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2.85 Firstly, the claims which define the monopoly may be subject to amendment or invalidation
by the courts in respect of defects which were not detected prior to the grant of the patent.
2.86 Secondly, where the invention is an improvement or development of an earlier subsisting
patent, the patent owner may need to obtain a license and pay royalties to the earlier patent
owner.
2.87 Thirdly, the patent owner’s rights are usually limited by the patent law, quite apart from the
question of validity of his patent. In most patent systems, for example, the patent owner is required
to work his invention, either on his own behalf, or by licensing others to use it, if he wishes to retain
his monopoly. A non-voluntary license may, for instance, be granted to third parties if it can be
demonstrated that the patented invention is not worked or is insufficiently worked in the country.
2.88 Finally, a fourth legal limitation on a patent owner’s right to exploit his invention is that
patented inventions may often be used by Government or by third parties authorized by
Government, where the public interest so requires, on terms fixed by agreement or by the courts.
2.89 With the exception of the limitations just referred to, the grant of a patent allows its owner
to exclude others from exploiting the patented invention. The right of the owner is called exclusive
because it allows the exclusion of others from exploiting the invention and because the owner is the
only one allowed to exploit the invention as long as others are not given an authorization, for
example, by way of license to do so. This exclusive right of the patent owner has two main
applications in practice, namely protection against infringement and the possibility of assigning or
licensing the right, in part or in whole. Licensing of the patented invention will be discussed in a
later chapter.
2.90 An infringement of the exclusive right of a patent owner involves the unauthorized
exploitation of the patented invention by a third party. The making of the invention in particular,
and its development for industrial application, usually involve considerable expense for the applicant
and for the future owner of the patent for invention. The patent owner thus wishes to recover this
expense through exploitation of the patented invention, in particular through the sale of products
that incorporate the invention.
Enforcement of Rights
2.91 Initiative for enforcing a patent rests exclusively with the patent owner. It is he who is
responsible for detecting infringements and for bringing them to the infringer’s attention. In many
jurisdictions there is a strict rule that the patent owner may not threaten legal action without the
possibility of incurring severe countermeasures, including damages, if the threats prove to be on
insufficient grounds. The main purpose of such provisions in the law is to prevent patent owners
from threatening the customers of alleged infringers without pursuing the primary infringer. In
practice, a polite letter pointing out the existence of the patent carries the implication that the
patentee will sue if the infringement continues. Such a letter has proven to be quite effective in
suppressing an infringement.
2.92 If the infringer is persistent, the patent owner may consider whether he wishes to offer a
license. Many incipient disputes are settled through license negotiations at an early stage, the terms
of the license reflecting the bargaining strength of the parties. But if the patent owner is reluctant
to license on terms acceptable to the licensee, he may have recourse to legal action by suing for
infringement and seeking an injunction to restrain the infringement. The invariable legal response
of an infringer who wishes to pursue the contest is to petition for invalidation of the patent.
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2.93 The great majority of patent infringement disputes never reach the stage of court action but
are settled through negotiation. Of those that do reach the stage at which official legal action is
taken, very few go beyond the pre-trial stage, the usual outcome being settlement before any court
hearing, possibly with the help of an unofficial arbitrator. Settlements of this nature can take
several years, especially in complicated cases, but they do not typically involve large legal costs.
Such settlements almost invariably involve a license and possibly damages as well.
Types of Infringement
2.94 There are several ways in which infringement of patent rights might arise. Firstly, there is
the situation where a patent is deliberately infringed by a third party without any attempt to avoid
the infringement. This will either be straight copying of the invention or else involve minor
variations or modifications thereof. This form of infringement may occur because the third party is
unscrupulous, or because he has been advised by his patent agent that the patent in question, or
one or more claims thereof, is invalid.
2.95 With this form of infringement there is generally no argument as to whether or not there is
infringement. If all the features of the patented invention have been copied, then there must be
infringement, and the only matter to be resolved is whether the claims of the patent are valid.
