Hi,
Maybe this article is useful to see how these things happen. What it says is that PFE must have been able to find a reason (ie evidence) that someone threatened them which was good enough to convince a judge to take this case. Usually you cannot go around trying to invalidate people's prize patents and force them into million $ legal bills.
Enforcing Your Rights
Cease and Desist Letters: The Legal Pitfalls for Patentees
By Steven B. Pokotilow and Matthew W. Siegal
The Corporate Counsellor Newsletter
February 1998
THE FIRST STEP in enforcing a patent is usually to send a cease-and-desist or charge-of-infringement letter. However, these letters are sometimes written without
full consideration of all the ramifications that can flow therefrom.
In certain situations, it is appropriate for the letter to contain a strongly worded, direct charge of infringement. But sending an explicit charge of infringement can open
a patent holder up to a declaratory judgment action of patent invalidity or non-infringement.
The Declaratory Judgment Act, 28 U.S.C. § 2201(a), provides the recipient of an express charge of infringement with the opportunity to bring a declaratory
judgment action of patent invalidity and/or non-infringement in what may be a forum the patent holder would not have selected. Thus, it is often desirable to have a
complaint already prepared before an express charge of infringement is sent, with a blunt charge of infringement will often start a race to the courthouse, as each side
jockeying for its desired forum.
Of course, the patent holder may not have the means or resolve to litigate the patent and may not have intended to end up in court. Under such circumstances, the
patentee may want to think twice before sending a letter that explicitly alleges infringement.
In order for a patent holder to give an accused infringer the opportunity to bring a declaratory judgment action, the accused infringer has the burden of establishing
that the patentee's conduct created "an objectively reasonable apprehension on the part of the...[accused] that the patentee will initiate suit if the activity in question
continues." EMC Corp. v. Norand Corp., 89 F.3d 807, 811 (Fed. Cir. 1996).
Reasonable Apprehensions
It should also be noted that an express charge of infringement and threat of patent litigation are not always required to put a putative infringer in reasonable
apprehension of patent litigation. Id. In the absence of an express charge of infringement, the courts will also look to the "totality of the circumstances."
In either event, a declaratory judgment plaintiff has the burden of establishing that it had a reasonable belief that it was going to be sued for patent infringement. Shell
Oil Co. v. Amoco Corp., 970 F.2d 885, 888 (Fed. Cir. 1992). Thus, belligerent action coupled with thinly veiled threats of litigation can be enough to create a
declaratory judgment cause of action.
In view of the foregoing, a patent holder who is concerned about litigating its patent in an inconvenient forum (or litigating at all) may seek to write a "charge of
infringement" that will not create an objective, reasonable apprehension of patent litigation. There are no magic words to accomplish this. The courts will look at the
substance and totality of the activities, rather than mere formalities. But it has been held that mere invitations to negotiate or offers for licenses, unaccompanied by
threats of legal action, can be insufficient to create a justifiable controversy and therefore do not give rise to a decla-ratory judgment cause of action. EMC Corp.,
89 F.3d at 812.
Courts have also recognized that during negotiations, a patent holder may often be forced to assert that its patent is valid and that, if pushed, it would enforce its
patent, even if the patent holder had no present desire to bring suit. Such statements, in the course of negotiations, have been considered insufficient to create a
reasonable apprehension in the accused infringer of patent infringement litigation. Shell Oil, 970 F.2d at 888-89.
It has also been held that provoking a patent holder into making a threat of infringement is insufficient to create a reasonable apprehension of litigation. Thus, merely
asking a patent holder if it would file suit in the event its settlement offer was rejected and receiving a positive response, has been held insufficient to create a
declaratory judgment cause of action. See Id. at 889.
A patentee must also consider whether its charge of infringement is too soft. For example, over-veiling a threat of infringement may cause the accused infringer to
believe that the patent holder lacks confidence in its patent and would be satisfied with a nominal royalty. This could protract or complicate negotiations.
In addition, an inadequate notice of infringement can limit patent damages in the event the matter goes to trial. For example, in the case where a patent owner or its
licensee does not mark its products with the patent number, patent damages do not accrue until an actual notice of infringement is given to the infringer. 35 U.S.C. §
287(a). This actual notice is generally the initial charge of infringement.
In order to be adequate under Sec. 287(a), the charge of infringement must notify the recipient, with sufficient specificity, that the patentee believes that the recipient
may be an infringer. SRI Int'l v. Advanced Tech. Labs, Civ. No. 96-1437, 1997 WL 656241 (Fed. Cir. Oct. 23, 1997).
According to the U.S. Court of Appeals for the Federal Circuit, sufficient specificity can be achieved "when the recipient is informed of the identity of the patent and
the activity that is believed to be an infringement, accompanied by a proposal to abate the infringement, whether by license or otherwise." Id. at *8.
In SRI, the defendant argued that the actual notice requirement of Sec. 287(a) was not met because the charge of infringement merely stated that defendant's product
"may infringe" the patent and included an offer for a license. This arguably did not satisfy the actual controversy criteria of 28 U.S.C. § 2201.
Requirements Different
The Federal Circuit held that the requirements and purposes of each section were different and that the Sec. 287(a) notice requirement had been complied with
regardless of whether declaratory judgment action had been available. Thus, the Federal Circuit acknowledged that a subtle area exists between the patent notice
and declaratory judgment statutes where a notice is sufficient to begin the accrual of patent damages, but avoids the possibility of a decla-ratory judgment action. Id.
at *8.
The foregoing are some of the legal issues that must be considered before sending a notice of infringement to a potential patent infringer. Although each case is
unique, these issues need to be considered to avoid errors that can be expensive and may ultimately deny to the patentee all the expected benefits of his or her
patent.
© 1998 The Corporate Counsellor |
