The Sedona Conference7
on Patent Litigation
November 7-8, 2002
Willful Patent Infringement As A Barrier To
Dissemination of Patent Information
Robert Greene Sterne
David K.S. Cornwell
Sterne, Kessler, Goldstein & Fox P.L.L.C.
1100 New York Avenue, NW
Washington, DC 20005
(202) 371-2600
www.skgf.com
This paper reflects only the present considerations and views of the authors, which should not be
attributed to Sterne, Kessler, Goldstein & Fox P.L.L.C., or to any of its present or former clients.
8 2002 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.
Willful Patent Infringement As A Barrier To
Dissemination of Patent Information
Robert Greene Sterne1
David K.S. Cornwell2
Sterne, Kessler, Goldstein & Fox, PLLC3
Washington, DC
The topic of willful patent infringement creates a debate that rages on. The participants
in this battle are, to nobody’s surprise, patent owners and businesses who potentially infringe
patents. The themes raised by the debate are universal. Patent owners urge with passion that an
infringer is “willful” if the infringer knew of the existence of the infringed patent through any
means, knew or should have known that it was infringed, and had no credible reason to believe
that the patent was invalid or unenforceable. This argument appears to makes perfect sense. But
in the real world of business, it does not.
Willful patent infringement as applied by the courts4 thwarts the Constitutional mandate
of Article 1, Section 8, Clause 85 which authorized Congress to created the U.S. patent system.
The ultimate purpose of the patent system is to promote progress of science and the useful arts
through dissemination of knowledge disclosed in the patent documents.6 A necessary byproduct
of the patent system is to protect the inventor; by protecting the inventor the patent system
achieves its goals.7 The quid pro quo of granting the inventor a time-limited exclusive right is the
adequate disclosure in the patent of information about the protected invention to enable a person
of ordinary skill in the art to make and use the invention.8 By examining the patent literature, the
general public can benefit from the information transferred by the inventor, and build on this
body of knowledge. By hoisting itself on the advances of others, a new inventor can emerge to
make further advances.9 A catalytic effect is created by the patent system because patents act as a
centralized body of information that can and should be examined by anyone in the public
involved in the technology space of that information.
1
Director and a founder of Sterne, Kessler, Goldstein & Fox, PLLC, Washington, DC. E-mail:
rsterne@skgf.com ; voice: 202-371-2555.
2
Director of Sterne, Kessler, Goldstein & Fox, PLLC, Washington, DC. E-mail: davidc@skgf.com. voice:
202-371-2580.
3
Website: www.skgf.com. The authors thank Al Ferro and Jon Wright of their firm for assistance in
preparation of this article. This article collects the views of advocates on this subject of willfulness, and
does not necessarily reflect the individual views of the authors or those of their firm or their clients.
Copyright © 2002 SKGF. All Rights Reserved Worldwide.
4
The United States Court of Appeals for the Federal Circuit hears all patent appeals from the District
Courts. Thus, as a practical matter, it is the Federal Circuit case law that has created the rules surrounding
the doctrine of willful patent infringement. This article examines the practical implications of these rules as
applied to competitors of patent owners who are engaged in normal competition and competitive analysis.
5
U.S. Const. art. I, § 8, cl. 8.
6
See Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 146 (1989).
7
Id.
8
Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 481 (1974).
9
Id. According to Thomas Jefferson, a central tenant of the patent system was that “a machine of which we
were possessed, might be applied by every man to any use of which it is susceptible.” 13 Writings of
Thomas Jefferson 335 (Memorial Ed. 1904).
2
Unfortunately, willful patent infringement effectively prevents this centralized body of
information from being examined by the people most interested in it: competitors of the patent
owner.10 The costs imposed on these competitors are so high that often they do not examine the
patents of others when launching a new product or service or performing competitive analysis of
patent rights in an area of technology. The laudable goal of protecting the patent owner from
infringement by an unscrupulous competitor is turned on its head in these contexts because the
normal competitor cannot risk obtaining knowledge of the unasserted patents of the patent owner.
To understand this practical dilemma created by willfulness, three typical scenarios are
illuminating. The first involves a patent owner who notifies a competitor of possible
infringement, and the competitor ignores the problem and continues to infringe. This is the
behavior that the doctrine of willful patent infringement was created to address. The law must
protect the patent owner by allowing the courts to award enhanced damages. In exceptional cases,
the courts must also be allowed to award attorney fees and costs. Commentators do not dispute
the reasonableness and rationality of this application of the rules of willfulness.
The second scenario involves a normal competitor’s introduction of a new product or
service. This is called the freedom to operate scenario. In many technologies the pace of
innovation is much faster than the ability of the patent system to examine and issue patents in
these technologies.11 Because patent applications are maintained secret for at least part of the
examination process, they cannot be viewed by the competitor going through the fast paced
development cycle. Moreover, many products or services could be covered by claims of a
multitude of unexpired patents.12 Thus, many normal competitors do not perform a freedom to
operate investigation to try to determine if there are patent infringement problems; their
cost/benefit analysis militates against such an investigation. The thinking is that such an
investigation is inherently inexact in determining which patents may be at issue, and that once a
group of patents are uncovered they have to be investigated in an extensive way and put to rest by
a written opinion. The thinking of many normal competitors is that it is much more cost effective
to deal with a patent infringement problem once it surfaces than to unilaterally try to figure out
possible problems ahead of time that may never materialize.
10
This article summarizes a growing body of writing on this issue by prominent patent law commentators
(“Commentators” in this article.). It synthesizes the practical problems and proposed solutions identified
by these Commentators. The goal of this article is to promote a critical examination of this area of patent
law because in the views of these Commentators and many other knowledgeable people it is one of the
most troublesome areas today in patent law.
11
Some technologies - - such as consumer products and electronics - - have product development cycles in
months, whereas in other technologies - - such as pharmaceuticals - - have product development cycles in
years. There is an inherent delay in the patent examination process as presently implemented at the United
States Patent & Trademark Office (USPTO) that requires at least two years to examine and issue a patent.
Thus in fast paced technologies, the patents are always issuing after the roll out of the product or service.
The law of willfulness does not draw any distinction between fast and slow paced technologies.
12
Certain technologies inherently have only one or a few patents covering a product or service, and such a
patent is easy to uncover because of the available search strategies. An example is a new pharmaceutical
compound. The compound is easily characterized by a chemical formula or by a name dictated by an
established naming convention. At the other end of the spectrum are many technologies, such a consumer
products and electronics, where many patents may cover specific features, functions or aspects of the
product or service. Uncovering such patents is problematic since available search strategies are ineffective
because an established formula, name or other idea descriptor does not exist. Thus, in these technologies
there are typically many patents that may be relevant or uncovering them is problematic, which increases
the investigation costs substantially.
