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:
- 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.
- 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.