If someone uses your patented invention without your permission, you have the right to sue them for infringement. If you successfully sue for infringement, the defendant will have to take corrective measures to put matters right. There is likely to be a range of remedies available to you, and you need to know what might and what might not help in a particular situation. These differ from one jurisdiction to another, here our patent litigation attorney describes only the patent infringement remedies for the courts of England and Wales.
Types of remedies
Often, a client’s starting point will be financial compensation. If the defendant has unlawfully used your invention to make a profit, or has made sales that should have been yours, you will naturally feel that you are owed something: and the law will usually recognise this. However, there is another, more immediate, need, which is to stop the defendant doing what made you sue them in the first place. For this, you must ask the court to order the defendant to stop – to grant you an injunction against further infringements.
The courts also have powers to make a range of orders that are often important for repairing the damage caused by an infringer. The defendant can be ordered to deliver infringing articles up to you, for example, or the court can instruct it to destroy them.
You may also be entitled to a declaration that your patent is valid and has been infringed, and having that confirmation of its validity can be handy in the future. The judge can also give you a certificate of contested validity, if the defendant unsuccessfully challenged the validity of your patent.
Unsurprisingly, an injunction is the most common form of remedy in patent infringement proceedings. Stopping the infringement is usually the main reason for suing, unless the patent owner would be content to strike a deal and receive a royalty for the use of patented invention.
Injunctions come in two main types:
- Temporary injunctions may be granted if it is important to protect the patent owner against the consequences of the defendant’s acts in the period before a trial can take place. This period could be several years, and if a patent owner is suffering a huge loss of sales its very survival could depend on the judge ordering the defendant to stop immediately. If you do want a temporary injunction, you will have to undertake to pay compensation to the defendant if your claim is ultimately unsuccessful, so this is not something to go for unless the need is very pressing. In recent years judges are likely to order a speedy trial rather than order a temporary injunction.
- Permanent injunctions are part of the arrangements for disposing of the matter at the end of the trial, when the judge has made their decision. The precise terms of the injunction will be suggested by the parties, who might even agree on them, but ultimately are a matter for the judge. The defendant will have to stop what they were doing, but the wording might also cover not doing other similar activities that would infringe the patent.
Although the injunction will normally only cover the period during which the patent is in force, the courts will sometimes grant a so-called “springboard” injunction on the principle that once the patent does expire the defendant will be able to hit the ground running because they have prior, unfair, experience of working the technology which their competitors lack. The injunction might therefore last for a short period after the expiry of the patent, to ensure that competitors are not penalised for their good behaviour.
Damages or account of profits
Damages can be awarded when the patent owner has suffered financial loss. The purpose of an award of damages is to put the parties back in the situation they would have been in, had the infringement not taken place – the defendant loses their ill-gotten gains, paying them over to the claimant who should rightfully have earned them in the first place.
It is a basic principle that damages are a form of compensation, not punishment, so exemplary or additional damages may not be awarded. (Contrast this with copyright law, where additional damages are available in special cases.) So even if the defendant has made unfair profits, unless they are somehow translated into a loss to the claimant they will not be reflected in an award of damages.
However, the claimant is given the choice of going for an account of profits. Often this will yield a bigger award than damages. The choice does not have to be made at the outset (the original claim will usually ask for damages or an account of profits) and importantly the claimant can ask for evidence about the profits the defendant made before making a decision about which to go for.
The court determines the damages to be awarded by considering what amount the claimant needs to restore them to the position they should have been in: damages are compensatory only. The claimant has to prove that the loss has been suffered. The rule is that the court will be generous in its assessment, but won’t punish the defendant. If you have granted a licence over your patent, the measure of damages will be the lost royalty.
The defendant might argue that the claimant would have suffered the same damage had they competed fairly, without infringing, so overall no damage has been done: but this will not impress the judge. The compensation is due for what the defendant has actually done, irrespective of what it might have done.
Where the owner of the patent has exploited it by making and selling things rather than by licensing it, it can claim the profit on sales made by the defendant that it would otherwise have made itself. If the claimant had to reduce its price to compete against the infringer, its lost profits there can also be claimed. And if the defendant made sales that the claimant wouldn’t have made, it can claim a reasonable royalty.
Damages may also reflect the value of goods (known as “convoyed goods”) commonly sold with the patented goods. The principle can also extend to sales of spare parts and servicing after the patent has expired, and the court is also able to take into account “springboard” sales that the defendant is able to make because of technical advantages it obtained through its illegal acts while the patent was in force – in essence, unfairly stealing a march on its competitors who waited for the patent to expire before starting to make the products.
If the claimant prefers to ask for an account of profits, the assessment becomes a matter of collecting evidence about those profits and the considerations that apply to calculating damages don’t apply.
Many patent infringement cases are heard by the Intellectual Property Enterprise Court, but it cannot award more than £500,000 (whether damages or an account of profits is sought).
Delivery up or destruction of infringing goods
The infringer can be ordered to deliver goods that have been produced without consent to the patent owner. In some cases, this will also include the items that made the goods. Alternatively, the judge may make an order for destruction of infringing articles.
Declarations and certificates of contested validity
It is very common in patent infringement cases for the defendant not only to file a defence, but also to put in a counterclaim saying that your patent is invalid. Many patents do turn out to be invalid, or at least partly invalid (that is, in effect, wider than they should have been), and in court more time and resources can be devoted to questions of validity than was possible when the application was examined in the Patent Office.
If the defendant raises a validity challenge, and loses, you can ask the judge for a certificate of contested validity and you can also obtain a declaration that the patent is valid.
Award of costs
Although not a remedy in the same sense as financial awards and injunctions, it is always important to keep the eventual award of costs very much in mind in litigation. Indeed, costs awards often arise at interim stages in litigation, as the parties make applications to the judge on procedural issues. The basic principle in English law is that the losing party pays the winning side’s costs, but usually only if the costs have been reasonably incurred. If the winner’s lawyers have charged for a partner to do work that a trainee could have done, the lower rate is likely to be substituted; if the winner has delayed matters, or made unreasonable applications, these costs are likely to be disregarded.
In the Intellectual Property Enterprise Court, where many low-value patent cases are heard, the amount of costs that the judge can award are limited to £60,000. Moreover, there are limits to the amount that can be awarded for each stage of the litigation, so it is unlikely that an award will add up to the maximum. Whichever court you find yourself in, you can expect the eventual costs awarded to come out at about 70 per cent of the actual bill once the court has gone through all the expenditure to work out whether it was reasonable. If you instruct a low cost patent law firm will gain a real tactical advantage during litigation as you will have a real prospect of recovering a greater percentage of your costs.
There is nothing to say that you must go to court to obtain remedies for an infringement of your patent: the fact that you have that in reserve may encourage the defendant to come to the negotiation table.
A patent dispute could be settled by the parties negotiating an agreement for the defendant to license the patent, paying a royalty for the use of the invention in the future and (if appropriate) a sum to compensate the patent owner for prior infringements. Patent licences usually also cover secret know-how, so it may be possible to charge an enhanced royalty rate to reflect this.
In some rare cases, the patent owner might even negotiate the sale of the patent rights to the defendant to settle the infringement.
The courts have very effective remedies at their disposal, designed to prevent further infringements by the same defendant and to compensate the patent owner, but accessing these remedies is not a cheap matter and usually requires the assistance of a patent attorney. Our experienced team are available to help you every step of the way.