3
The third scenario involves a normal competitor’s investigation of unexpired and expired
patents in a specific technology space. This is called a competitive analysis investigation. The
competitor has two goals. One is to learn from others who have come before. In other words, to
take advantage of the patent system for its ultimate purpose. The other is to ascertain if there are
significant patent barriers in the technology space that may pose a problem if the space is entered.
This is a prospective freedom to operate investigation. The results of such research could
improve technical innovation and business decision making.
Under present willful infringement law, it is the opinion of commentators that the second
and third scenarios pose significant problems to normal competitors who neither have been
actually contacted by the patent owner nor who know of the patents in question through the
marking mechanism. Many normal competitors elect not to perform the second or third scenarios
but instead remain deliberately ignorant. Sometimes ignorance is less expense and problematic
than investigating existing patents, which then have to be analyzed and opinions prepared.
Different industries, sized competitors, and sized markets invoke different decisions
involving the second and third scenarios. At one end of the spectrum are the pharmaceutical and
chemical industries. They typically engage in second and third scenarios regardless of the size of
the competitor or the perceived market. The reasoning is that the cost of building a chemical
plant or bringing a new drug to market is so large13 compared to these scenarios that it is cost
justified to perform them.
The other end of the spectrum where the second or third scenario is not executed
typically involves the following variables. The industry tends to have short product development
cycles and short product lives. The costs of product development and product manufacture are
low. Many patents could cover the product or service at issue. The size of the competitor is
small, and may be an emerging company.14 The perceived market is small or is indeterminate.
The cost of performing the second or third scenarios is high compared to these factors.
There is another variant between these two extremes. It typically involves a large
company in a fast paced industry. The company has many products and a large patent portfolio.
It is usually a dominant player in its industry. In this circumstance, the second scenario may be
performed, but no in depth analysis of each uncovered patent is done nor are opinions prepared.
The third scenario may also be performed using the same approach. Management thinking is that
if an infringement charge is made by the patent owner of a patent uncovered in one of these
scenarios, the willfulness risk can be neutralized by a countersuit. Such countersuit is brought
13
The cost of a new chemical plant or bringing a new drug to the market typically is in the $100M++ USD
range. The cost of a second or third scenario for these competitors is in the six figure to low seven figure
USD range. Thus the result of the cost benefit analysis.
14
Cash is usually in very scarce supply in an emerging company, especially in the current market
downturn. So there is very little economic cushion for these companies. Management is often required to
cut corners that would not be cut with larger competitors in order to stay alive. Since emerging companies
produce a disproportionate number of new jobs in the U.S.A and a disproportionate amount of innovation,
it is the view of the authors that the very real problems of these companies vis-à-vis willfulness should be
considered carefully in any change in the law.
4
against the patent owner using one or more of the patents from the competitor’s extensive patent
portfolio.15
So large segments of the inventing population is effectively barred from the patent
literature. Emerging companies and individual inventors are particularly thwarted. This is
anomalous to say the least since a disproportionate amount of innovation comes from these two
groups. It would be in the public interest to bring them back into the patent system.
Section 2.
Current Willfulness Law16
The Federal Circuit has established that treble damages and attorney fees are appropriate
when the infringement is found to be willful. In making a determination of willfulness, the
Federal Circuit uses a "totality of the circumstances" test.17 A wide variety of factors are
considered under this test.18 The Federal Circuit emphasizes that no hard and fast rules exist for
making a finding of willfulness,19 and that the significance of each factor depends on the facts of
the particular case.20
Notwithstanding this multi-factored approach, three important elements have emerged
that act in combination to thwart the primary goal of the patent system. First, the Federal Circuit
has imposed on potential infringers an affirmative duty to avoid infringing activity when they
receive notice of a competitors patent rights. Second, the level of notice required to trigger this
15
This is one of the main drivers behind the significant increase in patent filings in the last 15 years by
many large companies in technologies previously not known for large patent portfolios. The concept is
often called “mutual deterrence,” a reference to superpower nuclear strategy during the Cold War.
16
Parts of this section are excerpted with the permission of George Mason Law Review from Jon E.
Wright, Comment, Willful Patent Infringement and Enhanced Damages—Evolution and Analysis, 10 GEO.
MASON. L. REV. 97 (2001).
17
Cent. Soya Co. v. Geo. A. Hormel & Co., 723 F.2d 1573, 1577 (Fed. Cir. 1983).
18
Read Corp. v. Portec, Inc., 970 F.2d 816, 827 (Fed. Cir. 1992).
(1) whether the infringer had actual knowledge of an existing patent;
(2) whether there is a good-faith belief on the part of the infringer that the patent is invalid or not
infringed;
(3) whether an infringer received a competent opinion;
(4) whether the infringer made a good-faith effort to design around the patent;
(5) whether the infringer's behavior and tactics at trial are consistent with a finding of good faith;
(6) whether there was deliberate copying;
(7) the infringer's motivation;
(8) the size and finances of the infringer;
(9) the closeness of the case;
(10) the duration of the misconduct;
(11) whether the infringer took remedial steps;
(12) whether the infringer made any attempts to conceal the infringement; and
(13) the defendant's motivation for harm.
19
Graco Inc. v. Binks Mfg. Co., 60 F.3d 785, 792 (Fed. Cir. 1995).
20
Read Corp., 970 F.2d at 826-27.
5
affirmative duty is uncertain, but appears very low. Third the Federal Circuit permits courts to
draw an adverse inference where an accused infringer chooses not to avail himself of the advice
of counsel defense.
These three elements, in combination, essentially require reliance on competent opinion
of counsel to avoid a finding of willful infringement whenever a potential infringer becomes
aware of competitor’s potentially troublesome patent rights. Indeed, in Johns Hopkins University
v. CellPro, the district court remarked that the combination of the rules "all but force" alleged
infringers to demonstrate to the court that they relied on competent advice of counsel.21 As
discussed above, such a requirement can be incredibly burdensome. So much so, that it often
makes more economic sense to instead remain willfully ignorant of other’s patent rights.
A.
