Though we don’t know when, someday life will return to normal. And we may redefine what the new normal is. But we do know that patent litigation will persist. Therefore, we can examine some post-COVID trends.
In-Person Court Hearings and Trials
Over the last year, we got used to conducting all hearings and even trials over telephone or video. It was easy and hard. It was easy because the clients saved money on travel expenses. We could take calls from our homes. But it was also hard because we were not together. We could not slide little notes to each other during a call like we could in-person. The hardest part was reading the expressions of Judge or witnesses. We know that when the Judge looks up during testimony or an argument and opens his/her mouth, it’s our cue to stop and invite the question. That facial cue is missing over the phone. In our patent litigation practice, we do a lot of bench trials instead of jury trials. We can see that a Judge may continue with remote trials in the future, or at least conduct other court hearings (like a Markman claim construction) remotely.
International Trade Commission (ITC) Cases
The ITC has jurisdiction over certain patent infringement cases by virtue of Section 337 of the Tariff Act of 1930. Patentees can use the ITC to obtain an exclusion order of patent infringing goods. Briefly, a patentee petitions the ITC to institute an investigation under Section 337. The accused infringer gets notice of the infringement and exclusion action and steps in. The ITC is a rocket docket. Actually, it’s more like traveling at Mach 5. A huge benefit of the ITC is its speed. There’s no nonsense, no tangential issues, no this or that. It’s straightforward and intense. The remedy is an exclusion order; that is, an order that blocks the importation of the infringing goods.
An issue arose recently on whether the ITC has jurisdiction over non-infringing goods at the border when the underlying theory of infringement is based on inducement to infringement. The theory is that at the border the goods are not infringing but once in the country, the articles will be put together in an infringing manner; and that the defendant induces such actions to infringe the method of use patent. In Caterpillar Prodotti Stradali SRL, ITC, 2021 WL 960759 (Fed. Cir. March 2021), the Court held that the ITC does have jurisdiction. Chief Judge O’Malley (though concurring in the judgment) continues to assert that the ITC does not have jurisdiction over inducement to infringe a method of use patent when the articles at the time of importation are not infringing.
We will also see where parallel actions are launched, which forum will continue to hold onto the case and which forum will stay its proceedings. It is not uncommon now for a patentee to launch a regular district court infringement and a parallel ITC action. The defendant launches a PTAB proceeding (either an IPR or PGR). Many times the district court may stay its action pending resolution of the PTAB proceeding. But given the ITC’s speed, the entire case will be decided likely before any final resolution of the PTAB or district court case. Or will we see both the ITC and court stay actions pending a PTAB resolution.
Challenges To A Patent Specification
A hot topic sure to continue will be the sufficiency of the patent specification. Over the last few years, we are seeing challenges to the patent text through claim construction, enablement, and written description defenses. And to be clear, traditional patent holders raise the same defenses raised by traditional patent defendants when the roles are reversed. In our life science practice, we see no practical difference between the defensive arguments brand pharmaceutical companies make when sued by other brand companies.
Claim construction issues relating to the specification will continue. The patent specification raises issues on what a claim term means. Case law sets out a methodology for claim construction including examining the patent text. And therein lies the rub! We see many tools for claim construction and depending on which side of the “versus”, we use those tools for our benefit. We scour the text for explicit or implicit definitions; we look for patterns of usage; we see if a term is consistently used in a certain way; and we look to see if the patentee disparaged a certain construction.
For invalidity defenses, we scour the text to see if enough description is there. We try to find enough information, data, experiments, results, examples, etc. During the patent drafting process, we harass our inventors to ensure that told they us everything. And in life sciences, we grapple over whether to file the patent application now without experimental data or wait to file later when we have data. And given the drug development cycle, we continue to ask our inventors for more data even though the application is already on file. We use this later developed information to support our original disclosures, when challenged.
And when challenging the patent, the allegations are reversed. We argue that there is not enough information there, no support for what is claimed, that too much experimentation is due, and that the roadmap set out is not a roadmap at all. In other words, it’s too broad, too vague, or too conclusory.
Litigation Funding and Non-Practicing Entities
We don’t take any position on whether non-practicing entities should or should not be allowed to sue for patent infringement. After all, it’s true that some NPE’s are using patents and the associated costs of litigation as a tool to derive a quick settlement. On the other hand, non-practicing entities also include individual inventors, small/medium/large companies, and universities. Given some of the large patent infringement verdicts rendered, NPE lawsuits will continue.
We also saw the rise of litigation funding, in which a funder invests in the lawsuit in exchange for a rate of return. Usually it means that a funder will help pay for the cost of a patent infringement lawsuit in exchange for a part of the reward. Historically litigation funding was frowned upon or even outright not permitted.
But litigation funding now helps patent holders vindicate the patent rights. Without a doubt, patent infringement is crushingly expensive. Many patent holders don’t have the financial means to vindicate any rights. Certain accused infringers know this and brazenly infringe under a “go ahead and sue me if you can” theory. As such, litigation funding helps. But the potential magnitude of the award matters because the funder needs a certain rate of return to even make the initial investment. The patent holder needs a reward too. If the value of the patent infringement case is too low, then no funder will invest, and the patentee cannot enforce the patent.
International Patent Infringement
This and the next few years will continue a heightened trend to international patent infringement. In our global economy, products in the USA are often made abroad. Given the cost and speed of US patent application, patentees will often sue in foreign countries to obtain injunctions and choke off production, which reduces the product quantity in the US. Seemingly, obtaining early injunctions in the US court are increasingly difficult. Patent damages can be high in the US. In foreign countries, however, obtaining injunctions may be easier even if foreign damages are less. Further, because many countries have faster courts or even specialized patent courts, a patentee can obtain better clarity about the position infringement and defenses earlier. And a US patentee can use any expert testimony, court decisions, evidence, etc. obtained in foreign courts for whatever persuasive value it may have in the pending US case.
How we can help you?
We help clients in patent litigation and appeals. Because we know our patent law and litigation cold, we help clients win at the trial level but also preserve issues for appeal. We recognize that high stakes patent litigation will generally result in an appeal. So we are geared to win at trial and preserve that on appeal or appeal to obtain the reversal. We also help other law firms with appeal brief writing, appeal strategy, and oral argument preparation.
About Upadhye Tang LLP
Upadhye Tang LLP is an IP and FDA boutique firm concentrating on the pharmaceutical and medical device spaces. We help clients with navigating the legal landscape by helping on counseling and litigation. Clients call us to help move drug and device approvals along and to represent them in IP and commercial litigation. Call Shashank Upadhye, 312-327-3326, or by email: firstname.lastname@example.org, for more information.
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