THE CORCORAN LAW FIRM

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THE CORCORAN LAW FIRM

Intellectual property, in the United States, consists of patents, trade secrets, trademarks, and copyrights. Each has its own specific rules, laws, and regulations. A patent is not the same as a trade secret, which is not the same as a trademark, which is not the same as a copyright. They’re all different and they all cover different aspects of intellectual property. Patents cover inventions that have utility and novelty that are not obvious- nearly anything made by man that doesn’t comprise an abstract idea. In patent law, the hot area right now is whether a patent is patent-eligible even after the USPTO has already issued the patents.

The courts have decided to mix up what is patent eligible and what is not, ranging from the Supreme Court to the federal circuit to all the District Courts. There’s a lot of ambiguity in the law as to what is a patentable invention, especially for software patents or computer method patents. They were formerly flexible on what was a patentable invention but then came business method patents, where owners of business method patents were suing everyone under the sun for, basically, doing business. One case made it to US Supreme Court and the US Supreme court decided that the patent was recited in an abstract idea and therefore was not a patentable invention. That decimated about two million patents in the US patent system, ranging from software patents to computer method patents to biological patents.

All method patents came under scrutiny because, by nature, methods are a process of doing something and, under the new law, all the old method claims in a patent now seem to recite abstract ideas. It’s important for someone who’s going to enforce a US patent to understand the intricacies of all the court decisions in the US, ranging from the US Supreme Court to the federal circuit to all the District Courts, as to what is a patentable invention. That’s the first step in determining whether you have a case.

Claims define your property. Just like the property lines for your house are defined by the county, US patent rights are defined by the claims and the four corners of the claims define what exactly in your invention is claimed. If you think that someone is infringing your patents, the first thing you need to do is compare your claim language, word by word, to the accused process, product, or method. If anything is missing in the claims, then you may not have a patent infringement claim. If the claim language isn’t met literally, it’s possible that the accused product or process infringes on the doctrine of equivalence analysis. That’s the second step. The third step is to determine if there’s any prior art out there that could kill your patent.

The US patent office has set up a board called the Patent Trial and Appeal Board, where issued patents can be challenged for their validity after they’ve issued. If a patent infringement suit is filed against a defendant, the defendant has one year from the date of being served the complaint to file a petition in the US Patent office at the Patent Trial and Appeal Board (PTAB) to try to invalidate that patent over the prior art. Most times, a petition like that is not filed until the defendant is sued but it can happen if a defendant feels like they’re under the threat of litigation.

It’s important to have a patent litigation lawyer, who is knowledgeable in how the courts and the PTAB works, so that your patent survives a review at the PTAB. The petitions can be for what’s called an inter partes review, a covered business method patent review, or a post grant review. A covered business method patent review covers methods of doing business. An inter partes review covers all other patents. A post grant review takes precedent over the inter partes review and covers business method patent reviews within the first nine months that a patent is issued.

It can take up to six months, once a petition is filed, to determine whether the USPTO will grant the petition or not. It’s important to hire an attorney who knows how to file an effective response to a petition, so that the PTAB denies the petition requests. Once your complaint is filed in District Court, you have 90 days to serve the defendant. You’ll try to enter negotiations with the defendant in order to try to settle the case without further litigation. If the defendant refuses, you’ll serve the complaint and the defendant has 21 days to answer the complaint or to file a motion to dismiss. Sometimes, the defendant will file a motion to dismiss because the claimant had claimed an abstract idea. It’s important to have a patent litigation lawyer who can overcome motions like that. Once the case proceeds beyond the pleading stage, the court will schedule a case management conference, where the parties will set up a schedule for discovery, motions, claim construction briefings, a claim construction hearing, expert discovery, fact discovery, pretrial, jury selection, and trial.

Before the case management conference, the parties will devise a schedule and give it to the court, and the court will turn it into an order. During the process, we are open to negotiations with the defendant to try to settle the case. Negotiating saves both sides’ resources, time, and money. If the defendant still refuses, we begin discovery. Discovery can take the form of interrogatories (written questions) and requests for documents.

