Patent Infringements: Extrajudicial and Judicial Procedures, Claims, and Litigation Costs

Patent infringements pose a significant problem for many companies and inventors. When a patent is infringed, it means someone is using the protected invention without permission. This can lead to substantial financial losses and market disadvantages for the patent holder. This article explores the various steps and options available to a patent holder in the event of a patent infringement, including extrajudicial and judicial procedures, claims, and litigation costs.

1. What is a Patent Infringement?

A patent infringement occurs when a third party, without permission, manufactures, uses, sells, offers for sale, or imports a patented product. The patent grants the holder exclusive rights, and any unauthorized use of these rights constitutes an infringement. Patent infringements can be either intentional or unintentional.

1.1 Types of Patent Infringement

There are various types of patent infringements that encompass different actions and scenarios:

• Direct Infringement: This occurs when a product that falls under the patent claims is manufactured, used, sold, or imported without the patent holder’s permission.
• Indirect Infringement: This type of infringement happens when someone supplies or offers to supply essential components of a patented product, knowing that these components will be used to infringe the patent.
• Continued Infringement: When a company continues to infringe a patent despite being aware of its existence and a prior infringement.
• International Infringement: Patent infringements that occur in multiple countries, affecting different national patent systems.

1.2 Examples of Patent Infringement

To better illustrate the concepts, here are some examples of typical patent infringements:

• Technological Devices: A company manufactures smartphones that use patented battery optimization technology without a license from the patent holder.
• Medical Devices: A firm produces surgical instruments that use a patented design without obtaining the necessary rights.
• Pharmaceutical Products: A generic drug manufacturer produces a medication that is still under patent protection before the patent expires.

2. Initial Steps When Suspecting Patent Infringement

2.1 Review the Patent

The first step is to ensure that the patent is still valid and that the suspected infringement actually falls within the scope of the patent. It is important to carefully review the patent claims and, if necessary, consult a patent attorney.

2.2 Evidence Collection

It is crucial to collect evidence of the patent infringement. This can be done by purchasing the suspected product, documenting its use, or other suitable measures. Evidence collection is especially important for later legal steps.

2.3 Engaging a Patent Attorney

An experienced patent attorney can provide valuable assistance by analyzing the evidence, assessing the legal framework, and developing the best strategy for enforcing patent rights.

3. Extrajudicial Procedures

3.1 Cease and Desist Letter

A cease and desist letter is an extrajudicial document that informs the suspected infringer of the patent infringement and demands that they cease the infringement. The letter should include:

• Description of the Infringement: A detailed account of how the patent was infringed.
• Demand for Cessation: The infringer is asked to immediately stop the infringing actions.
• Demand for a Declaration to Cease and Desist: The infringer is asked to provide a legally binding declaration that they will refrain from future infringements.
• Deadline: A specified period within which the infringer must respond.
• Threat of Legal Action: Indication of potential legal proceedings if the infringer fails to comply.

3.2 Negotiations

In many cases, a settlement can be reached through negotiations. This can help avoid lengthy and costly court proceedings. Possible negotiation outcomes include:

• License Agreement: The infringer receives a license to use the patent in exchange for a license fee.
• Settlement Payment: The infringer pays a one-time compensation.
• Cessation Agreement: The infringer agrees to stop the infringing actions without going to court.

3.3 Mediation and Arbitration

In addition to negotiations, alternative dispute resolution methods such as mediation and arbitration can be considered. These methods can often be quicker and less expensive than court proceedings and offer the possibility of finding a mutually acceptable solution.

4. Judicial Procedures

If extrajudicial measures are unsuccessful, the final step is to go to court.

4.1 Preliminary Injunction

In urgent cases, a preliminary injunction can be requested. This serves to immediately stop the infringement until a final court decision is made. A preliminary injunction requires proof of the infringement and its urgency.

4.2 Lawsuit for Injunction and Damages

The main lawsuit in a patent infringement case typically involves claims for injunction and damages.