2.96 The second situation which arises is where the infringement is deliberate, but some attempt
has been made to avoid the appearance of infringement. It frequently happens that once an
invention is disclosed either by sale of the product incorporating the invention, or in a published
patent document, or in some other publication, third parties are given ideas. The publication
generally outlines the problem and shows a way of solving it. Third parties then may endeavor to
design an alternative to do the same thing. While third parties may be genuinely trying to design
around the patent whilst still making use of the basic idea of the inventor, the result does not
always clearly fall outside the scope of the claims of the patent. This is probably the most common
form of infringement faced by patent owners and it gives rise to the most litigation.
2.97 The last situation that arises is the case of accidental infringement. As soon as a patent
owner comes across something which embodies his idea he naturally feels that his invention is
being copied. This is not necessarily so, since there may be many people working to solve a
particular problem at the same time. For example, research departments of different large
organizations may all be working on a similar problem. Similarly there may be several companies
who have been asked to tender for a contract to solve a particular problem or to achieve a certain
result, and in so doing may come up with similar ideas to that which may have been involved in the
patented invention. Thus, although the patent owner may feel that his invention has been copied,
the third party has, in fact, arrived at a similar if not identical solution via a different route.
Elements in Establishment of Infringement
2.98 To establish infringement the patent owner must prove all the following elements:
-
the carrying out of a prohibited act;
-
the prohibited act must have been done after the publication of the patent application, or
the issuance of the patent where no early publication occurs;
-
the prohibited act must have been done in the country where the patent has been
granted;
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-
the prohibited act must be in relation to a product or process falling within the scope of a
claim of the patent.
Prohibited Acts
2.99 A prohibited act, the most important element in establishing an infringement, is one which
involves the making, using, selling or importing the patented product, or the use of the patented
process, or the making, using, selling or importing the product directly obtained through the
patented process.
2.100 To make the product means that the product described and claimed in the patent is carried
out in practice. Such making is also referred to as manufacturing especially when the product is
produced on a commercial scale. The method of manufacture and the quantity in which the
product is manufactured is irrelevant so far as infringement of a patented product is concerned.
There are however, three main exceptions in most laws to infringement of exclusive rights to make
a patented product, namely:
-
where the patented product is made for the sole purpose of scientific research and
experiment;
-
where a third party had started making the product before the date when the patent
application for an invention incorporated in the product was filed; and
-
where the patented product is made under a non-voluntary license or under an
authorization granted by the Government on public interest grounds.
2.101 In respect of patented processes, only the making of products directly obtained through the
patented process is a prohibited act. “Directly” in this context means “immediately” or “without
further transformation or modification.”
2.102 One of the difficulties in establishing infringement in respect of products directly obtained
through a patented process, is that of proving that the patented process was used to produce the
product. Some laws partially solve this by providing for the reversal of the burden of proof in
respect of patents for processes by introducing the following presumption: if the product resulting
directly from the use of the patented process was new on the filing date or priority date of the
patent application, an identical product manufactured by a third party is presumed to have been
obtained by the same process. Some other laws go further and eliminate the difficulty by not
limiting the resulting product to one which has to be new.
2.103 The use of a patented product does not require that the use be repetitive or continuous.
The rule is that use is a prohibited act irrespective of who the user of the patented product is, and
for what purpose the patented product is used. The use of the patented product is a prohibited act
irrespective of whether the product actually being used was made by the patent owner, with the
authorization of that owner, or without the authorization of such owner.
2.104 There are, in most laws, five exceptions to infringement of exclusive rights to use a patented
product, namely:
-
where the use of the patented product is solely for purposes of scientific research and
experiment;
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-
where the patented product that is used is a product which was put on the market in the
country by the owner of the patent for invention, or with his authorization;
-
where the use of the patented product occurs in vehicles in transit in the country;
-
where the patented product is used by third parties who have the special right to continue
to make the product; and
-
where the patented product is used under a non-voluntary license or under an
authorization granted by the Government on public interest grounds.
2.105 The sale of a patented product is a prohibited act irrespective of whether the product
actually sold was made by the patent owner, or with or without his authorization. Any product that
corresponds to the description of the invention and is claimed in the patent, even if made without
the authorization of the owner, is a patented product.
2.106 Importing a product simply means that an article which constitutes or incorporates the
patented product is brought into the country where protection has been conferred. Thus,
importation is a physical act of transportation of the product across the border into the territory of
the country. It is irrelevant which other country the product is imported from. Furthermore, it does
not matter whether the importation takes place for purposes of use or sale, or for the purposes of
distribution free of charge. It is also irrelevant whether the imported product enjoys patent
protection in the country in which it was made or in the country from which it was imported.
