5 Nature of Patent Rights and Infringement

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1. Patent Rights

Patents are issued in the name of the United States under the seal of the United States Patent and Trademark Office. The patent contains a grant to the patentee, and a printed copy of the specification and drawing is annexed to the patent and forms a part of it. The grant confers “the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States” and its territories and possessions. The term of the patent is generally 20 years from the date on which the application for the patent was filed in the United States or, if the application claims priority to an earlier filed application, from the date the earliest such application was filed and subject to the payment of maintenance fees as provided by law.

A maintenance fee is due 3.5, 7.5 and 11.5 years after the original grant for all patents issuing from the applications filed on and after December 12, 1980. The maintenance fee must be paid at the stipulated times to maintain the patent in force. After the patent has expired anyone may make, use, offer for sale, sell, or import the invention without permission of the patentee, provided that matter covered by other unexpired patents is not used. The terms may be extended for certain pharmaceuticals and for certain circumstances as provided by law.

The exact nature of the rights conferred must be carefully distinguished, and the key is in the words “right to exclude” in the phrase just quoted. The patent does not grant the right to make, use, offer for sale, sell, or import the invention. Instead, the patent grants the exclusive nature of the right. Any person is ordinarily free to make, use, offer for sale, sell, or import anything he or she pleases, and a grant from the government is not necessary. The patent only grants the right to exclude others from making, using, offering for sale, selling, or importing the invention. Since the patent does not grant the right to make, use, offer for sale, sell, or import the invention, the patentee’s own right to do so is dependent upon the rights of others and whatever general laws might be applicable. A patentee, merely because he or she has received a patent for an invention, is not thereby authorized to make, use, offer for sale, sell, or import the invention if doing so would violate any law.

An inventor of a new automobile who has obtained a patent thereon would not be entitled to use the patented automobile in violation of the laws of a state requiring a license, nor may a patentee sell an article—the sale of which may be forbidden by a law—merely because a patent has been obtained.

Neither may a patentee make, use, offer for sale, sell, or import his or her own invention if doing so would infringe the prior rights of others. A patentee may not violate the federal antitrust laws, such as by resale price agreements or entering into combination in restraints of trade, or the pure food and drug laws by virtue of having a patent. Ordinarily there is nothing that prohibits a patentee from making, using, offering for sale, selling, or importing his or her own invention, unless he or she thereby infringes another’s patent that is still in force. For example, a patent for an improvement of an original device already patented would be subject to the patent on the device.

2. Infringement of Patents

Infringement of a patent consists of the unauthorized making, using, offering for sale, or selling any patented invention within the United States or U.S. Territories, or importing into the United States of any patented invention during the term of the patent. If a patent is infringed, the patentee may sue for relief in the appropriate federal court. The patentee may ask the court for an injunction to prevent the continuation of the infringement and may also ask the court for an award of damages because of the infringement.

In such an infringement suit, the defendant may challenge the validity of the patent, which is then decided by the court. If the defendant successfully establishes that the asserted patent(s) is invalid (e.g., at the time it was filed, the claimed invention was not novel or was obvious), the defendant will win the case, as you cannot infringe an invalid patent. The defendant may also argue that what they are doing does not constitute infringement. Infringement is determined by the language of the claims of the patent and, if what the defendant is making does not fall within the language of any of the claims of the patent, there is no literal infringement.

Suits for infringement of patents follow the rules of procedure of the federal courts. From the decision of the district court, there is an appeal to the Court of Appeals for the Federal Circuit. The Supreme Court may thereafter take a case by writ of certiorari. If the United States Government infringes a patent, the patentee has a remedy for damages in the United States Court of Federal Claims. The government may use any patented invention without permission of the patentee, but the patentee is entitled to obtain compensation for the use by or for the government.

The Patent Office has no jurisdiction over questions relating to infringement of patents. That authority lies solely with the courts. In examining applications for patent, the Patent Office makes no determination as to whether the invention sought to be patented infringes any prior patent. An improvement invention may be patentable, but it might infringe a prior unexpired patent for the invention improved upon, if there is one.

3. Assignments and Licenses

A patent is personal property and may be sold to others or mortgaged; it may be bequeathed by a will; and it may pass to the heirs of a deceased patentee. The patent law provides for the transfer or sale of a patent, or of an application for patent, by an instrument in writing. Such an instrument is referred to as an “assignment” and may transfer the entire interest in the patent. The assignee, when the patent is assigned to him or her, becomes the owner of the patent and has the same rights the original patentee had.

The statute also provides for the assignment of a part interest, that is, a half interest, a fourth interest, etc., in a patent. There may also be a grant that conveys the same character of interest as an assignment but only for a particularly specified part of the United States. A mortgage of patent property passes ownership thereof to the mortgagee or lender until the mortgage has been satisfied and a retransfer from the mortgagee back to the mortgagor (i.e., the borrower) is made. A conditional assignment also passes ownership of the patent and is regarded as absolute until canceled by the parties or by the decree of a competent court.

4. Recording of Assignments

The Office records assignments, grants, and similar instruments sent to it for recording, and the recording serves as notice. If an assignment, grant, or conveyance of a patent or an interest in a patent (or an application for patent) is not recorded in the Office within three months from its date, it is void against a subsequent purchaser for a valuable consideration without notice, unless it is recorded prior to the subsequent purchase.

An instrument relating to a patent should identify the patent by number and date; the name of the inventor and title of the invention as stated in the patent should also be given. An instrument relating to an application should identify the application by its application number and date of filing, the name of the inventor, and title of the invention as stated in the application should also be given. Sometimes an assignment of an application is executed at the same time that the application is prepared and before it has been filed in the Office.

Such assignment should adequately identify the application by its date of execution, inventor, and title of the invention so that there can be no mistake as to the application intended. If an application has been assigned and the assignment has been recorded or filed for recordation, the patent will be issued to the assignee as owner so long as the name of the assignee is provided when the issue fee is paid and the patent is requested to be issued to the assignee. If the assignment is of a part interest only, the patent will be issued to the inventor and assignee as joint owners.

5. Joint Ownership

Patents may be owned jointly by two or more persons as in the case of a patent granted to joint inventors, or in the case of the assignment of a part interest in a patent. Any joint owner of a patent, no matter how small the part interest, may make, use, offer for sale, sell, and import the invention for his or her own profit provided they do not infringe another’s patent rights, and they may do so without regard to the other owners. Additionally, joint owners may sell their interest or any part of it, or grant licenses to others, without regard to the other joint owner, unless the joint owners have a binding contract that forbids them from doing so. It is accordingly dangerous to assign a part interest without a definite agreement between the parties as to the extent of their respective rights and their obligations to each other.

The owner(s) of a patent may grant licenses to others. Since the patentee has the right to exclude others from making, using, offering for sale, selling, or importing the invention, no one else may do any of these things without his or her permission.

A patent license agreement is in essence nothing more than a promise by the licensor not to sue the licensee. No particular form of license is required; a license is a contract and may include whatever provisions the parties agree upon, including the payment of royalties, etc.

The drawing up of a license agreement (as well as assignments) is within the field of an attorney at law. Such an attorney should be familiar with patent matters as well. A few states have prescribed certain formalities to be observed in connection with the sale of patent rights.