Infringement : pneumatic vs. acoustic

[RIJID]

What is the name of your state? Canada

I am being pursued by a patent holder who believes my invention, which is also patented, infringes or "reads onto" his patent. I'm sure you've encountered this problem before...

The invention in question is a vent that is for a specific application. My vent is pneumatic in nature and deals specifically with the control of air pressure and movement into and out of an enclosed chamber. The other patent is acoustic in nature and is design to modulate sound that escapes from an enclosed chamber.

My device does NOT provide any acoustic change or have any acoustic benefit. His claims specifically state "acoustic" venting and the device was designed to modulate sound, not air flow. Part of the question I guess, is sound the same as air?

The challenging party has a lot of $$$$, I do not.

My question is this - if I get an infringement analysis and it concurs with my opinion that I am not infringing, plus scientific data to support non-infringement - would the cost to the individual be sufficient to make him think twice about further action? What would the cost of his next actions be and what could they be?

Also, what would be the steps involved if he did and by this I mean

1. I get a C&D letter
2. I provide my infringement analysis / data that finds I am not infringing.
3. Other party...

Also, something to consider...I am in Canada with a US patent, other is in the US with a US patent.

Any FREE help is appreciated. I know how to pay an attorney - I've got 2 and neither can seem to find their ass with both hands and a flashlight unless it's a check they are looking for. I'm looking for something else here - answers.

Bottom line - this guy is playing alpha male and has the $$$ to crush a small company like mine with litigation costs. He boasts about all of the others he has "handed their heads to". I'd like to take old Goliath on, but not at the risk of losing my company or spending a small fortune.

Thanks in advance for any advice.

 

[divgradcurl]

First question -- are you importing your product into the U.S., or otherwise selling your product in the U.S.? If you don't import into the U.S., or sell in the U.S.,, you may not be infringing anyway. Further, there is the broader jurisdictional question -- how do the U.S. courts have jurisdiction?

I am not sure what you are asking here. You can certainly get a non-infringement opinion, but you have to understand that such an opinion is not a "silver bullet." If the opinion is good -- with solid legal and factual support -- that may be enough to convince the other guy to back down. You never know. However, there are certainly no guarantees. The scope of a patent is dependent on how the claim terms themselves are interpreted -- understanding the true scope of a claim requires a detailed analysis of the patent, its prosecution history, and an understanding of the "ordinary skill in the art" at the time the patent was issued. Further, there is another theory, that of "doctrine of equivalents," which can, in some case, broaden the scope of the claims even further.

In other words, it's not always a simple answer. And, as you yourself believe, even in the face of evidence to the contrary, if he wants to come after you, he could no matter what sort of evidence or opinion you provide.

Patent cases are notoriously expensive, because they typically are long and drawn-out, and require expert testimony. If a case were to go to trial, even a simple patent case could cost hundreds of thousands of dollars -- more likely a million or more. That said, very few patent cases ever go to trial -- more than 95% of cases filed do not receive a verdict (i.e., they settle out at some point, or are resolved at the pre-trial stage).

 

[divgradcurl]

Also, the fact that you have a patent on your invention does NOT mean that you are not infringing another's patent. Such evidence may limit the scope of infringement under the doctrine of equivalents, but having your own patent does not automatically mean you are safe.

 

[FlyingRon]

As an engineer, I can tell you that there is no acoustic transmission through air and pneumatics are very close concepts.

 

[RIJID]

First, thanks for the answers.

Yes, I am selling my product worldwide, but my patent is in the US only. The other guy has applied worldwide. I do understand that patents are exclusive in nature.

I understand that an analysis is just an opinion and that the value in this is that should I get sued the damages will not be treble damages as the infringement is not wilful.

So, more questions.

-Is there any onus upon the other party to provide any sort of data / documentation to support HIS opinion that I am infringing? Or can you just go around intimidating people with lawsuits just because you can or because you think someone is infringing?

-What would be the other parties next step and what would that cost? I expect there would be a cease and desist and possible an injunction. I'm not too worried about those steps as I can spend enough to deal with those, but what happens after that?

