve briefs filed by both parties and a hearing in the court.

In the event of a preliminary injunction, the court will suspend the infringing party from using or selling the infringing product. Such an order is often issued in the first few months of a patent infringement case, so the plaintiff must make sure that it is timely filed. Although a preliminary injunction is only provisional, it can prevent the defendant from selling the infringing product or seizing evidence.

Fraud in patent litigation

A common defense to patent infringement litigation is fraud. While fraud is not the only defense to patent infringement, it is perhaps the most common. Patents are a reward for innovative work. Without scientific evidence, a patent does not qualify for enforcement. This case shows how fraudulently obtained patents can be used to defeat infringement claims. Fraudulent behavior can also be evidence of monopolization. If a defendant can show he or she obtained a patent through fraud, then it may be a good case to file a lawsuit.

In this case, Xitronix argued that KLA obtained its ‘260 patent by fraudulently misrepresenting material facts to the USPTO. The company proposed two theories of fraudulent behavior against KLA in the patent application process. One theory was based on a prior lawsuit that invalidated KLA’s ‘7362,441 patent, the ‘260 patent’s grandparent. Although the district court found that both theories of fraud were viable, Xitronix’s argument failed to support the claims.

Locations with the most patent litigation cases

While Silicon Valley and the big banks are the hotbeds of the patent industry, there is a distinct lack of intellectual property law in the other two states. Fortunately, the Western District of Texas is a comparatively safe haven for NPEs and investors. In fact, the Eastern District of Texas is seeing a marked decline in cases. Over 60% of patent litigation cases are financed. The new addition to this list is Delaware.

The state of Delaware is home to a significant number of companies, as well as to many technology firms. Since TC Heartland, cases filed in Delaware have decreased dramatically, to less than 10% of all cases. Similarly, California is home to many technology companies targeted by NPEs. However, the state’s reliance on EDTX has been questioned, as the number of cases filed in this state dropped dramatically over two years following TC Heartland.
Process of a patent litigation lawsuit

Appellate courts hear patent litigation lawsuits in the U.S. and are the final arbiters of patent disputes. These trials often involve large sums of money and are risky. A jury may award one side a total victory, or a partial victory. In addition, a patent litigation lawsuit can be appealed if the parties cannot agree on a settlement. Appealing a case involves a lot of writing, and new counsel may be brought in. Appellate courts hear all patent litigation cases, and can reverse or affirm the trial judge’s decision.

The Process of a patent litigation lawsuit begins with a complaint from the plaintiff. This is usually a patentee or licensee who claims infringement. It is imperative that the complaint has certain essential elements. The complaint must name the parties correctly, specify the jurisdiction and venue, and state the facts of the infringement. In some cases, an infringement case may involve indirect infringement, where one business helped another party infringe the patent.