Basics of Patent infringement

Patent infringement can be described with many different terms such as:

1. Direct patent infringement
   1. Literal infringement
   2. Infringement under the doctrine of equivalents
2. Indirect patent infringement
   1. Active inducement of infringement
   2. Contributory infringement
3. Joint infringement
4. Extraterritorial reach of U.S. Patents

These are all the ways that you can incur liability for patent infringement.  Let’s discuss these terms are used.

Direct patent infringement occurs when someone other than the patent owner or a licensed entity makes, uses, offers to sell, sells, or imports the patented product into the United States.  Indirect patent infringement occurs when someone helps another to infringe a patent.  Liability for patent infringement of a U.S. patent arises only for activities within the United States or if activities outside of the United States have an impact within the United States.  This refers to the extraterritorial reach of a U.S. patent.

How do you determine if patent infringement exists?

Patent infringement exists when a product incorporates each and every element of a claim of a patent (a.k.a. literal infringement). For example, below is a sample wooden pencil claim.

To infringe the claim above, a competitor must incorporate each and every element in their product or service.  Referring now to the table below, the product has to incorporate elements A, B, and C as shown in Scenario 1.  If the product incorporated only elements A and B as in Scenario 2, then no literal infringement exists.  The products in Scenarios 3 and 4 do not literally infringe the claim because they are missing elements A and B.

If the product included additional features (represented by D in Scenario 5), literal infringement still exists because the product incorporates all of the elements A, B, and C.

In Scenarios 2-4, an element is not found in the product.  As such, literal infringement does not exist.  However, infringement can still exist under the doctrine of equivalents.  Under the doctrine of equivalents, insubstantial differences are still covered by the claim if the product performs substantially the same function in substantially the same way to obtain the same result.  (i.e., function, way, result test).

A person or company that makes, uses, sells, offers to sell or imports a product that infringes the claim is described as directly infringing the claim.

How do you determine if indirect patent infringement exists?

Indirect patent infringement occurs when a third party helps another person or company directly infringe a patent. A third party that teaches or encourages someone else to directly infringe a patent may be liable for patent infringement under a theory of active inducement of infringement.

Or, a third party that produces a crucial part that another person or company could use to make the patented product.  Patent infringement still exists under a theory of contributory infringement.

You can be liable for indirect infringement only if someone else is directly infringing a claim of the patent.

How do you determine if joint infringement exists?

Joint infringement may exist when two or more entities work together to make a patented product or process.  For example, to avoid infringing a process patent, companies have tried to divide the steps in the patented process among two companies so that no one entity is performing all of the steps in the patented process.  E.g., Akamai v. Limelight (Fed. Cir. 2015).

More particularly, entity A may decide to perform steps 1-3 of a six-step patented process.  Entity B then agrees to perform steps 4-6 of the patented process.  Neither A nor B performs all of the six steps in the patented process.  However, because they agreed to work together to perform all six steps, patent infringement may still exist.

Unless both companies are not working in conjunction with each other, the courts will attribute the actions of one company to the other company to find direct patent infringement.

Who is liable for patent infringement?

The person or company that directly and indirectly infringes a patent is liable for patent infringement.

However, the net is much broader than you might think.  For example, everyone up and down the supply chain is liable for patent infringement.

What is the extraterritorial reach of a U.S. Patent?

A U.S. patent only protects its owner for activities within the United States.  A competitor that makes and sells the patented product in a foreign country does not infringe the patent owner’s U.S. patent.  The patent owner has to have a patent in the foreign country to prohibit their activities in the foreign country.

However, if the activities of a US company in a foreign country have an impact here in the US could be liable for patent infringement.  See Lost foreign profits recoverable by patent owners.  Also, a person or company is liable for patent infringement if product sales in a foreign country are meant to be used in the United States.  See Offers for sale: foreign sales for use in the U.S. infringes the patent.