Patent Infringement and Defences

Introduction to Patent Infringement

Patent protection gives rights to a patent holder to prevent third parties from making, using, selling, offering for sale and even importing the patented product or the product made by using patented process in the respective jurisdiction. Patent infringement means the violation of the exclusive rights of the patent holder. As discussed earlier, patent rights are the exclusive rights granted by the Government to an inventor over his invention for a limited period of time. In other words, if any person exercises the exclusive rights of the patent holder without the patent owner’s authorization then that person is liable for patent infringement. Sections 104-114 of the Patents Act, 1970 provide guidelines relating to patent infringement.

Patents law does not specify as to what would constitute infringement of a patented product or process. However, the following acts when committed without the consent of the patentee shall amount to infringement: –

(i) making, using, offering for sale, selling, importing the patented product;
(ii) using the patented process, or using, offering for sale, selling or importing the product directlyobtained by that process.

What is Patent Infringement?

Meaning of Patent Infringement: – Patent Infringement occurs when a patentee’s right to an invention is violated. A patent is an invention based legal document that defines and provides the bearer with exclusive rights to exclude others from producing, selling, or distributing such invention. The violation of these exclusive rights of the patent holder is known as patent infringement.

When a third party violates the patent holder’s rights or the claims in the patent without the patent holder’s consent or licence, such third party is said to have infringed the patent holder’s patent rights. To make sure that the invention won’t likely violate any of the already-existing patent rights, it’s important to understand the many sorts of patent infringements while performing a risk analysis for patent infringement.

What are the Types of Patents Infringement?

The Types of Patents Infringement are as follows: –

Direct Infringement: – The most obvious and common type of infringement is direct infringement. Direct infringement is the most obvious and the most common form of patent infringement. Direct patent infringement occurs when a product that is substantially close to a patented product or inventionis marketed, sold, or used commercially without permission from the owner of the patented product or invention. The marketing, sale, or commercial use of a similar patented item or invention that performs substantially identical functions is considered an infringement. When someone directly violates your patent rights, this is referred to as direct infringement. This means that they manufacture, use, sell, offer to sell, or import your patented invention.
As any patent attorney will tell you, this is the most obvious form of unauthorized use. This includes producing, using, selling (or attempting to sell) or importing a protected idea or invention without obtaining authorization from the rightful owner. Direct infringement means that the unauthorized version either performs the same function as the original or meets the description of the original.
1. Literal: – Literal infringement occurs when the accused product/process falls within the scope of patent claims. Literal infringement occurs when a device or process literally meets every limitation in a patent claim. If even one component is different, it cannot be considered literal infringement. One such case is Polaroid Corp vs. Eastman Kodak Co., in which Eastman Kodak’s patent infringement of Polaroid’s “Instant camera technology” was considered a case of literal infringement;
2. Doctrine of Equivalence: – Non-literal infringement is another term for it. Infringement occurs when a component or device performs the same function to achieve similar or identical results. This infringement gives a patentee additional and equitable protection for their patents.
  Under the “all elements” rule, the doctrine of equivalents must be applied to each individual element of a claim, not to the invention as a whole. It is necessary to show that every element of the patented invention, or its substantial equivalent, is present in the accused product or process.
  During a recent Indian case, Ravi Kamal Bali vs. Kala Tech 8, the doctrine was adopted into the Indian legal system. In that case, the defendants were accused of infringing on a patent for a tamper-proof lock/seal for containers. The defence was that the product differed in material particulars from the patented product, but the court ruled that the differences were insignificant and thus applied the doctrine.

Indirect Infringement: – Indirect infringement occurs when an infringement occurs but is made possible by someone else. There are actually two types of indirect infringement. One is contributory infringement, which refers to the purchasing or importing of materials that are intended to be used as part of a patented item. To defend your patent in this type of case, you would need to prove that those materials were intended to be used only as part of your protected patent. The other type of indirect infringement is called infringement by inducement, which refers to any activity performed by a third party that causes someone to directly infringe on a patent. In other words, one individual or organization would need to convince another individual or organization to take part in behaviours that lead to infringement on the original patent. Even if one of those parties is not aware of the original patent, they can still be found responsible.
There are two kinds of indirect infringements: –
1. Induced Infringement: – Induced infringement occurs when one actively encourages, assists, aids, induces or influences another person to commit acts of infringement or to infringe on a patent. In most cases, patent infringement by inducement means that the inducer willingly and knowingly assisted in the infringement but may or may not have specifically intended to violate a patent. For example, the person might provide someone with instructions for creating the patented invention;
2. Contributory Infringement: – Contributory infringement occurs when one party intentionally participates/assists in an act of infringement to the other party, making them vicariously liable for the infringer’s actions. A person commits contributory infringement when they supply components of a patented invention knowing that the components will be used to infringe a patent. It is a type of indirect infringement in which a person or corporation is held liable even if they did not actively participate in infringing activities. As a result, it occurs when a party sells a product that they are aware is used in the infringing product. Typically, this product will have no commercial value as a result of its use in the infringing product.