2.107 The principles relating to the use, sale and importation of patented products, as far as the
definitions of these acts are concerned, applies, mutatis mutandis, also to the use, sale and
importation of products directly obtained through a patented process.
After Publication of the Application or Issuance of the Patent
2.108 The second element in establishing an infringement, namely that the prohibited act must
have been done after the publication of the invention in either a patent application or in the
granted patent, needs little comment. It would be contrary to natural justice if third parties could be
charged with committing an offense when details of the invention were not available to the public
to see what it is that could not be done.
In the Country where the Patent has been Granted
2.109 The third element in establishing an infringement also requires little comment. Generally
speaking, patents do not extend beyond the boundaries of the country which granted the patent.
The patent law of a country has no effect in any other country. However, in a small number of
countries, particularly U.K. Dependent Territories, it is possible to extend the coverage of a United
Kingdom patent to those countries by the owner of the U.K. patent applying, generally within a
period of three years from the date of grant thereof, to register such patent in the country
concerned.
Within the Scope of a Claim of the Patent
2.110 The fourth element in establishing an infringement is one which is normally the decisive
point in any patent litigation. The scope of protection of the patent is determined in all countries by
the claims. The meaning of the claims is ultimately interpreted by the courts. The manner in which
the courts will interpret a claim in turn depends upon the domestic law and to a certain extent the
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rules or regulations. Therefore, what a claim means will depend upon the jurisdiction in which it is
being interpreted.
2.111 The courts, particularly in common law systems, attempt to determine what structure the
language of the claims defines, and whether or not the alleged infringing structure corresponds to
the structure defined in the language of the claims.
2.112 In attempting to answer the question as to whether a particular structure infringes a
particular claim of a patent for invention, the claim should be broken down into its individual
elements, and these compared with the elements of the alleged infringement to see whether they
fit. If the claim can, in fact, be made to correspond to the alleged infringement without stretching
the words of the claim too far, then there may indeed be infringement. If, on the other hand, the
claim contains a limitation to something which is not found at all in the alleged infringement, there
may be no infringement.
2.113 When comparing the individual elements of a claim against the corresponding elements of
the alleged infringement, the following questions have to be answered:
-
Are all the elements of the claim present in the alleged infringement?
-
Do all the elements have the same form?
-
Do all the elements perform the same function?
-
Do the elements have the same relationship to the other elements?
2.114 If the answer to each of these questions is “yes”, then infringement is established,
depending of course, on whether the claim in question is valid. An infringing product or process
must include each and every element of the invention defined in a claim.
2.115 Of course, the establishment of infringement is not always clear-cut. For example, changes
in form will not avoid infringement if there is no change in the result produced. Further changing
the order of steps in a process will not avoid infringement if the result is the same. Moreover the
presence of additional elements in an alleged infringement does not avoid infringement if all the
elements of the patent claim are also present.
2.116 One of the most difficult areas of patent claim interpretation is the determination as to
whether or not there has been a substitution of equivalent elements in the alleged infringement.
This is the so-called “doctrine of equivalents” which is well known in patent litigation practice in
many countries. Briefly stated, the doctrine indicates that an infringer should not be allowed to
continue his actions where he basically makes use of the patented invention while merely
substituting a variant for an element of the invention which is equivalent technically and
functionally to the element as contained in the patent claim, irrespective of whether the variant
used by the infringer turns out to be an improvement or otherwise. Equivalence is restricted to
those cases where the variant or variants used by the infringer function in substantially the same
manner and produce substantially the same result as the element or elements contained in the
claim or claims.
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Remedies Available to the Patent Owner
2.117 The remedies which may be available to the patent owner where infringement has been
established are usually provided for in the national patent law and are generally in two forms, civil
sanctions and criminal sanctions.
2.118 Broadly speaking, civil sanctions are available in all cases of infringement while criminal
sanctions are available only under particular circumstances, where the infringement was committed
intentionally.
2.119 Civil sanctions normally available include the award of damages, the grant of an injunction,
or any other remedy provided in the general law such as the seizure and destruction of the
infringing products or the tools used for the manufacture of those products.