Another thing I would like to say to everyone. I'm an honest businessman. If I thought I was infringing I would readily license or stop using my invention. I just do not believe I am infringing.

 

[divgradcurl]

-Is there any onus upon the other party to provide any sort of data / documentation to support HIS opinion that I am infringing? Or can you just go around intimidating people with lawsuits just because you can or because you think someone is infringing?

No, there is no need to provide proof or evidence at this point. Oftentimes a patent holder WILL provide proof, because it may lead to a licensing discussion if they have good evidence.

So, yes, a patent holder can go around threatening lawsuits -- but that, in turn, opens them up to a lawsuit from an accused infringer for declaratory judgment of noninfringement -- in other words, you could sue him, asking a court to declare that there is no infringement. This has the advantage (to you) of being able to choose the court in which to sue, and to choose the timing of the suit -- and it makes you the plaintiff, which can have advantages if you do end up at trial.

You really should be talking to a U.S. patent lawyer if you are interested in pursuing this path, or if you are concerned that they will file suit against you.

-What would be the other parties next step and what would that cost? I expect there would be a cease and desist and possible an injunction. I'm not too worried about those steps as I can spend enough to deal with those, but what happens after that?

I assume no suit has been filed. The other party could send out a cease-and-desist letter, or could otherwise enter into a licensing discussion. The other party needs to be careful, though, because doing so can open them up to declaratory judgment jurisdiction, as discussed above.

There will be no injunctions until -- and if -- a lawsuit is actually filed. Only a court can order an injunction. A preliminary injunction can sometimes be sought relatively early in the case, but these injunctions are usually pretty hard to get. A permanent injunction can only be obtained after a trial on the merits or summary adjudication.

So, the time is: maybe a cease-and-desist letter. If they do go this route, you need to decide if a) the letter is sufficiently threatening to create declaratory judgment jurisdiction, and b) if it is, do you want to take this on. If you do get a letter, you could enter into negotiations with the other party. Actually, you can negotiate without the letter. If you think you have a good enough noninfringement position (or can show that there is evidence that the patent is invalid), maybe you can force a settlement (license) on good terms. This is very likely the cheapest way to go.

If you can't reach an agreement, either he will have to sue you, or you will have to sue him (declaratory judgment), or he will have to let it go. Once a suit is filed, you are in a lawsuit, and the costs start spiralling up dramatically.

Another possibility, alluded to above, is trying to get the patent invalidated. You can do this at trial, but if you have (or come across) good prior art that wasn't cited in the patent, you can file for a reexamination, asking the USPTO to take another look at the patent in light of the new prior art. If you have good prior art, the mere threat of a reexam may be enough to force a settlement, without having to go through a reexam. Again, talk with an attorney who has experience in patent litigation.

 

[RIJID]

divgrascurl - thank you so much for this info - it is very helpful.

If you would I have one more question for you regarding prior art.

1 year before the US inventor (let's call him Party A) applied for a patent, another inventor (call him Party B) - in Croatia - applied for a patent in that country. Party A and Party B's invention designs are virtually IDENTICAL. There is no proof of any relationship between these two inventors.

Party B then entered into an "arrangement" with an American company (Party C) with a view to having C make and sell the invention.

B sent a working prototype to C. There was no discussion about disclosure or confidentiality.

C never responded and B dropped his patent app in Croatia because he figured C wasn't interested (his mistake).

Subsequently C then showed the prototype to a number of people working or skilled in the art including myself...AND PARTY A!.

6 months later Party A filed his patent on the identical invention. Party A admits that they saw the prototype. I asked Party A why they had not cited Party B's prototype in his application and his response was that "it hadn't entered the chain of commerce".

Interesting note : Party A licensed his invention to C and C is now producing the item. Go figure.

QUESTIONS:

Does the prototype that arrived in the US 6 months before Party A filed represent or qualify the prototype as prior art?

I find it hard to believe that someone can just come across and idea that already exists and by virtue of the fact that they were first to file can gain the exclusive rights to that invention.



I'd love to hear your answer!

