Two Patent-Related Scourges Addressed

After years of relative neglect, the courts, the U.S. Patent and Trademark Office, and even Congress have taken important steps over the past several months to correct some of the patent system’s most glaring problems. (For one example, see this post from July.) The latest changes attempt to deal with dreaded “submarine patents” and the threat of trumped-up patent suits alleging “willful infringement.”

Submarine patents

In recent years, so-called submarine patents have been produced when savvy applicants have abused the patent office’s option of “continuation applications,” which allows them to repeatedly modify their patent applications while they are in process. There are, of course, legitimate reasons for patent applicants to make modifications. But the existing system has also been exploited by some applicants who have tried to use a series of well-timed continuations to drag out the patenting process. The goal of the strategy is to lurk until a lucrative product related to the patent comes to market. Then the unscrupulous applicants can allow their patents to “surface” and spring potent charges of infringement on an unsuspecting manufacturer.

Now, in an effort to make submarine patents a thing of the past, new rules announced on August 20 will restrict the number of continuation applications a patent seeker can normally file. Jon Dudas, director of the U.S. Patent and Trademark Office, said the changes sought to “bring closure to the examination process more quickly, while ensuring quality and maintaining the right balance between flexibility for applicants and the rights of the public.” More here from the patent office.

Willful Infringement

In other welcome (by most corporations, anyway) patent news, a recent court ruling will make it more difficult for patent holders to collect much-feared treble damages for so-called willful infringement of their patents. The unanimous ruling also came on August 20, but this time from the U.S. Court of Appeals for the Federal Circuit (which handles all federal patent appeals). In the case, which has dragged out for seven years, an inventor had, along with MIT, sued California-based Seagate Technology, alleging willful infringement of two patents on a method to avoid “unwanted dynamics” (i.e. vibrations) in the inputs into mechanical or electronic systems.

In the past, the mere charge of willful infringement, with the associated threat that the accused might have to pay tripled damages and whopping attorneys’ fees, has led many innocent firms to settle patent cases rather than risk a legal battle. With a refreshing dose of common sense, the new decision holds that, to establish willful infringement, plaintiffs need to provide convincing evidence that “the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.”

Further reforms of this willful infringement standard could be coming in the Patent Reform Act of 2007 now wending its way through Congress. The current version of the bill includes a provision that would require companies to warn would-be infringers and give them a chance to respond before they can bring charges of willful infringement. It remains to be seen whether this bill will pass, and the Seagate case could also conceivably be revisited by the U.S. Supreme Court. For the moment, however, companies have won a reprieve from the overly powerful cudgel of frivolous willful infringement charges that have too often held the day until now.

Intrepid interested readers can find the verdict In re Seagate Technology, LLC, No. 06-M830 (Fed. Cir. August 20, 2007) here.

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