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September 21, 2007

Patent Reform Act 2007 - Part 5 . . . Patent Litigation

Not only does the Patent Reform Act of 2007 include changes that effect how patents are prosecuted, but the Act also includes changes that may effect how patents are litigated.

For example, in an effort to reduce damage awards, H.R. 1908, § 5, requires courts and jury’s to use specific valuation methods listed in the Act to determine "reasonable royalty awards." The purpose of the different valuation methods is to ensure that a "reasonable royalty" is applied only to the economic value attributable to the patent’s specific contribution over the prior art. The court determines which valuation method to use and then identifies any relevant factors to be considered under the chosen valuation method.

H.R. 1908 also adds inequitable conduct as a defense to infringement. The Act requires clear and convincing evidence to show that a person with a duty to disclose information to the PTO had the intent to deceive or mislead the examiner or misrepresented or failed to disclose material information. Information is deemed material if an examiner could have maintained a finding of unpatentability from such information and an intent to deceive or mislead may be shown by circumstances that indicate conscious or deliberate behavior not to disclose material information or to submit false information. If the court determines that inequitable conduct has occurred then the court may deny equitable relief or hold the patent unenforceable.

H.R. 1908 continues to set venue where the defendant has a principal place of business or is incorporated, or where the defendant committed acts of infringement and has a physical facility for a substantial portion of its operations. The Act also provides that venue is proper where the plaintiff resides, if the plaintiff is an institution of higher education or a non profit organization; or where the plaintiff is engaged in substantial research and development, manufacturing or the management of research and development or manufacturing which is related to the disputed patent; or where the inventor plaintiff resides, if the inventor has not assigned or is not required to assign the patent. Moreover, a party may not manufacture venue to invoke the venue of a specific district court, in other words no forum shopping.

We will continue to keep you up to date on the Patent Reform Act and any impact these changes may have on patent litigation. Any comments or thoughts are always appreciated.

Posted by Ward Hobson at 01:23 PM.
Permalink: Patent Reform Act 2007 - Part 5 . . . Patent Litigation
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