Affirmative Duty to Investigate
In 1983, two Federal Circuit cases solidified the affirmative duty to investigate. These
cases, decided soon after the creation of the Federal Circuit, appeared to affirm what had already
been the rule in at least four circuit courts of appeals.22
In Underwater Devices, Inc. v. Morrison-Knudson Co., Inc., the Federal Circuit stated
that "where . . . a potential infringer has actual notice of another's patent rights, he has an
affirmative duty to exercise due care to determine whether or not he is infringing."23 This
affirmative duty includes, among other things, "the duty to seek and obtain competent legal
advice from counsel before the initiation of any possible infringing activity."24 It is important to
note that, in Underwater Devices, advice of counsel was sought. However, the advice was from
an in-house attorney who was not a patent attorney. The opinion did not examine the file history,
and relied solely on a piece of prior art that had already been considered by the examiner.
Central Soya Co., v. Geo. A. Hormel & Co.,25 added bite to the affirmative duty rule
established in Underwater Devices. In this case, the accused infringer did obtain a written
opinion outside patent counsel. However, the accused infringer did not implement the advice
contained in the opinion, and the finding of willful infringement was upheld.
These two cases indicate that avoiding willfulness requires the reliance on competent
opinion of outside patent counsel. Indeed, in Read Corp. v. Portec, Inc., the Federal Circuit
stated that “[t]hose cases where willful infringement is found despite the presence of an opinion
of counsel generally involve situations where opinion of counsel was either ignored or found to
21
Johns Hopkins Univ. v. CellPro, 160 F.R.D. 30, 34 (D. Del. 1995). The Federal Circuit subsequently
affirmed the finding of willfulness and treble damages. Johns Hopkins Univ. v. CellPro, 152 F.3d 1342,
1346 (Fed. Cir. 1998).
22
See, e.g., Dickey-John Corp. v. Int'l Tapetronics Corp., 710 F.2d 329, 348 (7th Cir. 1983) (holding that
an accused infringer has a duty to obtain an opinion of counsel at the planning stages of an invention);
Novo Industri A/S v. Travenol Labs., 677 F.2d 1202, 1211 (7th Cir. 1982) ("Once the interference
proceeding had been concluded and the patent had been issued to Novo, Travenol was under an affirmative
duty to exercise due care to determine whether it had a reasonable legal basis for its continued sale of
Fromase."); Trio Process Corp. v. L. Goldstein's Sons, Inc., 461 F.2d 66, 75 (3d Cir. 1972) (stating the
Goldstein's failure to obtain an opinion of counsel after the patent issued "alone is enough to support a
conclusion of willfulness"); Coleman Co. v. Holly Mfg. Co., 269 F.2d 660, 666 (9th Cir. 1959) (quoting the
trial court's holding that an accused infringer must "exercise due care to ascertain whether or not it was
infringing plaintiff's patent").
23
Underwater Devices, Inc. v. Morrison-Knudson Co., 717 F.2d 1380, 1389 (Fed. Cir. 1983).
24
Underwater Devices, 717 F.2d at 1390 (emphasis in original).
25
Cent. Soya Co. v. Geo. A. Hormel & Co., 723 F.2d 1573, 1577 (Fed. Cir. 1983).
6
be incompetent.”26 A competent, well researched invalidity opinion can be prohibitively
expensive, especially where the technology is complex, or is covered by more than one patent.
B.
Notice
The exact level of notice is uncertain, but it appears to be low. This significantly
increases the impact of the affirmative duty rule.
At one end of the spectrum, when no one within the company has knowledge of the
infringed patent, there is clearly no duty to investigate.27 At the other end of the spectrum, when
the company is told of a competing patent and is offered a license, there is an affirmative duty to
investigate.28 As indicated below, however, the standard is not entirely clear with respect to a
number of factors, such as how much knowledge is required, whether knowledge of a particular
infringement concern is necessary, and who has the knowledge. Examination of these issues
reveals that even slight knowledge could potentially trigger a duty to investigate.
1. How Much Knowledge?
Provided that other factors are met, it appears that any exposure to or knowledge of the
infringed patent will be sufficient to meet the notice requirement. For example, in Great Northern
Corp. v. Davis Core & Pad Co., Davis Core was found to have willfully infringed Great
Northern's patent for foam shipping supports.29 In determining whether Davis Core had actual
knowledge of Great Northern's patent, it was sufficient that a third party had mentioned to Joel
Davis, president of Davis Core, that there was a similar product on the market that was patented,
but that the patent was invalid.30 Davis Core then waited two years before seeking a legal
opinion. Based on those facts, the Federal Circuit held that Davis Core had an affirmative duty to
obtain a validity and infringement opinion, and its "failure to fulfill that duty is clearly an
adequate basis for the district court, in its discretion, to assess treble damages . . . ."31
In Studiengesellschaft Kohle mbH v. Dart Industries, inhouse monitoring of industry
developments was sufficient to create an affirmative duty to investigate a competitor's patents.32
In this case, the in-house counsel did fulfill the duty by rendering a qualified opinion, thus
avoiding a finding of willfulness.33 A similar situation existed in Stryker Corp. v. Intermedics
Orthopedics, Inc. where in-house counsel became aware of a potentially troublesome patent
through a combination of a competitor's brochure stating that a patent was pending, and thereafter
seeing notice of the issued patent in the Official Gazette of the United States Patent and
Trademark Office.34 Stryker is discussed more fully in the next section, but these cases
demonstrate that only a minimal amount of knowledge is required before the duty to fully
investigate is triggered.
2. Does the Patent Raise Infringement Concerns?
It is uncertain whether courts will also require knowledge by the infringer that the patent
raises infringement concerns before the notice requirement is met. For example, in Spindelfabrik
Suessen-Schurr v. Schubert & Salzer, the Federal Circuit stated that "an appreciation of the
26
Read Corp. v. Ported, Inc., 970 F.2d 816, 828-29 (Fed. Cir. 1992).
Power Lift, Inc. v. Lang Tools, 774 F.2d 478, 482 (Fed. Cir. 1985).
28
Leinoff v. Louis Milona & Sons, Inc., 726 F.2d 734, 743 (Fed. Cir. 1984).
29
Great N. Corp. v. Davis Core & Pad Co., 782 F.2d 159, 167 (Fed. Cir. 1986).
30
Id.
31
Id.
32
Studiengesellschaft Kohle, m.b.H. v. Dart Indus., 666 F. Supp. 674 (D. Del. 1987), aff'd, 862 F.2d 1564
(Fed. Cir. 1988).
33
Id. at 696.
34
Stryker Corp. v. Intermedics Orthopedics, Inc., 96 F.3d 1409, 1415 (Fed. Cir. 1996).
