Patent Infringement Litigation In The US District Courts – Part 1

Patent Infringement Litigation Overview

 

Step 1: The Pleadings (Complaint, Answer, Reply)

The Complaint: Pre Suit Investigation

  • A patentee must form a reasonable basis for bringing an infringement action. Failure to do so can lead to sanctions, including expenses and attorney fees.

  • Patentees should obtain a prelitigation opinion that analyzes the strengths and weaknesses of alleged infringement and examines:

    • Whether the competitor’s product or method infringes the patent (analyzes claim construction issues, tests the accused products and compares the construed claims to the device or process).
    • Whether there are issues that cast doubt on the validity and enforceability of the patent.

The Complaint: Parties

  • Plaintiff(s) –Who Can Sue for Infringement.

    • Generally, only the patent holder has standing to sue for patent infringement alone.
    • Exclusive licensee can sue for patent infringement jointly with the patent owner and can only sue alone if it has been granted “all substantial rights.”
    • Co-owners must sue for patent infringement jointly.
  • Defendant(s) –Who Can Be Sued for Infringement?

    • Anyone who makes, uses, sells, offers to sell, or imports the patented invention or a product made by a patented process.
    • Anyone who contributes to or actively induces the direct infringement.
  • Courts can add or remove parties at any stage of the action (generally by motion of the parties).

  • Prior to AIA, courts allowed joinder of all accused infringers in one case.

  • AIA forbids joinder except where both:

    • The accused infringers are liable jointly or severally.
    • Questions of fact common to all defendants are at issue.
  • These limitations were intended to curb litigation by “patent trolls” and do not apply to ANDA litigation.

The Complaint: Jurisdiction

  • The plaintiff can file the complaint in any U.S. judicial district where the defendant regularly conducts business and knowingly profited from the sale of the allegedly infringing products.

  • The plaintiff’s choice of district often involves many considerations:

    • the speed at which cases in that district typically reach trial;
    • the experience level of the district’s judges;
    • procedural rules adopted by judges in the district; and
    • the sophistication of the jury pool.
  • Popular jurisdictions include ND CA, CD CA, EDTX, Del, EDVA

The Complaint: Relief

  • The Complaint must allege the relief sought:

  • Permanent Injunction:

    • Generally not granted to NPEs, and limited to where the plaintiff practices its invention, is a direct market competitor of the defendant, and the patented technology is at the core of the business.
    • Somewhat rare these days, but more common in the pharmaceutical field.
  • Money Damages:

    • Lost profits: Uncommon -must prove that but for the infringement plaintiff would have made the infringer’s sales.
    • Reasonable royalty: Fact intensive and includes a consideration of royalty rates previously agreed by the patent owner and comparative royalty rates in the industry.
    • Other: Pre-judgment and post-judgment interest, attorneys’ fees if the case is exceptional, and costs.

The Summons and Complaint: File and Serve

  • The Summons: Must ask the Court to prepare a summons to accompany the complaint.

    • A summons is a written notice, notifying the defendant and the court that the complaint has been served on all relevant parties and listing the date of the first court appearance for the lawsuit.
  • After the complaint has been filed, the plaintiff must then serve a copy of the summons and complaint on the defendant.

The Defendant’s Answer:

  • In general, the defendant must serve an answer to the complaint within 21 days after being served with the summons and complaint.

    • A defendant outside the U.S. who consents to service is allowed to respond within 90 days of the date the request to waive service was sent
  • Must respond to each allegation in the complaint by either admitting or denying the allegations.

  • Defendants generally allege non-infringement and assert affirmative defenses such as patent invalidity or inequitable conduct.

  • A common equitable defense is laches, which prevents recovery of damages if the plaintiff delayed filing suit for an unreasonable and inexcusable length of time, thereby causing prejudice to the defendant.

  • Defendants also commonly assert counterclaims, e.g., a declaratory judgment that the asserted patent is invalid and not infringed.

The Plaintiff’s Reply:

  • If the defendant has asserted counterclaims (e.g., asserting that the plaintiff’s patent is invalid), the plaintiff must serve a reply, which is the plaintiff’s answer to the counterclaims.

  • In general, the plaintiff must serve a reply to the counterclaims within 21 days after being served with the answer.

Step 2: The Preliminary Conferences (Rule 26(f) and Case Management)

The Rule 26(f) Conference:

  • Parties must disclose amongst themselves certain types of information in ”initial disclosures” near the outset of the case, such as:

    • Identification of relevant documents and individuals likely to have discoverable information that the disclosing party may use to support its claims or defenses;
    • Computation of any category of damages claimed; and
    • Each party’s proposed schedule for the case.
  • After the Rule 26(f) Conference, the parties must submit a joint report to the court, setting forth each party’s positions on the required topics of discussion, including the case schedule.

  • The court will conduct a case management conference and set the case schedule based upon the parties’ input.

  • The parties can revise the schedule based upon a timetable agreeable to both parties as long as it is approved by the court.