Wilful Infringement: – It is another type of infringement, Wilful infringement or active inducement of infringement occurs when it is done intentionally and with knowledge of the patent. Copying an invention is evidence of wilfulness if it continues after the existence of the patent is made known. In the case of willful infringement, a court can triple the amount of damages that it would normally award to a patent holder.

Legislations Governing Patent Infringement

The major enactment governing patent infringements in India is the Patents Act, 1970 which was implemented in 1972. It made pharmaceutical product innovations, as well as those for food and agro-chemicals, un-patentable in India. It allowed for copying and marketing of the innovations in India which were patented elsewhere in the world. This act also imposed restrictions on the import of finished formula and introduced strict price control regulations. However, this act proved detrimental to foreign investments in the country since it did not benefit the big foreign multinational corporations and was not in consonance with the global patent system.

In 1992, India became a member of the WTO and therefore, it became important to amend the existing law in order to meet the requirements of the TRIPS agreement. In order to comply with the TRIPS agreement, the introduction of Exclusive Marketing Rights and the mailbox system was important. Under the EMR, exclusive rights would be provided to a foreign company to market a pharmaceutical and agricultural product in the Indian market for a specified period of 5 years. The mailbox system would be the one that would receive all applications for the grant of patents of pharmaceutical and agricultural products. In order to implement these provisions in the Patents Act, 1970, amendments to the Act were introduced in 1999, 2001, 2001, and 2005.

However, these provisions were not adequate to bring the Indian Patents Act in conformity with the Global Patents Act. Therefore, a major amendment was passed in the year 2005 known as the Patents Amendment act. Following are the major provisions of the amendment act.

Product Patent

This amendment provided for product patent protection in contrast to the earlier provision of the Act that provided for only the process patent protection. Process patent protection meant that only the process used for the manufacture of the product could be patented and not the final product. So, even if the person used a different process other than the one used by the original inventor in order to make the same product, then it would not be considered a violation of the patent.

Compulsory Licensing

This provision was introduced in compliance with the TRIPS agreement. It empowered the government to make available the patented product to the general public for non-commercial use in case of a national emergency by invoking the compulsory license. If the patented product is not available at an affordable price to the general public, even then the government can invoke compulsory licensing.

Other Provisions

Under this amendment, the patent holder could challenge the license in order to block the general production of his drug. The act also provided for a pre-grant and post-grant opposition clause. Provisions to safeguard national interest against violations of patent laws were also introduced.

Defences Against Infringement of Intellectual Property Laws

A defendant may provide a defence (or defences) in civil actions and criminal prosecutions under common law in an effort to avoid criminal or civil liability. A defendant may raise a defence or make claims against the prosecution or plaintiff in addition to contesting the accuracy of any allegations brought against them in a criminal or civil action and other than that a defendant may also make allegations against the prosecutor or plaintiff or raise a defence, arguing that even if the allegations put up against the defendant are true. The defendant is nevertheless not liable for the same. Likewise, there are few defences in the intellectual property law.