27
7
technological and commercial significance of Suessen's patent rights . . . put Schubert on notice
to exercise due care prior to initiating any activity which had the possibility of infringing."35 This
language suggests that more than simple knowledge of the existence of a patent is required to
trigger an affirmative duty to investigate.
However, in Stryker Corp. v. Intermedics Orthepedics, Inc., there was testimony from inhouse counsel, Mr. Merkling, that he was not aware that the patent raised infringement
concerns.36 The Federal Circuit apparently placed little weight on Merkling's own testimony as
he was responsible for intellectual property affairs at Intermedics.37 Merkling was asked by one
of Intermedics' product development managers, to consider a brochure describing a device where
the brochure was marked "U.S. Patent Pending."38 Merkling thereafter saw reference to the
infringed patent in the Official Gazette of the United States Patent Office, and ordered a copy of
the infringed patent, which he denied ever actually receiving.39 Based on these facts, the Federal
Circuit was unwilling to overturn the district court's finding that Merkling, and therefore
Intermedics, had actual notice of the infringed patent.40
The Federal Circuit's affirmance of Stryker at least leaves open the possibility that notice
of a particular infringement concern may not be necessary in finding that actual notice of a patent
exists. Thus, a corporation is not likely to avoid a finding of willfulness if it becomes aware of a
patent, and thereafter refuses or neglects to investigate its scope. No case has directly held that
actual notice requires knowledge that the patent raises a particular infringement concern.
3. Who Has the Knowledge?
What relationship must exist between the person with knowledge of the patent and the
corporation, such that knowledge may be imputed to the corporation? As demonstrated in Stryker,
notice to in-house counsel is sufficient to impute the knowledge to the corporation. Notice of a
patent by outside counsel is also enough to trigger a duty to investigate.41 In Braun Inc. v.
Dynamics Corp., Waring's (a division of Dynamics Corp.) patent attorney conducted a search at
Waring's behest.42 This search uncovered Braun's patent.43 While the subsequent actions of
Waring's patent attorney were sufficient to avoid a finding of willfulness, knowledge of Braun's
patent was imputed to Waring.44 In Total Containment v. Buffalo Environmental Products Corp.,
one of the corporation's designers having knowledge of the infringed patent was sufficient to
impute knowledge to the corporation.45 Thus, it appears that knowledge will be imputed to the
corporation if a person in a position of responsibility, in the employ of the corporation, gains
knowledge of a competitor's patent rights.46
The affirmative duty rule, combined with the low notice trigger make it all but necessary
for potential infringers to obtain a competent opinion from outside patent counsel if one hopes to
avoid a finding of willfulness in a patent infringement suit. This obligation is further complicated
by the adverse inference rule.
35
Spindelfabrik Suessen-Schurr v. Schubert & Salzer, 829 F.2d 1075, 1084 (Fed. Cir. 1987).
Stryker, 96 F.3d at 1415.
37
Id. at 1416.
38
Id. at 1415.
39
Id. at 1416.
40
Id.
41
See Braun, Inc. v. Dynamics Corp. of Am., 975 F.2d 815, 823 (Fed. Cir. 1992).
42
Id.
43
Id.
44
Id.
45
See Total Containment v. Buffalo Envtl. Prods. Corp., 35 U.S.P.Q.2d 1385, 1390 (E.D. Va. 1995).
46
Great N. Corp. v. Davis Core & Pad Co., 782 F.2d 159, 167 (Fed. Cir. 1986) (finding knowledge by the
president of the corporation sufficient to impute knowledge to the corporation).
36
8
C.
The Adverse Inference Rule
If an accused infringer chooses not to avail himself of the advice of counsel defense, the
Federal Circuit permits the court to infer either that no opinion was sought, or that the result of
the opinion was negative.47 In Kloster Speedsteel AB v. Crucible, Inc., the defendant, "in alleged
reliance on the attorney-client privilege," remained silent about whether it had obtained the
advice of counsel upon notification of the infringed patent.48 The Federal Circuit stated that this
warranted "the conclusion that it either obtained no advice of counsel or did so and was advised
that its importation and sale of the accused products would be an infringement of valid U.S.
patents."49
The Federal Circuit has continued to uphold this adverse inference rule.50 In American
Medical Systems v. Medical Engineering Corp., defendant's in-house patent counsel rendered an
oral opinion that it was not infringing on the plaintiff's patent.51 At trial, the in-house counsel
withheld all of the documentary evidence he used in rendering his oral opinion, such as prior
patent searches and outside counsel opinions.52 The Federal Circuit stated that trial court
"properly drew a negative inference" from his actions.53
D.
Summary of the Current Doctrine of Willful Infringement
A finding of willfulness depends on whether the accused infringer had actual knowledge
of the patent, whether the accused infringer reasonably believed the patent-in-question was
invalid or not infringed, and whether the accused infringer thereafter acted in good faith.
According to the Federal Circuit, the test is one of the totality of the circumstances and there are
no hard and fast rules.54 Nonetheless, there exists a very low standard for when an accused
infringer will be deemed to have sufficient knowledge of a patent to trigger an affirmative duty to
investigate. Thereafter, there exists a high standard of behavior that practically mandates
competent legal assistance. This dichotomy is strengthened by the Federal Circuit each time it
lowers the bar with respect to the notice requirement, as it did in Stryker, or raises the bar with
respect to acceptable behavior of accused infringers, as it did in Underwater Devices and Kloster
Speedsteel. As this dichotomy has grown, so too has the criticism.
Section 3.
Proposed changes by commentators55
As demonstrated above, the current state of the law indicates a very low standard for
triggering the duty to investigate, and a high standard for avoiding willfulness once that duty is
triggered. This growing dichotomy in the current doctrine has resulted in criticism by a number of
commentators. This is well described in several recent articles by William C. Rooklidge and
47
E.g., Kloster Speedsteel AB v. Crucible, Inc., 793 F.2d 1565, 1579 (Fed. Cir. 1986).
Id. at 1580.
49
Id.
50
Am. Med. Sys., Inc. v. Med. Eng'g Corp., 6 F.3d 1523, 1531 (Fed. Cir. 1993); Fromson v. W. Litho Plate
& Supply Co., 853 F.2d 1568, 1572-73 (Fed. Cir. 1988).
51
Am. Med. Sys., 6 F.3d at 1531.
52
Id.
53
Id.
54
Read Corp. v. Portec, Inc., 970 F.2d 816, 827 (Fed. Cir. 1992).