Once discovery is received from the defendant, within a few months, depositions are scheduled for the key players to ask them about the documents that were served and the questions that were answered. All along the way, you’re still trying to settle the case as information comes to life. If the defendant refuses, you continue into claim construction. Claim construction is where the terms of the claims are defined. In a contract, there may be terms that are ambiguous or not clearly understood to an ordinary observer. Usually, the defendant will try to have the court define as many terms in the claims as possible to help with their non-infringement arguments. Because the court will agree with the defendant’s definition of claim terms, they will use that definition as a non-infringement argument.

It’s important, again, to have an attorney who understands the claim construction process and how claim terms are defined. Once the claim construction briefing is concluded, the court will have a hearing where the parties argue over the definitions of these terms. The court will issue its claim construction order and decide what the terms mean. At that point, the parties may come back to the negotiating table to try to settle the case because by then, it’s becoming clear what’s infringed and what isn’t.

Earlier in the case, the plaintiff serves what’s called infringement contentions on the defendant. This is a chart showing, in one column, all the claim language and in the second column, the accused products and how they relate to the claim language. Once the court issues its claims instruction order, that chart may need to be modified based on the court’s new definition of the terms. Once the court issues its order, the plaintiff may reserve its infringement contentions. It’s essential to have a lawyer who knows how to prepare infringement contentions, so that there’s little to no argument over what’s infringed and what isn’t.

The defendant will serve what’s called invalidity contentions, which uses a similar format as infringement contentions. In one column, you have all the claims and in the second column, you have all the prior art that allegedly matches the claim language. The plaintiff’s job is showing infringement. The defendant’s job is to show that the patent is invalid over the prior art or that the claims are indefinite. Someone who works in this patented technology area for a living is referred to as a person of ordinary skill in the art. One method that defendants will use is to say that the claim language is ambiguous and indefinite to a person of ordinary skill in the art, in addition to any prior art they find that they may think invalidates the claims.

The prior art can be either asserted individually or in combination. It’s imperative to have a patent litigation attorney who has experienced dealing with defendant invalidity contentions. The defendant may reissue its invalidity contentions after the court issues its claim construction order, based on how the definitions of the terms may affect its invalidity position. Then, the parties will move from fact discovery to what’s called expert discovery, where the parties hire technical experts and damages experts. The plaintiff hires a technical expert, who is a person of ordinary skill in the art. He or she provides a written opinion as to why the defendant infringes over the patent. The defendant hires an expert rebutting the plaintiff’s infringement report and the defendant’s expert will also write a report on why the patent or patents are invalid. The plaintiff’s technical expert will rebut that report with his own report.

There is usually a separate damages expert in patent damages, who will lay out a written report as to how much the defendant owes in damages. Damages could take the form of either lost profits or reasonable royalties. Under statute, a patent owner is entitled to at least a reasonable royalty for infringement of his or her patents but may also recover lost profits, if the owner sells the products himself and the defendant has stolen part of the market by selling its own infringing products. Lost profits damages are more lucrative than reasonable royalties but if the plaintiff doesn’t sell products, then the plaintiff cannot pursue loss profits damages. A general rule is that a plaintiff can recover approximately 5% of net sales of the defendant’s accused products.

The plaintiff’s damages expert will issue his or her report on how much in damages the defendant owes. The defendant will hire its own damages expert to rebut the report to show why the plaintiff is owed zero or much less than the number the plaintiff claims is owed. Depositions are taken of all these experts to question them about their reports. The defendant will depose the plaintiff’s experts. The plaintiff will depose the defendant’s experts. Once their depositions have concluded, the case enters the summary judgment phase, where the defendant may file a motion for summary judgment for non-infringement, based on their expert’s opinion on why the accused products or methods do not infringe, combined with all of the discovery. The plaintiff will file its response using its expert’s reports and all the discovery as to why there’s at least a fact question that requires a jury to determine.

Summary judgment motions are either intended to limit the claims existing in a case or dismiss the case entirely, based on undisputed facts that have been discovered. If there are any fact issues regarding infringement, invalidity, or damages, the court will usually deny the motions and continue sending the case to a jury. Approximately one third of cases are dismissed on summary judgment, which shows that most courts like to have juries decide the cases. Dismissing cases on summary judgment can be overturned on appeal and District Courts don’t like to be overruled on appeal.