Common Defences to Patent Infringement

Non-Infringement: – It states that the product or process invented is not the same as the patent that is already protected by the laws. The accused party can argue that the patent owner has failed to show that their product or process infringes upon the patent’s claims by poking holes in the patent holder’s infringement analysis, for example, by negating their arguments for literal or equivalent infringement.
Invalidity: – Another way to defend against patent infringement is to argue that the patent claim, which is allegedly being infringed, is invalid because it does not satisfy any of the five patentability requirements discussed above: patentable subject matter, utility, novelty, non-obviousness, and enablement. However, at the litigation stage, there is a presumption of validity of patent claims, so the accused party would need clear and convincing evidence, a higher burden of proof, to successfully show that the patent claim in question is invalid.
Inequitable conduct: – Instead of arguing that a particular patent claim is invalid because it does not satisfy the patentability requirements outlined above, the accused can also argue as a defense that the patent owner engaged in inequitable conduct during the prosecution of the patent application, which will invalidate the whole patent. Because the presumption of validity of a patent applies, the accused would also need to show inequitable conduct using the higher clear and convincing evidence standard.To successfully prove that the patent holder engaged in inequitable conduct the accused needs to show the following elements: –
1. The patent holder deliberately misleads the examiner;
2. The patent holder withheld knowledge of crucial information;
3. There can be no infringement because the patent is invalid;
4. Some sort of honesty guideline was broken.
First Sale Doctrine: – You are reselling an item legally sold to you. This defence is available because patent rights exhaust on a specific item once that item is sold.
Repair Principle: – You are repairing the device by replacing components that are not patented. This defence does not allow you to completely reconstruct an invention.
Patent Abuse: – The following examples are considered patent abuses: –
1. Using it to violate antitrust
2. Using it to Crush the Competition
3. Using it to engage in business practices that are unethical, such as pricing.
Licensing: – The patent holder has granted you permission or rights to use the patent and you have used the invention in compliance with said rights or permission.
Expiration of Patent: – The accused’s supplier upstream has legally purchased the patented invention from either the patent holder or a licensee of the same. Current laws forbid a patent holder from attempting to collect payment from multiple levels of a supply chain for a single patented invention.
Estopel: – There are two forms of Estopel: –
1. File wrapper estoppel: – If the inventor has denied rights or admitted any limitation of rights in his patent application, those denied rights cannot be used as part of a patent infringement case.
2. Equitable estoppel: – The patent holder assures you that there will be no enforcement of the patent. This can be either from failure to make promises or to implement. This means that the accused relied on that belief or assurance in continuing his business practices.
Experimental Use: – Under common law, experimental use defense is only allowed if the accused was using the patented invention for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry. This is a very narrow defense and does not apply when the use is even slightly commercial in nature. You can use a patented invention if it is related to the development of information. You may also use it if it relates to submission of it under federal laws regulating the use, sale and manufacture of drugs.

Patent Infringement Defence

The defendant can prove by showing the data they are not infringing the patent.
The defendant may stop selling or making the infringing product.
The defendant can negotiate a license fee with the patent owner by crossing over your patent portfolio (if the plaintiff is not an NPE).
The defendant may begin with a non-infringement defence to avoid a claim of infringement. The cost of hiring a specialist for non-infringement defence is considered the best of all available options.
The defendant can prove that the patent has been wrongly obtained by the plaintiff. that the subject of that claim is not an invention within the meaning of this Act, or is not patentable under the Act of the Patents Act, 1970.
Inadequate disclosure of the invention or the manner by which it is to be made.
In the case of a patent granted on a Convention application, if the application for a patent was not made within twelve months from the date of the first application for protection for an invention made in a Convention country or India.

Ways to Prevent Patent Infringement

There are various ways to avoid patent infringement some of which are listed below: –

Creation of original products: – Companies can hire staff members who can create original products using their creativity and intellect. However, the company should not forget to add a clause in the contract that the product produced would be the exclusive right of the company so that the staff does not claim its own rights over the invention at a later stage.

Obtaining appropriate licenses from patent holders: – If the companies or corporations plan on using any registered material for further use, then they should seek permission from the patent holder before using it otherwise the company would be made liable for using patented material. Royalty-free material basically refers to the use of online material which can be used without any restrictions. However, in order to avoid any violations of the holder of exclusive rights over such material, it is best suited that due credit is given to the holder of such rights.

Conclusion

Intellectual property is an important asset and must be protected. Patent infringement is violation of a patentee’s rights and different types of infringements have to be defended differently. Sometimes it is critical to understand the scope and meaning of the claims in the patent, because those will establish the protection an invention receives under the law. If the patent is threatened by infringement, an effective defence will protect the property rights and business operations. The infringement objects could be either “any product to be used exclusively for the producing of the patented product” or “indispensable object for the resolution of the problem by the invention”. Therefore, a patentee must be aware of the types and defences of the infringements.