55
Parts of this section are excerpted with the permission of George Mason Law Review from Jon E.
Wright, Comment, Willful Patent Infringement and Enhanced Damages—Evolution and Analysis, 10 GEO.
MASON. L. REV. 97 (2001).
48
9
Robert O. Bolan,56 by Edwin H. Taylor and Glenn E. Von Tersch,57 and by Matthew D. Powers
and Steven C. Carlson.58
The Rooklidge and Bolan articles focus their attack on the low and uncertain bar the
Federal Circuit has established with respect to the notice requirement.59 They advocate adopting
the agency standard to determine when knowledge of a patent will be imputed to the
corporation.60
The Taylor and Von Tersch article, in contrast, turns a critical eye to the high bar the
Federal Circuit has established with respect to actions required by potential infringers with notice
of a patent.61 They advocate a change to the treble damages statute that would, among other
things, require literal infringement before a finding of willfulness could be made.62
The Powers and Carlson article highlight the burden on both companies trying to comply
with the current standard, as well as the burden put on attorneys. They raise four pertinant issues
regarding the doctrine of willful infringement as currently implemented and recommend (1)
limiting the liability for increased damages to cases involving deliberate copying; (2) abandoning
the affirmative duty and negative inference rules; (3) establishing privilege waiver guidelines for
opinions used in litigation; and (4) defering a determination on willfulness until a post-appeal
hearing to the court.63
The following sections summarize these articles.
A.
Rooklidge and Bolan—Adopt the Agency Standard for Knowledge
The gist of Rooklidge and Bolan's criticism surfaces in two articles. The first article,
written in 1996, identifies deficiencies in the standard the courts use for imputing knowledge of
employees to the corporation in patent infringement cases. Rooklidge and Bolan recommend
applying the agency standard for notice to these cases. The second article, written in 1997,
responds critically to the Federal Circuit's affirmance of Stryker Corp. v. Intermedics
Orthopedics, Inc.64 Rooklidge and Bolan believe the district court and the Federal Circuit missed
an opportunity to apply the agency standard for notice.65 Indeed, they state that the court failed to
identify any standard at all for deciding when employee knowledge should be imputed to the
employer corporation.66
56
See Robert O. Bolan & William C. Rooklidge, Imputing Knowledge to Determine Willful Patent
Infringement, 24 AM. INTELL. PROP. L. ASS'N. Q. J. 157 (1996) [hereinafter Bolan, Imputing Knowledge];
William C. Rooklidge & Robert O. Bolan, The Official Gazette and Willful Patent Infringement: Stryker
Corp. v. Intermedics Orthopedics, Inc., 79 J. PAT. & TRADEMARK OFF. SOC'Y 605 (1997) [hereinafter
Rooklidge, Official Gazette].
57
Edwin H. Taylor & Glenn E. Von Tersch, A Proposal to Shore Up the Foundations of Patent Law That
the Underwater Line Eroded, 20 HASTINGS COMM. & ENT. L.J. 721 (1998).
58
Matthew D. Powers and Steven C. Carlson, The Evolution and Impact of the Doctrine of Willful Patent
Infringement, 51 SYRACUSE L. REV. 53 (2001).
59
See Bolan, Imputing Knowledge, supra note 54; Rooklidge, Official Gazette, supra note 54.
60
See Bolan, Imputing Knowledge, supra note 54; Rooklidge, Official Gazette, supra note 54.
61
See Taylor & Von Tersch, supra note 54.
62
Id. at 741.
63
Id.
64
Stryker Corp. v. Intermedics Orthopedics, Inc., 891 F. Supp. 751 (E.D.N.Y. 1995), aff'd, 96 F.3d
1409 (Fed. Cir. 1996).
65
Rooklidge, Official Gazette, supra note 137, at 607.
66
Id. at 624.
10
Rooklidge and Bolan are concerned that the knowledge of employees related to patents is
too easily imputed to the corporation.67 They posit that, under the current standard, "the result is
that corporations whose employees use patent information may face a significantly higher risk of
exposure to willful infringement penalties than those that do not."68 This, in turn, has the
potential of frustrating disclosure as these corporations could subsequently limit their employees'
use of, and exposure to, patent information.69 As a possible solution, Rooklidge and Bolan
propose adopting the agency standard for knowledge.70 Under their analysis, this standard sets
out three requirements for knowledge of an employee to be imputed to the employer corporation:
"that the employee had actual notice, that the employee knew the knowledge was important, and
that the employee had a duty to convey the knowledge to the corporation."71
"Under this standard, an employee's knowledge of a patent should be imputed to the
corporation only when that employee has acquired actual notice of the patent, understands the
importance of the patent, and has a duty to communicate his or her knowledge to the
corporation."72 Rooklidge and Bolan argue that this standard is "an appropriate mechanism for
determining willfulness in patent infringement cases" because it strikes an "appropriate . . .
balance between the need to advance technology and the need to encourage respect for the rights
of inventors whose very acts of disclosure make possible the advances."73
In sum, Rooklidge and Bolan argue that the current standard is too uncertain. This
uncertainty, when combined with the rules established in Underwater Devices and Kloster
Speedsteel, too readily leads to findings of willful infringement. They claim that this result has
the unintended consequence of chilling one of the primary goals of the patent system--the
investigation and utilization of patents.74 Rooklidge and Bolan therefore recommend adopting the
agency standard of knowledge to impose predictability, and provide a time-tested body of
precedent to the doctrine of willful infringement.75
B.
Taylor and Von Tersch—Change the Statute
Taylor and Von Tersch's criticism surfaces in their 1998 article, A Proposal to Shore Up
the Foundations of Patent Law that the Underwater Line Eroded.76 The authors examine the
doctrine of willful infringement and identify six separate criticisms of the current standard.77
First, Taylor and Von Tersch argue that the current standard "discourages those most
concerned with the art from reading patents."78 Like Rooklidge and Bolan, Taylor and Von
Tersch criticize the Federal Circuit's apparent stance that potential infringers are put on notice
merely by reading a patent, and therefore have an affirmative duty to avoid infringing activity.
Second, as a corollary to this first criticism, they state that if the law does discourage the
reading of patents, then the law also acts as a detriment to inventors.79 Patents are less likely to
be discovered and put to productive use either under a licensing agreement, or as the creative
spark to generate new technology.80
67
See Bolan, Imputing Knowledge, supra note 54, at 160.
Id. at 161.
69
See id.
