Guide to Patent Litigation

In 2014, approximately 5,700 patent cases were filed for litigation. Roughly, 2% of all granted patents are litigated. Infringement claims drive patent litigation, classified under code 830 by the United States Courts. [1] Each patent case varies in development, resolution, and time frame. However, there is a basic template for patent litigation consisting of options for motions, orders, actions, patent findings, and resolutions.

Litigation Timeline

Copyright 2010 Knobbe Martens Intellectual Property Law Firm

As provided by Knobbe Martens Intellectual Property Law Firm, the following steps are generally followed in most patent cases.

1. Complaint is filed by the plaintiff alleging patent infringement of one or more patents.
2. Defendant may file a transfer motion.
3. Defendant is then able to serve an answer to the complaint and assert counterclaims.
4. After the meeting of counsel, discovery of facts and expert testimony.
5. Motions may be filed.
6. Pretrial briefing occurs.
7. Trial by jury (6-12 jurors) begins and provides a final judgment if a settlement or dismissal has not occurred.

Useful Definitions

The following defines key steps in patent litigation as well as components included in each step. They correspond loosely to the order provided in the timeline above.

Complaint: Document filed in a district court claiming patent infringement. The complaint identifies who has allegedly infringed the patent and how. Often very vague (hence the Innovation/Patent Act). Complaint will be served to the defendant after being filed. Defendant will then be summoned.

• Complaints can also allege willful infringement of a patent/patents. If the plaintiff proves willful infringement then the court may award a larger amount of damages to the plaintiff.
• The plaintiff chooses the District Court to file the complaint. Typically chooses a district where alleged infringement has occurred or infringing products have been distributed.
• Factors that play into choosing venues include time in between filing of complaint and judgement rendered, experience the judge has with patent litigation, procedural rules, and jury's technical knowledge.

Motion to Transfer: Defendant serves a motion to transfer if the district where the complaint was filed is not the business's primary working location. Transferring locations enables defendants to have access to relevant witnesses and documents for discovery.

Answer: Defendants file and serve an answer to the original complaint. The answer typically consists of a response (denial/agreement) to each asserted claim of infringement in the complaint.

• Affirmative Defense: defendant claims the asserted patent is invalid or unenforceable or claims non-infringement.
• Equitable Defense: may be included in defendant's answer. Examples are inequitable conduct or laches. Inequitable conduct alleges that the plaintiff has not been honest and forthcoming with the USPTO when applying for a patent. Laches protects the defendant from potential bias and paying damages to the plaintiff, if the plaintiff delayed filing the complaint for no apparent reason.
• If the answer's claims of inequitable conduct are found to be valid, the asserted patent may be found unenforceable. The patentee may no longer be able to exclude others from using the patented idea and will not be awarded damages for use of the idea.

Counterclaims: asserted by the defendant. Claims that the asserted patent has not been infringed or the asserted patent is invalid. The defendant may assert its own patent against the plaintiff in a counterclaim.

• Plaintiff must file and serve an answer to the counterclaims.

Meeting of the Counsel: Outlined by Rule 26(f) in Federal Rules of Civil Procedure. Required by law to review each party's claims and defenses to see if a settlement may be reached without going to trial. Parties must also discuss what they want to be included in the discovery process and determine a case schedule.

Case Management Process: Following the meeting of the counsel, the judge will set the case schedule based on the report generated in the meeting of the counsel.

Claim Construction Hearing: Court proceeding that interprets the meaning and scope of each patent claim asserted in the complaint and answers. Claims are interpreted based on intrinsic evidence (language of the claims, written exchanges between USPTO and patentee). Claims are interpreted as they would by any normal person involved in the industry and written in plain language.

Discovery: process of gathering evidence and information about the case by both parties. Disclosure of information is regulated based on local patent rules, which may vary by judge or district.

• Scope: parties can obtain documents/information related or pertinent to a claim or defense.
• Number of documents that can be requested has no limits.
• Interrogatories: questions submitted in writing that require a response, limit of 25 perparty.
• Deposition: each party has the right to 10 depositions, access to sworn evidence, without explicit court permission. Companies may serve in a deposition according to Rule 30(b)(6) of the Federal Rules of Civil Procedure. A person associated with the company will then testify.
• Limits of discovery are determined based on protective orders of the court. Companies can protect highly confidential information in this way.
• Third parties may be involved in discovery if subpoenaed.
• Experts often submit expert reports and may be deposed by the opposing party.

Motions occurring Pre-Trial:

• Summary Judgment: occur after a claim construction hearing, party requests the court rules in its favor without a trial based on the claims. Acceptable when there is no actual issue of infringement.
• Motions to Exclude Evidence (in Limine): heard in the pre-trial conference with the judge.

May Exclude:

1. Prior art that was not previously disclosed or disclosure was delayed.
2. Expert opinions not included in the expert report.
3. Proof that the defendant has its own patents.

• Bifurcation Motion: separates issues in a case into different trials.

Appeals: If the losing party does not agree with the result of the trial, it may submit appeals to the US Federal Court of Appeals.

Source

@article{lateef2010U.S.,
 title={The U.S. Patent Litigation Process},
 author={Lateef, Irfan A and Zoretic, Marko R},
 year={2010},
 publisher={Knobbe Martens Intellectual Property Law},
 filename={The U.S. Patent Litigation Process}
}

Content

[2] American Intellectual Property Law Association reported in 2009 that the median cost of a patent infringement suit was 650,000 if less than 1 mil was at risk; 2.5 million if 1 mil to 25 mil at risk; 5.5 million if more than 25 mil at risk.

• More than 95% of patent cases resolved before trial

“Typical patent infringement lawsuit begins with complaint filed by patent owner in a US district court. Complaint identified alleged infringers, and the US patent or patents alleged to be infringed.”

• Usually includes a brief statement of the alleged infringing act
• Doesn’t identify specific products or processes that are accused of infringement
• Average time from filing a case to judgement is 33 months, or 2 years 9 months

Some districts (northern district of CA, Eastern district of TX) have local patent rules that require plaintiffs to identify the specific claims being asserted, and specify where each limitation of each asserted claim is found in each accused product.

References

<ref name="pwc">[3] '2015 Patent Litigation Study', PWC (May 2015).