 

[divgradcurl]

Does the prototype that arrived in the US 6 months before Party A filed represent or qualify the prototype as prior art?

The answer is "maybe."

The answer will turn on whether the disclosure to one or two individuals was sufficient to be "public" disclosure.

The other issue is the timing. If the patent holder can prove that he conceived the invention BEFORE he saw the prototype, he may be able to "swear behind" the reference, and thus prove earlier inventorship.

However, if he did see the prototype prior to his filing, and you can PROVE it to a clear and convincing standard (higher than preponderance of the evidence, lower than beyond a reasonable doubt) then you might be able to show inequitable conduct, which would invalidate the patent.

But these are all just supposition based on the limited facts you have provided here. For all we know, the patent as issued may be patentably distinct from the prototype anyway. You really need to sit down with a patent attorney, who can reivew ALL of the relevant facts and advise you accordingly.

I find it hard to believe that someone can just come across and idea that already exists and by virtue of the fact that they were first to file can gain the exclusive rights to that invention.

This is not supposed to happen in most cases, the patent is supposed to go to the first person to "invent" something -- but even that statement is tempered by the limitation that if someone conceals, hides, or abandons their invention, a later "inventor" may be entitled to a patent on the same invention.

 

[RIJID]

No, there is no need to provide proof or evidence at this point. Oftentimes a patent holder WILL provide proof, because it may lead to a licensing discussion if they have good evidence.

So, yes, a patent holder can go around threatening lawsuits -- but that, in turn, opens them up to a lawsuit from an accused infringer for declaratory judgment of noninfringement -- in other words, you could sue him, asking a court to declare that there is no infringement. This has the advantage (to you) of being able to choose the court in which to sue, and to choose the timing of the suit -- and it makes you the plaintiff, which can have advantages if you do end up at trial.

You really should be talking to a U.S. patent lawyer if you are interested in pursuing this path, or if you are concerned that they will file suit against you.



I assume no suit has been filed. The other party could send out a cease-and-desist letter, or could otherwise enter into a licensing discussion. The other party needs to be careful, though, because doing so can open them up to declaratory judgment jurisdiction, as discussed above.

There will be no injunctions until -- and if -- a lawsuit is actually filed. Only a court can order an injunction. A preliminary injunction can sometimes be sought relatively early in the case, but these injunctions are usually pretty hard to get. A permanent injunction can only be obtained after a trial on the merits or summary adjudication.

So, the time is: maybe a cease-and-desist letter. If they do go this route, you need to decide if a) the letter is sufficiently threatening to create declaratory judgment jurisdiction, and b) if it is, do you want to take this on. If you do get a letter, you could enter into negotiations with the other party. Actually, you can negotiate without the letter. If you think you have a good enough noninfringement position (or can show that there is evidence that the patent is invalid), maybe you can force a settlement (license) on good terms. This is very likely the cheapest way to go.

If you can't reach an agreement, either he will have to sue you, or you will have to sue him (declaratory judgment), or he will have to let it go. Once a suit is filed, you are in a lawsuit, and the costs start spiralling up dramatically.

Another possibility, alluded to above, is trying to get the patent invalidated. You can do this at trial, but if you have (or come across) good prior art that wasn't cited in the patent, you can file for a reexamination, asking the USPTO to take another look at the patent in light of the new prior art. If you have good prior art, the mere threat of a reexam may be enough to force a settlement, without having to go through a reexam. Again, talk with an attorney who has experience in patent litigation.

Well, it's funny and not so funny. I have received more useful information HERE in the past 48 hours than I have from the 2 guys I pay to provide me with this sort of information.

 

[divgradcurl]

Well, it's funny and not so funny. I have received more useful information HERE in the past 48 hours than I have from the 2 guys I pay to provide me with this sort of information.

Maybe you need new guys!

Seriously, though, are the lawyers you are working with experienced patent litigators? While to some extent litigation is litigation, there are some pretty specific issues that one faces in a patent lawsuit, many of which might not be obvious to someone without specific patent ligitation experience.

It might be worthwhile to try and shop around for a patent litigation shop or lawyer with experience that can provide more substantive answers to your questions.