70
Id. at 184.
71
Id. at 186.
72
Rooklidge, Official Gazette, supra note 54, at 624.
73
Id.
74
Bolan, Imputing Knowledge, supra note 54, at 160.
75
Id. at 161.
76
See Taylor & Von Tersch, supra note 55.
77
Id. at 737-40.
78
Id. at 737.
79
Id.
80
Id.
68
11
Third, Taylor and Von Tersch argue that the current doctrine of willful infringement
causes prejudice at trial. It does so in the following three ways: (1) the best defense to willful
infringement, the good faith reliance on opinion of counsel, requires a waiver of attorney-client
privilege; (2) the issue of willfulness, with a potential award of treble damages, dominates the
trial; and (3) there appear to be no adverse consequences for pleading willfulness without merit.81
Fourth, the authors argue that the doctrine causes wasted resources in legal opinions. It
does so in the following three ways: (1) many defenses to the allegation of patent infringement
are known only to the patentee; (2) reliable patent opinions can be very expensive;82 and (3)
individual inventors can wreak havoc on large corporations with a mere letter.83
Fifth, Taylor and Von Tersch argue that the current doctrine also wastes resources in
litigation. An allegation of willful infringement occurs in eighty-seven percent of all patent cases.
Each time, the allegation must be addressed--"making patent litigation for the parties a 'sport of
kings.'"84
Lastly, Taylor and Von Tersch argue that uncertainty under the current standard could
chill a corporation's actions with respect to future projects. This leads to economic inefficiency as
"investors . . . may lose out on long-term profits, and workers . . . may not be able to pursue
rewarding and challenging opportunities."85
Taylor and Von Tersch's proposal to alleviate some of these problems involves revising
section 284 of the Patent Act.86 In particular, they recommend revising the second paragraph of
section 284 to read:
When the damages are not found by a jury, the court shall assess them. In either event the
court may increase the damages up to three times the amount found or assessed if the court finds
clear and convincing evidence of willful infringement. Willful infringement shall require literal
infringement without reliance on equivalency and shall require either (1) actual notice with a
reasonable time to study the patent prior to litigation by a patent owner of the products or
methods that infringe specified claims of a patent, or (2) clear and convincing evidence of
copying of a product marked in accordance with the requirements of section 287 of this code.87
This proposal changes the current doctrine in two very important ways. First, willful
infringement would require literal infringement. Literal infringement occurs when the accused
device or method is exactly the same as one or more claims in the patent. This would eliminate all
infringement cases relying on the doctrine of equivalents from findings of willfulness.88 Second,
the change clarifies the notice requirement in that notice must either come directly from the
patent holder, or from a product marked according to section 287 of the Patent Act. Under this
standard, if an infringer became aware of another's patent rights through his own efforts, he could
not be charged with willful infringement on that knowledge alone.
81
Id. at 738-39.
Id. at 739-40. Taylor and Von Tersch state that a reliable opinion costs at least ten thousand dollars, and
could run as high as one hundred thousand dollars for a set of submarine patents. Id. at 740.
83
Id. at 740. Taylor and Von Tersch recount a story of Messrs. Lemelson and Hyatt putting at least one
hundred companies on notice of patents having several hundred claims and applications dating back, in one
instance, to the 1950s.
84
Id.
85
Id.
86
Id. At 741.
87
Id.
88
The doctrine of equivalents prevents accused infringers from avoiding liability by making minor or
insubstantial changes to their product that would remove it from the literal scope of the patent claims. See
Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17 (1997).
82
12
Taylor and Von Tersch go on to explain the positive effects of their proposed statutory
change.89 First, "reading patents will not be a dangerous sport."90 They argue that the chill on the
disclosure process will be lifted.91 Additionally, forcing patent owners to notify infringers of
their liability will remove liability for willfulness when corporations investigate technologies and
attempt to design around current patents.92 As a corollary to this effect, inventors will benefit by
increased exposure of their patents.93 Second, the statutory change clarifies which infringing
activities will be characterized as willful.94 As explained above, only literal infringement will be
subject to treble damages. Third, Taylor and Von Tersch argue that the statutory change will
lessen the prejudicial effect of willfulness allegations at trial.95 It will accomplish this, quite
simply, by providing a clearer, bright-line rule. They surmise that "litigation will concentrate
more on whether actual infringement occurred instead of whether the infringer intended to
infringe."96 Moreover, Taylor and Von Tersch argue, the statutory change will eliminate wasted
legal resources.97 Corporations will be able to direct their time and resources to traditional
business interests, rather then spending time and money figuring out whether a patent is invalid.98
Lastly, Taylor and Von Tersch believe that the proposed change clarifies the notice requirement.99
This allows corporations to focus their time and effort on patents brought to their attention, and
allows investors to better understand a corporation's liability.100
C.
Powers and Carlson—Abandon the Affirmative Duty and Adverse Inference Rules
Powers and Carlson’s article provides the most recent criticism and is evidence that the
pernicious effects of the current doctrine of willfulness are growing. Powers and Carlson pose
four pertinent questions raised by the courts application of enhanced damages to parties in a
patent dispute.101
First, they question the extent to which the threat of treble damages drives the parties
behavior during a patent dispute.102 They rely on the experience of Judge Mary Pat Thynge, a
Magistrate Judge of the U.S. District Court of Delaware. Judge Thynge has considerable
experience in mediating patent disputes. According to Powers and Carlson, Judge Thynge
indicates that “overwhelmingly, settlement discussions focus on the threat of the permanent
injunction” and that this, rather than the threat of treble damages, is the “hammer” that motivates
settlement.103 Parties are primarily concerned with a business solution under the threat of
permanent injunction, not treble damages for willfulness. Thus, Powers and Carlson conclude
that “it seems likely that the law of willful infringement provides a superfluous remedy to the
patentee, at least in those cases where the defendant did not design its accused product based on
the patentee’s technology.”104
89
Taylor & Von Tersch, supra note 55, at 742.
Id.
91
Id.
92
Id.
93
Id.
94
Id. at 743
95
Id.
96
Id.
97
Id.
98
Id.
99
Id. at 743-44.
100
Id.
101
See Powers & Carlson, supra note 56, at 100.
102
Id.
103
Id.
104
Id. at 101.
90
13
Second, Powers and Carlson question whether it is worth the cost to fully investigate
allegations of patent infringement made by a competitor.105 They cite the cost of an opinion by
outside counsel as being at least $20,000 and frequently over $100,000 for complicated matters.