A more conservative District Court will send the case to a jury and once the summary judgment motions and responses are filed, the court will hold a hearing on the motions, where the parties argue over whether there’s infringement, whether the patents are invalid, or how much money the defendants owe. The court will issue its ruling. Sometimes, the court will hold this ruling throughout trial to see what else is uncovered at trial. It’s very important to have an attorney who clearly understands the summary judgment process, how to rebut, how to file motions for summary judgment and respond to motions for summary judgment, has experience working with experts, and understands patent damages law.

After the summary judgment phase, the case is very close to trial. The parties will file more motions, limiting what kind of testimony may be allowed at trial. The parties will file motions to prevent the other party from introducing prejudicial evidence that would prejudice the party’s position at trial in front of the jury. Courts, as you can imagine, do not like those kinds of motions and try to limit the number of motions restricting each party as to what they can say and do during trial. There will be hearings on these motions. The parties will provide the court with a list of witnesses for trial, status of settlement, and any other issues that may come up at trial. This is called a pretrial conference.

You need an attorney who can identify which evidence is going to be clearly relevant at trial. That evidence will be evidence of infringement, invalidity, and damages. A month after the pretrial conference, the parties appear back in court to select a jury. Jury selection is its own science and requires a highly skilled and experienced attorney.

The parties and the court will select 12 members to sit on the jury. Once the jury is picked, the plaintiff puts on its case, calls its witnesses, presents its documents, presents its evidence, presents its infringement expert, presents its invalidity experts, and presents its damages expert, as well as any members of the company who may be helpful to prove either infringement, non-invalidity, or damages.

Once the plaintiff rests its case, the defendant will usually move for judgment of non-infringement, of invalidity, or of no damages. The vast majority of the time, the court denies those motions and the case proceeds. The defendant puts on its case, calls its experts, and calls witnesses who worked for its company to prove non-infringement, to prove that the patents are invalid, and to prove that the other side owes damages.

Once the defendant rests its case, the court will resolve any outstanding motions that were made during the trial regarding any evidence and will rule on those motions and instruct the jury accordingly. The court will instruct the jury as to how the jury is to evaluate all the evidence that’s been presented at trial to find whether the patents are infringed and invalid, infringed and not invalid, and also whether any damages are owed and how much. The jury then deliberates over all the evidence.

If the plaintiff wins, the defendant is going to file motions for judgment notwithstanding the verdict that the patents are not infringed, that they are invalid, and that no damages are owed based on the evidence presented at trial. Most of the time, the courts side with whatever the jury decided. All patent cases are appealed to the US Court of Appeals for the federal circuit in Washington, DC. All other intellectual property, trade secrets, trademark, and copyright cases are appealed to the regional circuits, depending on where the District Court is located. Usually, within 60 days of the case being docketed at the appeals court, the appealing party will file its brief as to why they should have won in the District Court.

It’s important to hire an attorney who understands how the trial courts and appeals court work, inside and out. Once the appellant’s brief is filed in the appeals court, the respondent will have 40 days to file its response brief. These appeal briefs should cover no more than three issues on appeal. There are so many issues that are raised in a District Court, the Appeals Court is not going to deal with all of those issues all over again. They want to look at the three most important issues that should be raised at the appeals court level and those issues usually involve infringement, invalidity, and damages. The appellant will file a reply brief to the response brief and then the parties will file a joint appendix to be attached to all the briefing, which includes all the evidence that’s referred to in the briefing.

The appeals court will review the briefing at the federal circuit. You’re guaranteed oral arguments, so they will schedule an oral argument on the briefing, usually 60 to 90 days after the briefing is closed. The lawyers are instructed to appear to make their arguments before a panel of three judges. Before the oral argument, you’ve had three judges review your briefing and at least one law clerk for each judge. Your attorney has 15 minutes to make your case at the appeals court. Once the oral argument is completed, the appeals court will render its opinion on the prevailing party. It can happen within weeks or 30 to 60 days thereafter. The losing party in Appeals Court appeals to the US Supreme Court. The Supreme Court process is very similar to the Appeals Court process but the issues are even more refined and the Supreme Court doesn’t have to take the case.

Trademarks are different from patents, copyrights, and trade secrets. Trade secrets are its own form of intellectual property because they are not disclosed in public, like a patent is. It’s the inner workings of how a company may do business or make a product. The most famous example is Coca Cola’s formula for Coca Cola. They’ve managed to keep how they make Coke a trade secret all these years and that’s usually done by having your employees sign confidentiality agreements.

