PATENT ENFORCEMENT AND INJUNCTIONS

What Is Patent Infringement?

Patent infringement is when an unauthorized person or entity makes, uses, offers to sell or sells any patented invention domestically or imports a patented invention into the United States during the term of the patent and without permission of the patent holder.  See 35 U.S.C. § 271. Further, anyone who actively induces someone else to infringe the patent is also liable as a co-infringer. If a person or entity knowingly offers to sell, sells, or imports a material component of something that is already patented, that person or entity may also be liable as a contributory infringer provided there was no substantial non-infringing use.

The law presumes that a patent is valid and enforceable by law until successfully challenged. When seeking to enforce your patent, you will inevitably face challenges to the validity of your patent in an attempt to avoid a defendant being held liable for patent infringement. So, in order to enforce a patent against a competitor, you will need to plead and prove that your patent was infringed and be prepared to defend against invalidity claims such as the following: 

• Patent claims are obvious or anticipated in view of prior art

• The patent subject matter is not patent-eligible

• False or misleading, or incorrect information in the patent application

• Relevant patent-related material intentionally withheld during prosecution

• Failure to adequately describe your invention

• Failure to adequately provide enabling detail to support the invention
  

• Indefinite or ambiguous patent claims

Patent Infringement & Damages

Section 284 of Title 35 allows a patentee to recover monetary damages for another’s patent infringement. Upon a finding for the claimant, the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court. When a jury does not find the damages, the court shall assess them. In either event, the court may increase the damages up to three times the amount found or assessed. Increased damages under this paragraph shall not apply to provisional rights under section 154(d).  More About Patent Infringement.

What Are Lost Profits in Patent Litigation?

Lost profits as a measure of damages are intended to make the party whole—to compensate the patent holder for profits lost as a result of the infringement, whereas “[a] reasonable royalty . . . is intended to compensate the patentee for the value of what was taken from him—the patented technology.” While both types may ultimately be included in the total amount of damages awarded, with respect to any particular sale, a patentee is entitled to either a reasonable royalty or lost profits, but not both. Thus, patentees typically seek lost profits to the extent they can be proven. A reasonable royalty for any portion of the infringing sales is not included in the lost profits calculation.  Lost profits may take the form of diverted sales, eroded prices, or increased expenses. To recover lost profits, the burden rests on the patentee to show a reasonable probability that ‘but for’ the infringing activity, the patentee would have made the infringer’s sales. This necessarily requires the patentee to reconstruct a hypothetical market as it would have existed absent the infringing product. Although there is no particular method prescribed for proving causation, it must be supported by sound economic proof. Within this basic framework, the Federal Circuit has approved an award of lost profits under various market reconstruction theories.

What Is A Reasonable Royalty?

For infringing sales where the patentee cannot prove he or she is entitled to lost profits, damages in the form of a reasonable royalty may still be awarded. In those circumstances, the patentee obtains its lost profits on the sales where it can prove all the Panduit factors and a reasonable royalty on the other infringing sales. A reasonable royalty theory of damages seeks to compensate the patentee “for its lost opportunity to obtain a reasonable royalty that the infringer would have been willing to pay if it had been barred from infringing.” This requires an analysis of what the patentee could have insisted on as compensation for licensing the patent to the infringer as of the start of the infringement. A reasonable royalty calculation envisions and ascertains the results of a hypothetical negotiation between the patentee and the infringer at a time before the infringing activity began. Thus, the reasonable royalty calculus assesses the relevant market as it would have developed before and absented the infringing activity. 

Dallas Patent Litigation Attorneys

Our Dallas patent litigation lawyers have earned a reputation for aggressive, responsive, efficient, and most importantly, successful patent litigation. While we are prepared to take every case to trial, we know from our clients' perspective that often, the best litigation is the one that settles in mediation. Our straightforward, unbiased guidance can help you avoid litigation whenever possible. However, if needed, our litigators are skilled in negotiation techniques and have a reputation for achieving very favorable results for our clients in court and out of court.