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The Obama administration has released a memo to Congress outlining several measures that would help curtail “patent trolling.”   The White House had no qualms about using the colloquial term “patent troll” to describe entities that – rather than researching or developing technology relative to their rights — acquire patents solely to extract payments from alleged infringers. 

The suggested reforms are aimed at increasing transparency and providing defendants “better legal protection against liability.”   A few recommendations worth noting include (1) requiring parties to disclose the “real-party-in-interest” in lawsuits and demand letters; (2) encouraging the publication of demand letters to make them accessible to the public; (3) protecting end users using “off-the-shelf” products; and (4) make it easier for a prevailing defendant to obtain an award of attorneys’ fees in a patent infringement action.   The memo also recommends facilitating challenges to business method patents and restricting the circumstances under which the International Trade Commission (ITC) can issue injunctions.  

While it remains to be seen what legislative action will follow, the administration has – for the time being – approved the creation of a US Patent and Trademark Office (PTO) website informing patent troll victims about their rights and defenses.  For more information click here.

Supreme Court Reverses Federal Circuit’s Burden of Proof Rule for Patent Infringement

The Supreme Court today ruled unanimously that the burden of proving patent infringement rests with the patent holder, even in cases where the parties had agreed upon a licensing deal in the past.  

The case at issue, Medtronic, Inc. v. Mirowski Family Ventures, involved implantable heart stimulation devices (pacemakers) which were licensed by Mirowski to Medtronic in 1991. In late 2007, Medtronic filed an action with the U.S. District Court of Delaware seeking declaratory relief that its new line of devices did not infringe upon the Mirowski patents.  The trial court entered a judgment of non-infringement in Medtronic’s favor, which was reversed in 2012 by the Federal Circuit, based on a holding that the trial court did not properly allocate the burden of proof in the initial proceedings.

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Federal Circuit Rules Laches Can Limit Patent Damages

The equitable defense of laches can apply to claims of patent infringement damages suits, even when they are filed within the six year statutory period as defined by 35 U.S.C. §286, ruled the en banc Federal Circuit in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC., Fed Cir., No. 2013-1564 (Sept. 18 2015).  In this narrow 6-5 decision, the court sitting en banc affirmed its earlier summary judgment, which dismissed SCA’s patent infringement suit for laches, from September of last year.

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Patent Owners Can Recover Lost Foreign Profits

Following our previous report, the U.S. Supreme Court held in WesternGeco LLC v. ION Geophysical Corp. that WesternGeco, the patent owner, can recover lost foreign profits as a result of ION’s infringement under §271(f)(2) of the Patent Act. WesternGeco LLC v. Ion Geophysical Corp., U.S., No. 16-1011, 6/22/18.  Justice Thomas delivered the majority opinion in the 7-2 decision.

Over ION’s objection that the lost-profit damages occurred outside of the United States and the foreign conduct after ION’s infringement was necessary to give rise to the infringement, Justice Thomas wrote that awarding lost-profit damages under the circumstances was a domestic application, and therefore, consistent with the presumption against extraterritoriality that presumes federal statutes apply within the U.S.

16-1011 WesternGeco LLC v. ION Geophysical Corp. (06/22/2018)