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Changes In Our Patent System

The last several years have brought major changes to our patent system. The U.S.Supreme Court has significantly restricted a patentee’s ability to obtain an injunction, and there is no longer any adverse inference for unproduced patent infringement opinions. Additionally, as discussed in the articles by Messrs. Shipley and Robbins, the U.S. Supreme Court has made it more difficult to obtain patents, and the United States Patent and Trademark Office (USPTO) has limited the number of claims a patent applicant can use to protect an invention. Further, as I write this article, Congress is planning yet another set of sweeping reforms to our patent system. On balance, these changes are capable of strengthening our patent system and maintaining a strong incentive for innovation. We must, however, vigilantly watch these changes and adjust our practice accordingly.

The United States Court of Appeals, Federal Circuit (CAFC) recently introduced another significant change in the case In re Seagate Technology, LLC, 2007 WL2358677 (Fed. Cir. 2007). In the past, a potential infringer had an affirmative duty to avoid infringing a known patent, and that duty could require the potential infringer to seek the advice of counsel. If the potential infringer violated this duty, a court would find willful infringement and could award enhanced damages up to three times the actual damages. Not surprisingly, willful infringement claims are a common component of any patent suit and are hotly contested. Seagate eliminates the duty to avoid infringement and the requirement to seek advice of counsel. Under Seagate, to be found liable for willful infringement, the potential infringer must be objectively reckless, and the patentee must prove the objectively reckless behavior with clear and convincing evidence. This new standard will significantly reduce findings of willful infringement.

The pending legislation also has a section addressing willful infringement, which would codify portions of the Seagate decision. However, the pending legislation would permit a finding of willful infringement only after the patentee gave a detailed written notice to the potential infringer. Further, reliance on the advice of competent counsel would still be an affirmative defense to a claim of willful infringement.

When the CAFC began rendering decisions in the early ’80s, there was a general disregard for patent rights, which many believed was undermining the national innovation incentive. Now many believe that the strengthened patent system has begun to stifle what it is intended to encourage, so the courts, Congress, and the USPTO have taken steps to adjust the system. As the pendulum swings, some actions will serve to take the system too far back to the ’80s, but others will hit nearer the balance point. We hope you will find this information helpful as we explain some of the changes, and we hope you will rest easy in the knowledge that we are watching and planning how best to protect your rights in this climate of change.