They note that companies, such as the infringer in Underwater Devices, may literally receive
hundreds of allegations of patent infringement annually. While larger companies may have the
internal resources to investigate all such allegations, smaller or start-up companies, who rely only
on outside counsel, do not. Powers and Carlson also correctly assert that “patents are notoriously
hard to interpret, and the outcome of patent litigation is equally hard to predict.” 106 Indeed, until
the court issues its claim construction opinion pursuant to a Markman hearing, the true
enforceable scope of a patent is essentially unknown. Given the increasing complexity of modern
technology, and the uncertainty inherent in determining the enforceable scope of patent rights,
Powers and Carlson conclude that it is becoming at the same time increasingly costly, and less
productive to investigate the scope and validity of a competitor’s patent rights.107
Third, Powers and Carlson question whether the opinion letter should be crux upon which
the issue of willfulness turns. 108 They assert that the affirmative duty rule and the adverse
inference rule combine to produce both “false positive” and “false negative” findings of
willfulness.109 “False positives” arise when companies acting good faith fail to obtain a written
opinion after notice because of either ignorance of the standard, or cost considerations. Their
behavior may not warrant a finding of willfulness, yet the jury would be permitted, under the
current standard, to find the infringement willful. “False negatives” arise where the “litigationsavy” competitor misappropriates a patentee’s technology, but skillfully avoids willfulness with a
carefully crafted exculpatory written opinion.
Finally, Powers and Carlson question whether the affirmative duty rule chills the attorney
client relationship.110 A party relying on the advice of counsel defense to willful infringement
“must assume that the patentee will seek discovery of documents that would otherwise be
protected under the attorney-client privilege.”111 Powers and Carlson point out that courts are
currently divided as to the scope of waiver of this privilege in this context. This uncertainty, they
assert, “creates a pernicious situation” because “sophisticated parties undoubtedly restrict the
scope of their relationship with their lawyers, and expect their lawyers to prepare only
exculpatory opinions.”112 They conclude that the likely result “is that attorneys are less free to
counsel their clients, at least in writing, about the risk of their conduct.”113
Powers and Carlson suggest three proposals that would serve to improve resolution of
willfulness disputes.114 First, they suggest that liability for enhanced damages be limited to cases
that involve deliberate copying.115 They point out that this is entirely consistent with the history
of the treble damages statute and closer its intended meaning. Second, Powers and Carlson
105
Id. at 102.
Id. at 102-03.
107
Id. at 104.
108
Id.
109
Id. at 104-05.
110
Id. at 105.
111
Id.
112
Id.
113
Id.
114
Id. at 106.
115
Id.
106
14
suggest abandonment of both the affirmative duty rule, and the negative inference rule.116 They
point out that “the legal foundation for the affirmative duty and negative inference rules is
tenuous.”117 Moreover, their effect is highly prejudicial to accused infringers because they all but
force them to establish their good faith by using the advice of counsel defense. Third, Powers
and Carlson advocate establishing clear privilege waiver guidelines so the attorney-client
communications are not compromised or chilled.118
Section 4.
A Few Thoughts of Our Own
A. The Law of Willful Infringement Must be Interpreted to Effect Behavior Most Likely to
Result in Innovation
The Commentators have provided necessary and brilliant insight to the difficulties that
companies of all sizes have as they grapple with the issue of willful infringement. Distilled to its
essence, the gestalt of the Patent Law must be engineered to reward behaviors that encourage
innovation and must discourage behavior that retards innovation. One of the legal developments
which is most antithetical to the purpose of the patent system occurs when an infringer becomes
aware of its own ongoing patent infringement. An infringer in this position has four options.
Under Option 1, the infringer can gather up the infringing product, pile it in the middle of
a parking lot, and light the pile on fire (in an environmentally friendly manner). This is the option
that is advocated by some members of the Patent Bar. It is not an option that serves the purpose
of the patent laws. As a matter of law and economics, a company is not likely to voluntarily
destroy an infringing product. More importantly, it does not serve the public interest for a
company to reverse productivity in the name of the patent system.119
Option 2 is for the infringer to ask a patent lawyer to write an “insurance policy” against
a finding of willful infringement. Whether we like to discuss this topic in public, it is one that
must be addressed. Any infringer can find a lawyer who is willing to sign his or her name on the
bottom of an opinion of counsel. Moreover, Federal District Courts are reluctant to defenestrate
an opinion written by an outside counsel. Rarely does a lawyer turn away a $20,000 – 100,000
project in favor of a $100 telephone call telling the client that they infringe. In short, option 2 is
for a company who knows it infringes to commission a patent lawyer to develop theories that
both the infringer and the lawyer know to be incorrect. Most patent lawyers vehemently deny
that lawyers and clients would tacitly conspire in this unsavory behavior. One thing is not
deniable. The current system of laws as interpreted by the Federal Circuit virtually mandates the
above- described behavior. This behavior must be discouraged. Obtaining true and accurate
advice of counsel should and must be encouraged. However, lawyers who write opinions which
are to be used as a defense to willful infringement are not neutral, they are advocates. They are
advocates because their job is not to provide honest legal advice; their job is to avoid a result that
would require that their client pay treble damages.
116
Id. at 108.
Id.
118
Id. at 108-09.
119
The fundamental right provided by the patent laws is the right to exclude. We are not suggesting that
this be changed. However, when considering the behavior that society wishes to encourage, a voluntary
destruction of goods should not be a requirement to avoid willful infringement. Indeed, it is probably better
for society if the infringer is allowed to sell-through its inventory in the case where the products were made
without knowledge of the patent as outlined in the hypothetical fact pattern.
117
15
Option 3 is for an infringer to continue to sell its current product and ignore the potential
patent problem. A company who engages in this takes a risk. The risk is that ultimately it will be
accused of patent infringement and that the patent owner will secure an injunction and damages.
Does the behavior described in Option 3 describe willful infringement? Under the current
interpretation of the law, the answer is yes. This interpretation is flawed. The Taylor and Von
Tersch paper makes a brilliant observation. Namely, that many defenses to patent infringement
are known only to the patent owner. If a patent is invalid, and the patent owner knows it is
invalid, the patent owner may elect not to enforce its patent.120 Surprisingly, if a patent owner
knows that a claim of its patent is invalid, he has no obligation to inform the public. Instead the
law provides that the patent owner may disclaim a portion of the patent. Such disclaimer is not
only permissive but may also require that the patent owner pay a fee to the U.S. Patent and
Trademark Office.121 Even more importantly, the patent owner always has one precious piece of
information that is known only to the patent owner. Namely, only the patent owner knows
whether the patent owner has any intentions of enforcing the patent. It could be argued that if a
patent owner does not have the intent to enforce the patent, use of the invention is not
unauthorized. Therefore, before a company can actually know whether its acts are ones of
infringement (defined as the unauthorized practice of an invention), the infringer must know that
the patent owner objects to the behavior of the company.
