Patent Infringement Does Not Necessarily Equal Theft

by Manny Schecter, IBM Chief Patent Counsel

I’d like to clear up a myth about patents. I frequently see public discourse about alleged infringers of patents having “stolen” the patented inventions. Sometimes other terms are used instead of stolen, such as “misappropriated,” “pirated,” “ripped-off” and so on. The implication is that infringers intentionally used the inventions with full awareness of the patent protection. The infringers are portrayed as “bad guys.”

Not so fast. There is no requirement to show intent to prove patent infringement. Unlike copyright or trade secret, which do not protect against parallel independent development, a patent confers rights against another who makes, uses, or sells the patented invention — regardless of whether the other party had knowledge of the patent. In this way, the patent system encourages significant investment in the development of technology. In return for such powerful protection, there are stricter requirements for patentability than for obtaining other forms of intellectual property protection, including complete public disclosure of the invention.

It is indeed sometimes the case that an infringer acts with full awareness of a patent. To discourage such behavior, additional remedies are provided if patent infringement is found to be “willful.” It is impossible to know how often willful patent infringement occurs because most patent disputes (about 95%) are settled out of court. Although roughly 90% of patent lawsuits allege willful infringement, willfulness is found in only about 2% because suits are settled or patents are often found invalid or non-infringed. Willfulness is found in about half of the suits where the issue is reached, and about half of the suits with a finding of willfulness actually result in increased damages.¹

It is therefore safe to assume that a substantial portion of patent infringement is inadvertent and the patent infringers are not “bad guys.”

With the increased coverage of patent lawsuits in recent years (I express no opinion here with respect to any particular lawsuit) it may be tempting to read bad intentions into every act. One should not simply assume the accuracy of an attention-grabbing headline.

 

1 See, for example, Willful Patent Infringement and Enhanced Damages After In Re Seagate: An Empirical Study, Christopher B. Seaman, 97 Iowa Law Review 417, 2012, http://www.uiowa.edu/~ilr/issues/ILR_97-2_Seaman.pdf citing Kimberly A. Moore, Empirical Statistics on Willful Patent Infringement, 14 FED. CIR. B.J. 227 (2004).