Patent Infringement Litigation Overview
Step 1: The Pleadings (Complaint, Answer, Reply)
The Complaint: Pre Suit Investigation
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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.
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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
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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.
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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.
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Courts can add or remove parties at any stage of the action (generally by motion of the parties).
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Prior to AIA, courts allowed joinder of all accused infringers in one case.
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AIA forbids joinder except where both:
- The accused infringers are liable jointly or severally.
- Questions of fact common to all defendants are at issue.
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These limitations were intended to curb litigation by “patent trolls” and do not apply to ANDA litigation.
The Complaint: Jurisdiction
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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.
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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.
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Popular jurisdictions include ND CA, CD CA, EDTX, Del, EDVA
The Complaint: Relief
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The Complaint must allege the relief sought:
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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.
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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
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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.
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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:
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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
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Must respond to each allegation in the complaint by either admitting or denying the allegations.
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Defendants generally allege non-infringement and assert affirmative defenses such as patent invalidity or inequitable conduct.
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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.
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Defendants also commonly assert counterclaims, e.g., a declaratory judgment that the asserted patent is invalid and not infringed.
The Plaintiff’s Reply:
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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.
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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:
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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.
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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.
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The court will conduct a case management conference and set the case schedule based upon the parties’ input.
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The parties can revise the schedule based upon a timetable agreeable to both parties as long as it is approved by the court.
