What is a patent study? At a minimum, a patent study is a review of an issued patent to check for the patent’s term, a check to determine whether maintenance fees have been paid, a review of the claims to formulate an opinion on claim scope, and a review of the patent’s specification and a check to determine whether other parent and child applications exist as well as foreign counterparts.
More can be done such as reading through the file history of one or more patents to look for disclaimers of claim scope and other defects, actively searching for prior art that might invalidate specific patent claims, and researching the past litigation history of the patent and patent owner. These are some of the activities that support a patent study.
However, the activities performed for the patent study is dependent on the purpose of the patent study. In this blog post, we discuss the purpose of a patent study when a company learns about a patent that they might be potentially infringing or after the company receives a cease and desist letter (a.k.a. notification letter) from a patent owner. Other purposes for the patent study may exist depending on the position of the company commissioning the patent study. For example, the patent study may also be used to evaluate a potential license deal and a potential purchase or sale of the patent. However, this blog post does not directly address these other purposes and the activities associated with those other purposes.
In the situation where the company is a potential defendant in a patent infringement lawsuit, the basic purpose of the patent study is to evaluate risks, namely, the risk of a lawsuit and the risk that trebled damages will be awarded to the patent owner in the lawsuit. Other risks may be evaluated but these are the two basic risks that will be discussed in this blog post.
Risk of a lawsuit
The risk of a lawsuit focuses on whether a product is infringing or not on the patent’s claims. It is easier to visualize this on a scale with infringement and non-infringement being on opposite sides of the scale. The closer the product is to infringement, then the more likely it is that a lawsuit will occur, and vice versa. After review of the patent claims, if the product at issue is clearly covered by the patent claims, then the likelihood of a lawsuit is great. However, if the product at issue is clearly not covered by the patent claims, then the likelihood of a lawsuit is significantly lower.
The determination of whether the product is covered or not by the patent claims is determined by the judgment of the reviewer, typically a patent attorney. Before litigation, the defendant’s attorney compares the patent’s claims and the product to determine where the patent owner’s attorney might take liberal or broad interpretations of a particular patent claim. The defendant’s attorney reviews the case to provide an opinion as to where and at what points the patent owner’s case may be the strongest and weakest.
In many instances, there are no clear-cut cases of infringement and non-infringement. Arguments can usually be crafted that a product is not infringing a particular patent claim. However, there are strong arguments and weak arguments. As such, in order to obtain a proper assessment of the product and where it lies within the non-infringement – infringement scale, it is important to seek the advice of a qualified and competent patent attorney so that the patent attorney can assist in providing guidance as to which arguments are strong and which are weak.
In order to move the product closer to the non-infringement side of the scale, the patent study may also provide one or more options as to whether a simple modification that does not significantly impact the function of the product can be made in order to move the product toward the non-infringement side of the non-infringement – infringement scale. These are known as design-around options. Optimally, the design around does not significantly affect the function or aesthetics of the product but merely focuses on an insignificant limitation in the patent claim where the patent owner made a disclaimer in the file prosecution history.
Risk of treble damages
The risk of treble damages is determined by reviewing whether the infringer’s infringement of the patent was willful. However, the willfulness of one’s activities may have less bearing on the risk of litigation. If the patent owner feels that there is an infringement of its patent, then litigation will ensue. Even if the infringer’s infringement was innocent, then the patent owner would still request remuneration for the infringement. If the infringer’s infringement was willful, then this just sweetens the pot for the patent owner since the patent owner can now request damages be trebled.
To determine whether an infringement is willful, a subjective inquiry and an objective inquiry are made into the activities of the infringer.
With respect to subjective inquiry, the state of mind of the defendant is paramount. If possible, the patent study will state that the defendant’s products do not infringe for such and such a reason. With this opinion, the defendant can now testify that he or she relied on the opinion of counsel, and thus did not have the requisite subjective intent to willfully infringe the patent.
The objective prong of the willfulness determination is directed to whether there was a high risk of patent infringement. If there are reasonable defenses to patent infringement then there is no high risk of patent infringement, and thus, no willful infringement. The reasonable defenses may be directed toward non-infringement and even invalidity of the patent including but not limited to anticipation, obviousness, enablement, written description, etc. Moreover, it matters not when the defendant uncovered reasonable defenses. The reasonable defenses could have been uncovered before trial but also during the trial. This means that new defenses that are raised during trial can avert a finding of willfulness.
In sum, the purpose of a patent study for a potential defendant to a patent infringement lawsuit is to assess the risk of a lawsuit, and if a lawsuit is filed, the risk of damages being trebled. In order to determine these risks, the patent is dissected and compared to the product to determine where the product lies on the infringement – non-infringement scale. Also, subjective and objective inquiries are made to determine where the defendant might be on the innocent-willful scale for the potential of trebled damages.
I invite you to contact me with your patent questions at (949) 433-0900. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego, and surrounding cities.