Title: Reining in Remedies in Patent Litigation: Three (Increasingly Immodest) Proposals
Abstract: TABLE OF CONTENTS INTRODUCTION I. INJUNCTIONS AND STANDARD-ESSENTIAL PATENTS II. AWARDS OF PROFITS IN DESIGN PATENT CASES III. JURIES AND REASONABLE ROYALTIES CONCLUSION Introduction Notwithstanding the passage of the America Invents Act in 2011, (1) and nearly a decade's worth of Supreme Court and Federal Circuit cases that have cut back on some of the latter court's earlier, more expansive, interpretations of rights, (2) criticism of the U.S. system only seems to intensify with every passing year. (3) Much, though hardly all, of the criticism centers on the conduct of assertion entities (PAEs)--otherwise known more pejoratively as patent trolls--those patent-holding entities which, according to Professor Colleen Chien, filed over 60% of all civil actions for U.S. infringement in 2012. (4) Many of these actions involve patents relating to software, business methods, telecommunications, and information technology (IT). (5) Only a small percentage of these lawsuits are believed to involve deliberate copying on the part of accused infringers; most result from independent invention on the part of companies that were, at least initially, unaware of the patents in suit. (6) To be sure, most pending applications are published eighteen months after filing, (7) and all of them become public records once the is granted. (8) Nevertheless, high-tech firms in particular generally ignore patents, (9) due both to the sheer quantities of patents granted and to the opacity with which they are drafted, which sometimes turns the notice function of patents into something of a joke. (10) Not surprisingly, U.S. litigation is also enormously expensive, (11) and the risk of crippling liability ever-present; in 2011 alone, there were six damages verdicts in excess of $100 million. (12) As a result, critics argue that, in many fields of technology, patents no longer serve their intended purpose of providing an incentive to invent and disclose but rather operate as, essentially, a tax on innovation. (13) Anyone who produces--or, in some instances, simply uses--a high-tech product or service automatically becomes an attractive target for litigation. (14) In this environment, calls for further reform of the system have taken many forms, ranging from outright abolition of the system (15) to more targeted efforts directed at matters such as claim drafting and claim construction, disclosure, and prosecution, (16) and further reforms to areas such as patentable subject matter (17) and nonobviousness. (18) others have called for the introduction of new defenses to liability, such as an independent invention defense (19) or a broader experimental use defense; (20) or for tailoring certain aspects of the system, including the term, to the characteristics of different fields of technology. (21) Yet other suggestions go to the issue of enforcement, such as proposals for instituting specialized trial courts (22) or competing appellate courts; (23) or for switching over to some version of the English Rule under which the losing party would be responsible for the winner's attorney's fees in all or most, not just exceptional, cases. (24) My own scholarship has focused to a large extent on remedies and other aspects of enforcement, both in the United States and in other major systems, so it should come as no surprise that the ideas for reform that most readily occur to me tend to center on modifications to this area of law. (25) This essay will argue in favor of three reforms in particular, arranged in order of their likely political feasibility. The first, which has received the most attention thus far and appears to have the best prospect for making its way into mainstream U.S. (if not foreign) practice, is the adoption of a general presumption that a owner's commitment to license assertedly standard-essential patents (SEPs) on fair, reasonable, and nondiscriminatory (FRAND) terms disqualifies the owner from obtaining injunctive relief in any judicial or administrative forum. …
Publication Year: 2013
Publication Date: 2013-12-01
Language: en
Type: article
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Cited By Count: 16
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