If companies want a patent, they have to disclose their trade secret information, which is the trade off because patents have a 20 year exclusivity right. In return, the inventors disclose to the public how the invention was made. Trade secrets will last as long as they are a secret, which could be a very short amount of time or a very long amount of time, depending on how well the company protects them. It’s important to have an attorney who understands how trade secrets work and what protections are required to maintain a trade secret.

The Defense of Trade Secrets Act was passed in 2014, which covers what is a federal trade secret and how a trade secret would be litigated in the federal courts. Each state has its own trade secret laws on what is a trade secret and the rights for a trade secret. Most states have signed what’s called the Uniform Trade Secrets Act, where trade secrets are handled fairly uniformly throughout the states. A trade secret owner can expect similar rights and protections from state to state. The Defense of Trade Secrets Act is slowly overcoming the Uniform Trade Secrets Act because it is a central body of law that Congress drafted, specific to trade secrets versus general rules and regulations that fall under the Uniform Trade Secrets Act.

The Defense of Trade Secrets Act makes it easier for trade secret owners to bring a case, as well as obtain statutory damages on a breach of trade secret or theft of trade secrets. Trade secret violations can be much more lucrative than patent damages or any other form of intellectual property damages because the trade secrets cover the core methods and processes of making and using products.

Trademarks can cover a brand name for a product or a company. When you hear the word, for example, Kleenex, it identifies in your mind, immediately, as tissue paper made by Johnson and Johnson. However, Kleenex is a brand name and if anyone copied it to sell tissues, they’d be violating the trademark for Kleenex. Google is a trademark that has a value of approximately $44 billion and a company market capitalization of $161 billion. If someone wanted to ride the coattails of Google and create a search engine that competes with Google, they couldn’t create one called Google or even called Google Search, Google Cache, or Inspector Google. Those would be too similar to the trademark and Google would have rights to pursue that infringer.

Copyrights cover written materials, creative works of art, music, paintings, books, software, and anything that would be considered an artistic creation. Software is copyrightable. The code itself and how it’s written and formulated is like a book. Someone can’t just copy code verbatim and use it in their own platform. That would be a copyright infringement. The artistic world is famous for working off of each other to create their own storylines, music, or paintings because they all inspire each other. It’s important to have an attorney who knows the difference between a new creation and outright copying, as well as the laws that cover copyrights.

A copyright needs to be registered at the US Copyright Office before you can sue for copyright infringement, if you intend to obtain statutory damages. Most copyright holders don’t know that without a form of registration, they cannot pursue statutory damages. You can still register the copyright within 60 to 90 days of filing suit, but you will lose statutory damages for any damages that have occurred prior to the registration date. It’s really important to register your copyright as soon as possible, if you think it’s going to have any kind of value. Otherwise, under US law, something is copyrighted as soon as it’s a material that holds a creative work.

There are similar issues with trademarks. There are federally registered trademarks and there are trademarks that are enforceable locally without a federal registration. There may be a small, local business that sells nickel coins, called Nicklets. It’s a family owned business that trades coins and they have done that for many years. Then, a national company suddenly comes up with the idea of Nicklets, selling coins throughout the United States. They apply for a federal trademark and then they have rights to the name Nicklets throughout US. The small business in Texas or California, however, has rights to it as well because they started it and they’ve been running that business locally for years.

It is so important to find an attorney who understands the nuances between local trademark rights and federal national trademark rights. It’s important to have an attorney who can value your intellectual property case, who understands how far to take the case, and who is honest enough with his or her client to tell them when they don’t have a winning case.

Costs of IP Litigation

Intellectual property litigation can be very expensive. I offer various payment options, including contingency, mixed contingency, or regular rates. Under the contingency option, I’m being paid a percentage of any recoveries but the client covers expenses, and receives expenses back. Mixed contingency is where I seek a reduced hourly rate combined with a reduced contingency rate. Again, the client pays expenses. There’s also the regular hourly rate, which is negotiable depending on the complexity of the case. Since they are so costly, it’s important to have an attorney, in IP cases, who knows how to value a case appropriately and spend no more than is necessary to litigate the case.

For more information on Intellectual Property Litigation In Texas, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (903) 945-6808 today.

Peter Corcoran

Call For A Consultation
(903) 945-6808