Introduction
A patent is a form of intellectual property which grants the patentee exclusive rights, issued by the government, for a specific duration (typically, 20 years), in return for a complete disclosure of the invention. This exclusivity prohibits others from manufacturing, using, selling, or importing the patented product or using the patented process, without the patentee’s permission.
Patent infringement occurs when someone uses, produces, or sells a patented invention without the owner’s consent, often leading to legal battles that can result in significant financial and reputational consequences. Navigating a patent infringement lawsuit can be a daunting task for businesses and individuals alike, as it demands a clear understanding of legal frameworks, potential defenses, and strategic options.
This article provides an introductory guide on handling such lawsuits, including an overview of what constitutes patent infringement, available remedies, and key actions to take when faced with such claims.
Patent Infringement
The Indian Patents Act does not explicitly list actions that constitute patent infringement. However, Section 48 of the Act specifies the rights of the patentee to prevent others from making, importing, using, or selling a patented invention, product, or process. Therefore, a patent is considered infringed when these rights are violated.
Patent infringement is defined as the unauthorized use of a patented invention. If an industry or organization is found to be infringing, it would be stopped from carrying out infringing activities and may even be required to pay substantial compensation to the patent holder.
As per the general litigation trends, the following actions are considered acts of infringement:
- Colorable imitation of the invention,
- Use of mechanical equivalents,
- Inclusion of essential features of the patented invention,
- Insignificant modifications to the invention.
What is not Infringement
Sections 47, 49, and 107A of the Act outline specific activities that are not considered infringement, as follows:
- Use for Experimental Purposes: The use of a patented invention for experimental purposes related to research, development, or testing does not constitute infringement.
- Use by Government or Authorized Person: The government or any person authorized by the government can use a patented invention without the patentee’s permission, typically for public health, safety, or security reasons.
- Non-Commercial Use: If a patented invention is used for non-commercial purposes, such as for private use or research, it is not considered infringement.
- Use for Teaching or Education: Acts done for teaching, educational, or research purposes, especially when the use does not extend beyond those activities, do not infringe patents.
- Parallel Importation: The importation of patented products that were legally sold in another country does not constitute an infringement.
Remedies for Infringement
Section 108 of the Act states the reliefs in a suit for infringement, as follows:
- Injunction: A court may issue an injunction to prevent the infringer from continuing the infringing activities. This can be a permanent or temporary (interim) injunction.
- Damages or Account of Profits: The patentee can claim damages for the losses suffered due to infringement. Alternatively, the court may order an account of profits, which means the infringer must pay the profits made from using the patented invention.
- Seizure and Destruction of Infringing Goods: The court may order the seizure or destruction of goods that are found to be infringing on the patent.
- Monetary Compensation: The patentee may be entitled to compensation for any financial loss suffered due to the infringement. The compensation can be awarded based on actual damages or the infringer’s profits derived from the unauthorized use of the patent.
- Royalties: In some cases, the infringer may be ordered to pay royalties to the patent holder for unauthorized use of the patented invention.
Recent Noteworthy Judgment – Lava International Limited vs. Telefonaktiebolaget LM Ericsson
One of the most high-profile cases of 2024, in which the Delhi High Court awarded the highest-ever damages in an Indian patent infringement suit, amounting to INR 2.44 billion, along with interest at 5% per annum from the date of the judgment until the full realization of the amount, in favor of Ericsson.
In 2011, Ericsson informed Lava that Lava’s devices were infringing on Ericsson’s Standard Essential Patents (SEPs) and offered to license those patents on Fair, Reasonable and Non-Discriminatory (“FRAND”) terms. However, when negotiations failed, Lava filed a suit in 2015 before the Noida district court, accusing Ericsson of never intending to offer the patents on FRAND terms. The case was later transferred to the Delhi High Court following directions from the Supreme Court. Ericsson proceeded to file a patent infringement suit against Lava for infringing eight of its SEPs. Lava filed a counter claim for invalidating the eight SEPs. An interim injunction was granted against Lava and Lava was directed to deposit a sum of INR 50 Crores with the court, which was later reduced to INR 30 Crores in an appeal before Division Bench of the Delhi High Court.
This suit is significant not only because it involves SEP litigation and addresses FRAND terms, resulting in the highest damages ever awarded, but also because it examines various patent statutes and provides clear interpretations of these laws.
What to do if Served with a Patent Infringement Lawsuit
Facing a patent infringement lawsuit can be overwhelming, particularly for businesses or individuals confronted with potentially severe financial and legal repercussions. Nevertheless, it is crucial to remain composed and follow a systematic approach to evaluate and address the situation.
- Carefully review the lawsuit to understand which specific claims of the patent are alleged to be infringed, and how the plaintiff believes your product or service infringes them.
- Conduct a thorough infringement analysis to determine if the patent claims are indeed being infringed. This includes comparing your product or process with the patent claims to see if they match.
- Assess whether the patent is valid. A patent can be invalidated for reasons such as lack of novelty, obviousness, or non-compliance of the provisions of the Patents Act.
Depending on the findings, there are several possible strategies for responding to a patent infringement lawsuit:
- Defend: If you believe the patent is invalid or that your product does not infringe, you can mount a defense. You may argue that the product does not infringe the patent claims either literally or under the doctrine of equivalents. Alternatively, the grounds for patent revocation provided under Section 64 of the Act can always be used as defense against the suit. Further, laches and estoppel are defenses where a patent holder may be barred from suing due to unreasonable delay or prior statements/ acts narrowing the scope of claims.
- Seek a Declaratory Judgment: You may file a declaratory judgment action in court, seeking a declaration that you are not infringing the patent and that the patent is invalid.
- Negotiate a Settlement: Patent cases can be costly, so parties often attempt to reach a settlement or license agreement. This can involve paying a licensing fee to use the patented technology or agreeing to an out-of-court settlement to resolve the dispute.
- Cross-License: If both parties have valuable patents, sometimes cross-licensing can be negotiated, where both parties agree to use each other’s patents under certain terms.
- Design Around (Non-Infringement by Modification): This defense involves modifying your product so that it no longer infringes the patent. If you can show that you have “designed around” the patented technology (i.e., created a non-infringing alternative), you can avoid liability for infringement.
- Suit against Groundless Threat of Patent Infringement: Section 106 provides for a mechanism to protect the interest of individuals and companies against such baseless threats.
- Challenge Patent Validity: It can be argued that the patent is invalid due to prior art (i.e., similar inventions existing before the patent was granted) or that it does not meet the criteria of novelty, non-obviousness, and utility.
Conclusion
The specific defense in a patent infringement suit one should opt for depends on the facts of the case and the nature of the patent. A detailed analysis of the patent, the accused product, and any prior art will be necessary to identify the strongest defenses.
To avoid patent infringement, it is critical that at the product development stage, one should conduct a search for similar patent and review the competitor’s products so that one can avoid infringing upon the others patent.