Patently aware Featured

5:23am EDT July 31, 2006
Patents play a crucial role in the business landscape. By providing protection to inventors, patent laws foster innovation. But excessive patenting can stifle competition. Whether for good or ill, the growing importance of patents makes it essential for businesses to be on guard for potential patent disputes and the litigation that may result from them.

Since first adopted by Congress in 1790, patent laws have changed tremendously. “Many people are amazed to find out how broad the scope of patentable subject matter has become,” says William O’Brien, a partner with Alschuler Grossman Stein & Kahan LLP.

Smart Business spoke with O’Brien about what can be patented, steps a business should take if they have a patent infringed upon, and what they should do if they are accused of infringing a patent.

What elements of a business are eligible for patent protection?
Patents can cover anything ranging from a product or a composition of matter to a process. The Supreme Court said in 1980 that a patent can cover ‘anything under the sun that is made by man.’ Since then, there has been a large expansion in patentable subject matter. Many other countries are debating whether to permit patents on software, but in this country that’s now a given, and the battleground has shifted to so-called business-method patents.

Regardless of the subject matter, a patentable invention must meet statutory requirements. These include being new, or novel, and not being obvious from the point of view of a person of ordinary skill in the relevant field of technology.

What steps should a company take if it has a patent that is infringed upon?
If there is any possibility of infringement, it is vital to get good advice right away from qualified patent litigation counsel, before contacting the infringer. Saying the wrong things in communications with an infringer can have severe adverse consequences. So can failure to act promptly. For example, delay can prevent you from obtaining a preliminary injunction to stop the infringement while awaiting trial. On the other hand, a premature accusatory letter may create the opportunity for the accused infringer to bring suit in its own local court, which may be far away and otherwise undesirable.

How should a company proceed if it is accused of infringing a patent or asked to pay royalties by a patent owner?
Legally, any company, once it is on notice that it could be infringing a patent, has a duty to appropriately investigate. This applies regardless of whether you receive a threatening cease-and-desist letter or a much nicer letter asking your company to take a patent license. You need to contact counsel immediately, even if the letter is a shotgun mailing to your whole industry and even if your company is supposed to be indemnified by a supplier.

If your company receives many patent notices, then you should work with your counsel to set up an organized system for dealing with them. You don’t have to go to the trouble and expense of getting a formal written opinion of counsel every time, but you do have to be prepared to defend the good faith of your actions. And if there is a strong infringement claim against your company, you’ll want to start working on a solution right away.

From a legal perspective, what are some common disputes that arise in regard to patents?People are surprised at how often the question of infringement depends on how the court interprets words and phrases used in the patent. The court’s interpretation often determines whether or not the patent will be found to be infringed. Other issues often include whether someone else previously invented the same subject matter <m> making the patent invalid <m> and whether the invention was obvious to practitioners in the relevant field, which also would invalidate the patent. Understandably, most jurors find it hard to make decisions about what would be obvious to a skilled engineer. Much of the skill in trying patent cases consists of making highly technical issues clear and meaningful to a jury.

What types of qualities should a company look for when selecting a patent attorney?
The answer depends on whether the company is looking for someone to write a patent application or looking for someone to handle a lawsuit. A lawyer who specializes in applying for patents and dealing with patent examiners is unlikely to be equally skilled in trying cases and persuading jurors. For a lawsuit, you need a trial lawyer. At the same time, it’s important to understand that, for a patent case, not just any trial lawyer will do. Patent litigation is one of the most complex fields of law, full of gray areas where you can’t get clear answers out of a book.

WILLIAM O’BRIEN is a partner with Alschuler Grossman Stein & Kahan LLP. Reach him at (310) 255-9033 or wobrien@agsk.com.