2.120 If the patent owner establishes in court that infringement has occurred, or is occurring, he is
entitled to damages, which the court will assess. Damages will only be awarded against the
infringer for infringements committed since the date of publication of the invention by the Patent
Office in the patent application or the granted patent. The amount of damages may be calculated
in at least two different ways. One way would be to set damages at the amount of the financial
loss suffered as a result of the infringement by the patent owner. Under a second method of
calculation, damages would be based on an account of profits. This does not mean that the patent
owner will necessarily receive all the profits the infringer has made on the infringing articles but,
nevertheless, an account of profits can be very near to the actual profits made. Damages may also
be assessed by taking into account the royalty being paid by any licensees. In this case a court may
decide that damages should be no less than the royalty payments per article and, as they are
damages and not royalties, it is likely that damages will be fixed at a higher figure.
2.121 Under some national laws, an infringer will not be liable to damages if he proves that at the
date of infringement he was not aware, and had no reasonable ground for supposing, that the
patent existed.
2.122 An injunction is a prohibition of the infringing act. In such a case the court will issue an
order directing the infringer to stop making further copies or infringements of the patented
invention. Where the infringing act has not yet been committed but where preparations have been
made by a third party with a view to committing an infringing act (“imminent infringement”) the
injunction means that infringement may not be started.
2.123 Criminal sanctions depend on the structure of the criminal law and the procedures
applicable in the country. The usual forms of criminal sanction are punishment by imprisonment or
by a fine, or both.
Exploitation of the Patented Invention
Selling an Invention
2.124 It is not enough to assess the product itself; the inventor should also discover whether there
is an adequate market for the product covered by his invention.
2.125 Who will buy the product? How many people make up the potential market? This is a
difficult figure to assess but is one of the keys to product survival. Statistics on local populations
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and potential market segments published by the relevant government agencies, as well as surveys
by private firms, can provide the basis for a study of the proposed market areas by age group,
marital status and so on.
2.126 For some of the more sophisticated technology, research establishments, multinational
corporations and the like are showing increasing interest in taking up embryo or partially developed
technology with the object of completing development and thus gaining from the research effort
and securing a significant lead over competitors.
2.127 “Test marketing” is a stage that many larger companies go through before commencing full
scale production. They introduce the product in limited quantities to those viewed as a typical
segment of their potential market. The small businessman also should consider using this technique
before he commits too much time and money launching a product that ultimately may not sell.
2.128 Basically, there are two methods the inventor can use to get his idea into production. He
can sell or license his product idea to a company equipped to manufacture it. Alternatively he can
become a manufacturer himself, either establishing a factory or contracting out production to a job
or machine shop if appropriate.
2.129 Some companies receive new product ideas with coolness. Often, companies are besieged
with unsolicited ideas from the public, very few of which are even worth serious consideration.
Larger corporations frequently have research and development departments in which substantial
sums of money have been invested. Management, naturally, favors in-house developments. Other
companies are wary of inventors who may claim that their ideas have been stolen, when in fact the
company may have been already working on the same idea.
2.130 Larger corporations often publish their policies and procedures regarding new product ideas
from outside sources. Some have “submitted ideas departments.” Most companies would prefer
that the inventor merely send them a copy of his patent on a new idea. Alternatively, the inventor
can submit a copy of his patent application as soon as it has been filed.
2.131 When submitting an idea which is not patentable, the inventor should be aware of the
company’s policy regarding unsolicited ideas before he sends it. Some companies reserve the right
to make arbitrary payment for ideas as they see fit.
2.132 If a patented idea is accepted, the inventor may be able to choose whether he wishes to sell
his patent outright for a lump sum, or enter into a licensing agreement with the company.
Compulsory Licenses
2.133 Licenses that are granted by the owner of the patent are considered “voluntary”, as
distinguished from “compulsory” or “non-voluntary” licenses. The beneficiary of a voluntary
license has the right to perform acts covered by the exclusive right under an authorization from the
owner of the patent for invention. The authorization in a contract is generally called a license
contract concluded between the owner of the patent for invention and the beneficiary of the
license. In contrast, the beneficiary of a non-voluntary license has the right to perform acts covered
by the exclusive right under an authorization given by a government authority against the will of the
owner of the patent for invention.
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