Also, not to stand up for your lawyers or anything, but my answers are based solely on the facts that you are providing, there may be other facts or issues that I am not aware of (in fact, it's certain that there are!), so maybe your lawyers are providing answers based on more facts than I am privy to.

But in ANY case -- patent or otherwise -- if you feel your lawyer isn't giving you enough information, talk to another lawyer.

 

[RIJID]

My primary attorney is the one who deals with filing the patents, so litigation is probably not his field of expertise. Still, one might reasonable expect that said lawyer might stand down and suggest alternatives or perhaps a patent / IP litigation lawyer - as YOU just did. No need to be an apologist for these guys - they have all the information and more. When they wrote my patent they referenced the other patent - they are well aware of everything. Still, your suggestion is one I had never heard of and that info has proven to be very valuable.

My plan is to listen to this fellows offer as far as licensing. If it is a royalty free or a nominal fee, I'll go that route, but if not - given his strong arm tactics - I'm more inclined to think that the best defense is a good offense. In the face of some scientific evidence and a sound legal opinion that supports non-infringement, I'm inclined to take the path you mention and have him come to me as the plaintiff - and I do believe I am in a very good position to do that.

I'll keep you posted.

After pressing my attorney, he suggested a litigation attorney who may take the case on contingency. I'm not sure how contingency would work in such a case but it sounds like a viable option and - if there is such a thing in IP law, justice may be served.

 

[RIJID]

The answer is "maybe."

The answer will turn on whether the disclosure to one or two individuals was sufficient to be "public" disclosure.

And who would make that designation?

The other issue is the timing. If the patent holder can prove that he conceived the invention BEFORE he saw the prototype, he may be able to "swear behind" the reference, and thus prove earlier inventorship.

I'm certain he would. He has a lot to loose.

However, if he did see the prototype prior to his filing, and you can PROVE it to a clear and convincing standard (higher than preponderance of the evidence, lower than beyond a reasonable doubt) then you might be able to show inequitable conduct, which would invalidate the patent.

I only know that he DID see it - by his own admission. I just don't know when. If he saw it before he filed he should have mentioned it and if he saw it after he filed he should have mentioned it. I am under the understanding that as an inventor you are legally obligated to report anything that may constitute prior art to the USPTO. I know this because I have had to abandon a patent due to prior art.

But these are all just supposition based on the limited facts you have provided here. For all we know, the patent as issued may be patentably distinct from the prototype anyway.

Well, maybe. But I think that would be a real reach in this case. I haven't been able to find anything that would distinguish one from the other.

You really need to sit down with a patent attorney, who can reivew ALL of the relevant facts and advise you accordingly.

First I need to find a patent attorney who can give me the answers I need.

This is not supposed to happen in most cases, the patent is supposed to go to the first person to "invent" something -- but even that statement is tempered by the limitation that if someone conceals, hides, or abandons their invention, a later "inventor" may be entitled to a patent on the same invention.

That doesn't really qualify them as an inventor does it? I can think of better descriptions.

Let me know if you would like to see images of the two inventions - just for curiousity.

 

[RIJID]

Did some research, have a further question.

DJ obviously provides a huge advantage to me - and may in fact make all the difference in my ability to defend my company and my invention. From what I understand, I have to file a DJ suit before the other party files an infringement suit in order to keep home field advantage. If they file first, I have to go to their jurisdiction. If I file first, they come here.

QUESTIONS:

At what point do I loose the abililty to file a DJ?

What would you cite as my "trigger"?

The other party has already made more than sufficient verbal threats, but I would think a CD would be better. However, can the other party skip the CD and avert a possible DJ by filing suit without warning?

Is it advisable that any further negotiations - say by phone - take place with a witness present?

 

[divgradcurl]

And who would make that designation?

Either the USPTO (if a reexam was filed) and/or the court. This is a determination based on the provable facts viewed in light of current caselaw.

I only know that he DID see it - by his own admission. I just don't know when. If he saw it before he filed he should have mentioned it and if he saw it after he filed he should have mentioned it. I am under the understanding that as an inventor you are legally obligated to report anything that may constitute prior art to the USPTO. I know this because I have had to abandon a patent due to prior art.