Option 4 is the preferred behavior but is a behavior that may not be rewarded under the
current state of the law. An infringer when faced with the problem of infringement can continue
its behavior with respect to its current product but take reasonable steps to design around the
patent for future products. The infringing company is eliminating its own risk for an injunction, it
is not hurting itself or its employees, and it is taking steps to be an innovator itself by designing
around the patent. From the perspective of public policy, the continuing sale of infringing
products is innovation neutral. Under this hypothetical, a hypothetical which is extremely
common, the infringer made the product without knowledge of the patent. Therefore, the
infringer was not required to be an innovator. Whether the product is sold or destroyed, there has
been no innovation.
B.
The Relationship between the Marking Statute and Willful Infringement
The patent laws require that a patent owner “mark” its products with a patent number.
The failure to mark carries with it a serious penalty. Namely, if the patent owner does not mark
its product with the patent number, it is not entitled to damages prior to the time that the infringer
was put on actual notice of the patent by the patent owner. Naturally, if the patent is a method, a
method cannot be marked. Therefore, if the patent is a process patent, there is no marking
requirement and damages for infringement are measured from the date that the infringement
began. The marking statute is designed to protect the unsuspecting infringer. Specifically, there
is nothing improper about copying. A company is free to copy its competitors products as long as
there is no intellectual property in the copied product. Normally such intellectual property comes
in the form of patents, design patents, and trade dress. If a product is not marked, the patent
owner cannot collect damages because its own inaction may have duped an unsuspecting
competitor into infringing by copying what the competitor thought was an unprotected product.
120
The patent owner may even mark its product with the patent number with impunity.
35 U.S.C. § 253 states that a “[p]atentee …may, on payment of the fee required by law, make disclaimer
of any complete claim, stating therein the extent of his interest in such patent.”
121
16
For the period prior to actual notice, when there are no damages, there can nevertheless
be a finding of willful infringement. Under the current law, the issue of willful infringement is
de-coupled from the question of damages. In other words, a Court can find willful infringement
occurred during a time period when no damages can be recovered because the patent owner failed
to mark its product with a patent number. While at first blush it may seem inconsequential that a
Court makes a finding of willfulness for a time period when damages cannot be award, there are
two major implications with such a finding. Beyond trebling of damages, Courts seem to be
inclined to find a case “exceptional” when there is willful infringement. Such a finding results in
attorney fees being awarded to the patent owner. In addition, willful infringement may not be
curable so that trebling of damages will begin when damages are awarded.
While not currently the law, it makes sense that if a patent owner is going to receive a
windfall in the form of treble damages and attorney fees, that the patent owner must accept
certain responsibilities. Namely, at an absolute minimum, if a patent owner objects to the
copying of its patented product, it should mark its product with a patent number. The punishment
imposed by the willful infringement statute should not be awarded to a coconspirator in the
infringement. If the patent laws are to promote innovation, the patent owners must proclaim to
the world that the copying of their products is unauthorized.
A better view is that there can be no willful infringement until the patent owner gives the
infringer actual notice of infringement. It is this solution alone that gives companies unfettered
access to the knowledge contained in patents without unduly restricting the remedies afforded to a
patentee. The patentee, if not vigilant, may not be awarded treble damages but nevertheless is
made whole by the patent laws. The patentee merely loses the windfall until such time that it
notifies the infringer that the actions of the infringer are unauthorized. The requirement of actual
notice recognizes the principle that there can be no infringement if the activity is permitted by the
patent owner. It is the patent owner alone who is in possession of this information.
A requirement for such actual notice by the patent owner may raise concerns that the
patent owner is exposing itself to a potential declaratory judgment action by the infringer.
However, as with, the actual notice provision of 35 U.S.C. § 287, a patent owner may give
“actual notice” of its patent rights without exposing itself to a declaratory judgment action.122
Thus, setting the standard for notice regarding willful infringement consistent with the alreadyestablished standard of section 287 provides consistency for patent owners and competitors.
Section 5.
Public Policy Reasons Why Change Is Needed
The uncertainty is very real over whether a company can review the patents of its
competitors without then performing an indepth analysis of the uncovered patents and preparing
opinions of counsel. This uncertainty needs to be eliminated so that competitors can utilize the
information dissemination function of the patent system without risk of willful patent
infringement. The current state of the law is so problematic that otherwise prudent management
is being forced to remain ignorant of the patent estates of their competitors. This does not foster
healthy competition and ultimately progress in technology and benefits to consumers.
The question then posed is how this change can best be made? Should it be by legislation
or should it be by court decision? One could envision a case coming before the Federal Circuit
122
See, e.g., Indium Corp. of America v. Semi-Alloys, Inc., 781 F.2d 879 (Fed. Cir. 1985), cert. denied,
479 U.S. 820 (1986) (the declaratory judgment defendant's acts of sending a letter offering a license and of
filing suit against other firms seven years earlier did not establish a basis for declaratory jurisdiction).
17
having a fact pattern close enough to provide a vehicle for this change, but such a case would
have to be heard en banc since it would involve overturning prior decisions. The Federal Circuit
very rarely takes a case en banc, but instead hears it on rehearing. Thus the chance of the Federal
Circuit making the needed changes in any reasonable timeframe is problematic.
Legislation thus seems to be the better option. A specific technical amendment to
Section 284 may be the best approach along the lines advocated by Messrs. Taylor and Von
Tersch. However, it is hard to fathom who will lead such a legislative initiative in Congress.
Large companies with substantial lobbying budgets would be the first candidates, but as discussed
above, they have been able to adapt to the status quo either by incurring the costs of the current
regime or by using their large patent portfolios for mutual deterrence. Emerging companies and
individuals need the relief the most, but they have the least amount of resources to devote to this
change.
So perhaps an advocate will emerge. It will take an individual or entity to galvanize
public perception of the problem and muster Congressional support. The benefits to the public
and the patent system will be significant. But this problem has existed for more than a decade so
there is a real inertia for change. But change is needed, and needed now, so that the patent system
in the United States will really foster the exchange of information contained in patents.
18