My patent expired? Can I still sue for patent infringement?

Introduction

There are situations when a patent owner contemplates filing a patent infringement lawsuit after the patent expires. Is it too late to sue? Maybe not. The particular facts will have to be weighed against the legal doctrines of laches and equitable estoppel and against the statute of limitations applicable to patent infringement claims.

Discussion

As known, in the United States, design patents expire 15 years after grant and utility patents expire 20 years after the effective filing data (i.e., the earliest of the actual filing date of the patent application and the earliest priority date claimed).

Let’s say that a patent expired 4 years ago. Is it too late to sue now? And if not, would it be worth it? Well, since the patent is now expired, an injunction and forward damages (i.e., for infringement occurring after the filing date of the infringement lawsuit) are not available. What about backward/pre-suit damages? Before March 21, 2017, the defense of laches asserted by the patent infringer may have derailed the effort to collect pre-suit damages, if the defendant could show that the patent owner unreasonably delayed enforcing its patent rights while the defendant continued to invest in the accused product, and, allowing patent enforcement now would prejudice the defendant.

That is not true anymore. That is according to the Supreme Court’s decision in SCA v. First Quality (SCA HYGIENE PRODUCTS AKTIEBOLAG ET AL. v. FIRST QUALITY BABY PRODUCTS, LLC, ET AL.) issued on March 21, 2017. A link to the entire court opinion is provided at the end of this blog.

In SCA, the Court held that “[l]aches cannot be interposed as a defense against damages where the infringement occurred within the period prescribed by §286.” The period prescribed by §286 is 6 years (35 U.S. Code § 286: “Except as otherwise provided by law, no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim for infringement in the action”).

Thus, in our scenario, the patent owner could still sue and could potentially recover 2 (6-4) years of damages, assuming that the doctrine of equitable estoppel would not apply. As known, the doctrine of equitable estoppel could bar recovery of any damages when the patent owner by its actions misled the accused infringer into believing that the patent will not be asserted against the defendant.  

Thus, assuming that the equitable estoppel defense is not a concern, the patent owner could still sue, but if it is worth it or not, may depend on what were the sales of the infringer the 5th and the 6th years prior to filing the patent infringement lawsuit. If they were relatively small, let’s say about $200,000 a year, at a reasonable royalty rate of let’s say 7%, the maximum recovery would be $28,000 (assuming no willful infringement can be proven), and thus it may not be worth it, considering the high cost of patent infringement litigation.

Conclusion

While the defense of laches can no longer prevent recovery of damages for past infringement if the infringement occurred during the last 6 years, patent owners should assert their patents before the patents expire, to avoid losing years of past damages (i.e., 4 years in the above example). Further, in general, and especially if interacting with the accused infringer, care should be exercised, not to say or do something to mislead the infringer into believing that the patent would not be asserted.

SCA v. First Quality Opinion available at https://www.supremecourt.gov/opinions/16pdf/15-927_6j37.pdf

Diclaimer: The views and opinions expressed throughout this blog are the views and opinions of the individual author(s) and/or contributor(s) and do not necessarily reflect the views and opinions of our firm, CIONCA IP Law. P.C.

 

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