That's true, you do have that obligation -- that's why I brought up inequitable conduct. However, because inequitable conduct is really a fraud allegation, it has to be "plead with particularity" -- in other words, you have to lay out the factual basis for your allegation in you complaint or countercomplaint, and it has to be proven to a "clear and convincing" standard. If all you have is your hearing him make a verbal representation, that standard of proof will be very hard to meet unless you can get him to admit to it on the record, in a deposition or in open court.

That doesn't really qualify them as an inventor does it? I can think of better descriptions.

Well, if they invented it independently -- even if later -- then I would argue that the later inventor is still an inventor. But if someone sees a prototype, and then patents it -- probably not an inventor. But there is a reason why a patent might be granted in the latter case anyway. A patent is essentially a bargain between the government and the inventor -- the government grants the inventor a monopoly for a limited time, in return for the public disclosure of the invention. The government would rather have an invention publicly disclosed and grant a patent even to a "second" inventor rather than have a first inventor simply keep the invention secret. In other words, the public disclosure is more important to the public as a whole that whether or not the "inventor" is really the first inventor or not.

This only happens in a relatively low number of situations, so normally it IS the first inventor who gets the patent. But there is a reason -- although you can argue whether or not it is a GOOD reason -- for why it is done this way.

Let me know if you would like to see images of the two inventions - just for curiousity.

Not really interested, but thanks for the offer!

 

[divgradcurl]

Did some research, have a further question.

DJ obviously provides a huge advantage to me - and may in fact make all the difference in my ability to defend my company and my invention. From what I understand, I have to file a DJ suit before the other party files an infringement suit in order to keep home field advantage. If they file first, I have to go to their jurisdiction. If I file first, they come here.

DJ does give you some benefits -- it may get you into a more favorable jurisdiction, and it allows you to control the timing of when the case starts.

QUESTIONS:

At what point do I loose the abililty to file a DJ?

Once DJ jurisdiction accrues, it is lost once the other side files a complaint, or once the threat of litigation goes away (such as entering into a licensing agreement or other binding settlement, expiration of the patents, invalidating of the patents, etc.).

What would you cite as my "trigger"?

I don't know. What can you prove? If you file a DJ action, the first thing the other side will do (if they are smart) is file a motion to dismiss for lack of subject matter jurisdiction, claiming that the court doesn't have DJ jurisdiction. The level of threat for DJ jurisdiction has been relaxed recently, see Sandisk v ST Microelectronics, a summary of which is here: http://www.fedcirc.us/case-reviews/sandisk-corporation-v.-stmicroelectronics.html -- but there still is a requirement for proof of the three factors in the new test:

“where a patentee asserts rights under a patent based on certain identified ongoing or planned activity of another party, and where that party contends that it has the right to engage in the accused activity without license, an Article III case or controversy will arise and the party need not risk a suit for infringement by engaging in the identified activity before seeking a declaration of its legal rights.”

So, you need to prove:

1) an assertion of patent rights

2) based on identified ongoing or planned activity; and

3) a contention of the right to engage in the accused activity without a license.

If you can PROVE these three things, you should be able to prove that the court has DJ jurisdiction. But you need some sort of evidence to back up your assertions.

The other party has already made more than sufficient verbal threats, but I would think a CD would be better. However, can the other party skip the CD and avert a possible DJ by filing suit without warning?

Verbal stuff is pretty hard to prove without any other evidence.

There is no requirement that a patent holder enter into license negotiations or send a cease and desist letter before filing suit. In fact, in some cases, a patent holder might FILE suit (but not SERVE the complaint on the defendant), THEN send a C&D letter, so as to avoid DJ jurisdiction.

This doesn't always word, and it can be hazardous in some cases, but it can happen this way. Unlikely, but it can happen.

Is it advisable that any further negotiations - say by phone - take place with a witness present?

Ideally, you would have a witness AND your lawyer present. And you would follow up with something written to try and create a paper trail.