• Injunction Claim: The patent holder can demand that the infringer cease the infringing actions.
• Damages Claim: The patent holder can seek compensation for the losses incurred. This can include lost profits, the infringer’s unlawful gains, or a reasonable royalty.

4.3 Destruction Claim

Additionally, the patent holder can request the destruction of the infringing products. This is to prevent the products from being further used or marketed.

4.4 Detailed Judicial Process

A judicial process to enforce patent rights involves several steps:

1. Filing the Lawsuit: The patent holder files a lawsuit with the competent court.
2. Preparing the Defense: The infringer prepares their defense, often involving a specialized attorney.
3. Court Hearing: Both parties present their arguments and evidence in court.
4. Court Decision: The court rules on the claims and may issue a judgment in favor of the patent holder.
5. Enforcement of Judgment: The patent holder enforces the judgment, which may include measures such as damage payments or cessation of infringing actions.

5. Claims in Patent Infringement Cases

5.1 Injunction Claim

The injunction claim is the central claim in patent infringement cases. It serves to prevent future infringements. The claim exists regardless of whether the infringer acted intentionally or negligently.

5.2 Damages Claim

The damages claim aims to compensate the patent holder for financial losses suffered. There are various methods for calculating damages:

• Actual Damages: Determination of the actual losses incurred, such as lost profits.
• License Analogy: Calculation of damages based on a hypothetical license fee that the infringer would have had to pay.
• Infringer’s Profit: Surrender of the profit that the infringer made through the patent infringement.

5.3 Information and Accounting Claim

The patent holder has the right to request information from the infringer about the extent of the infringement. This includes disclosure of production figures, sales figures, and profit margins. This helps in preparing the calculation of damages.

5.4 Destruction and Recall Claim

The patent holder can request the destruction of the infringing products and their recall from distribution channels. This ensures that the infringing products are no longer used or sold.

6. Litigation Costs

6.1 Costs in Extrajudicial Proceedings

The costs in extrajudicial proceedings mainly include attorney fees for preparing the cease and desist letter and negotiations. These costs can vary depending on the effort required.

6.2 Court Costs

In judicial proceedings, court costs are incurred, which are based on the amount in dispute. The amount in dispute is the economic value of the subject matter of the dispute. High amounts in dispute can result in significant court costs.

6.3 Attorney Fees

In addition to court costs, attorney fees must be considered. These are based on the Rechtsanwaltsvergütungsgesetz (RVG) and the amount in dispute. In complex cases, attorney fees can be substantial.

6.4 Costs for Experts and Reports

In some cases, it may be necessary to involve experts or obtain reports to clarify technical details or prove the infringement. These costs can be considerable and should be taken into account when planning a case.

6.5 Cost Risk

It is important to note that in the event of losing a case, the losing party must bear the costs of the proceedings. This includes their own costs as well as those of the opposing party.

7. Strategies to Avoid Patent Infringements

7.1 Thorough Research and Due Diligence

Before launching a new product, thorough research should be conducted to ensure that no existing patents are infringed. This can be done through patent searches and consulting patent attorneys.

7.2 Licensing and Cooperation

If it is determined that a product may infringe an existing patent, a licensing agreement with the patent holder can be a solution. Cooperation and partnerships can also help avoid patent disputes.

7.3 Developing Own Patents

Developing and registering own patents can not only provide protection but also serve as a negotiation tool to avoid or resolve patent disputes.

7.4 Training and Awareness

Employees should be regularly trained and made aware of the issue of patent protection. A good understanding of intellectual property and the associated risks can help avoid patent infringements.

Conclusion

Patent infringements can have significant financial and legal consequences for the parties involved. Patent holders have various options for addressing infringements, both extrajudicially and judicially. While extrajudicial measures are often less costly and faster, judicial procedures offer a final and legally binding solution. It is crucial to be aware of one’s rights and claims and to take appropriate measures to effectively protect patents. Careful evidence collection and collaboration with experienced patent attorneys are essential.

For further information or legal support, we are at your service. Our expertise in patent law ensures that you make the best decisions and achieve optimal protection for your inventions.