United States: Intellectual Property Protection and Defense

Last Updated: December 19 2014
Practice Guide by Brinks Gilson & Lione

A. Approaches to Intellectual Property Enforcement

If your intellectual property is being infringed upon, there are several options available to help you protect your rights. The basics of some these are outlined here.

1. Bringing a Lawsuit. The federal courts have exclusive jurisdiction over most patent, trademark, and copyright matters. State courts have subject matter jurisdiction over trade secret issues. However, trade secret matters are often heard in federal court because these courts may exercise supplemental jurisdiction when federal jurisdiction is otherwise proper. One example is in cases that also involve a dispute over patents, copyrights, or trademarks, or where diversity jurisdiction exists.

Patent, copyright, or trademark infringement actions may be filed in any local federal district court. As in any litigation, the filing attorney should ensure that the court has personal jurisdiction over the defendant(s). A case may be appealed to the CAFC in patent cases or, in trademark and copyright cases, to the Circuit Court of Appeals for the geographic area in which the district is located.

If the United States government infringes on a patent, the patentee has a remedy for damages in the U.S. Court of Federal Claims. While the government may use any patented invention without patentee permission, the patentee is entitled to obtain compensation for its use.

The USPTO issues patents and trademarks, but has no jurisdiction over questions relating to infringement.

2. Sending a Demand Letter. Before opting to sue, consider sending a letter to the suspected infringer demanding that infringement cease. Although a potential cost-saving measure, demand letters should be approached with caution since by sending such a letter you are likely to give the recipient standing to bring a declaratory judgment action. In such an action, the alleged infringer chooses the forum and typically asks the court to find that no infringement exists and that the patent is invalid and unenforceable.

3. Initiating an ITC Proceeding. The International Trade Commission (ITC) is a governmental agency with investigative powers that decides intellectual property disputes involving imported goods. ITC proceedings often are initiated by patent, copyright, and/or trademark owners who seek to stop the importation of products that infringe their intellectual property rights.

The ITC is attractive because it offers a quick remedy against infringing imports. Discovery is completed within a few months, a hearing on the merits occurs within approximately nine (9) months, and a ruling is issued approximately three (3) months after the hearing.

The ITC issues relief in the form of an exclusion order that bars importation of the infringing product. The U.S. Customs and Border Protection enforces the ITC's exclusion orders by prohibiting the entry of excluded imports at the U.S. border.

The ITC also may issue cease-and-desist orders that prohibit the sale or distribution of imports already within the United States. Monetary damages are not available.

4. UDRP Administered by ICANN. If someone is using your trademark in a domain name, the Uniform Dispute Resolution Policy (UDRP) administered by the ICANN may be available to resolve the dispute.

Under the UDRP, a trademark owner may pay a small fee to file a complaint online with an ICANN approved agency, and have one or more panellists determine whether the complained of use is improper. There is very little expense involved because there is no evidential or oral presentation. The panelists have the power to transfer the domain name to the trademark owner, and the losing party may file a lawsuit to challenge the result within ten (10) days of the panelists' decision.

B. Challenges to Intellectual Property Protections

1. Administrative Proceedings Involving Patents. A patent re-examination or other review proceeding may be an attractive option for an accused infringer. Anyone may request that the USPTO reexamine or review a patent to determine whether the subject invention is patentable. The requester typically submits prior patents and printed publications to the USPTO that call into question the novelty and non-obviousness of the patent subject matter.

Under certain circumstances an accused infringer may be able to provoke an interference proceeding. If a pending patent application includes the same subject matter as the patents-in-suit, an interference may be provoked and the USPTO may undertake an investigation to determine whether the patentee or the patent applicant should obtain priority.

2. Administrative Proceedings Involving Trademarks. Before a trademark registers it is published by the USPTO for an opposition period. During this period, which is typically 30 days, anyone may file an opposition to the trademark. An opposition proceeding is decided by the Trademark Trial and Appeals Board (TTAB).

After a trademark is registered, the USPTO may cancel the registration under certain circumstances. A requestor may submit a petition for cancellation to the USPTO.

The losing party in opposition and cancellation proceedings may appeal the decision to the CAFC or file a lawsuit in a federal district court.

3. Responding to Demand Letters. The recipient of a demand letter typically has standing to bring a declaratory judgment action. One advantage of filing such an action is the ability to select the forum in which the case will be heard.

In a declaratory judgment lawsuit, the accused infringer has an opportunity to request cancellation of a trademark or can attempt to prove that a patent is invalid and unenforceable.

The demand letter recipient should consider whether the patents named in the demand letter are indeed being infringed upon. Continued infringement after receiving actual notice of a valid patent could subject the infringer to liability for treble damages. The accused infringer may wish to seek the advice of counsel as to whether its products infringe the named patents and whether the named patents are valid.

C. Remedies for Intellectual Property Infringement

1. Patents. A patent owner may be able to obtain a preliminary and/or permanent injunction to cease infringement. Permanent injunctions are a more common remedy in patent cases where the patent owner and accused infringer are competitors. If the patent owner does not practice the claimed invention, courts are much less likely to grant an injunction because monetary remedies are adequate. In addition, judges will not award an injunction when, for example, the public interest outweighs private interests. In such a case, the result is a compulsory license.

In addition to or in lieu of an injunction, a patent owner may be awarded damages for patent infringement. While a damages award may be calculated based on lost profits, in no event should it be less than a reasonable royalty.

If infringement is willful, treble damages could be awarded. Willful infringement may occur when, despite having actual knowledge of an infringement, the infringer continues the infringing activities in bad faith. An opinion of counsel may be obtained in an attempt to prove good faith, but it is not determinative. In exceptional patent infringement cases, reasonable attorneys' fees may be awarded.

2. Trademarks. An injunction is a common remedy for trademark infringement. Monetary damages also may be available. Such damages may include the infringer's profits, the trademark owner's lost profits, and other damages and costs sustained. In the case of a counterfeit mark, statutory damages may be elected in lieu of actual damages.

Treble damages may be available for bad faith trademark infringement. Treble damages are available by statute in counterfeiting cases. Courts also may order the destruction of the infringing articles.

3. Copyrights. Injunctions against future infringement may be ordered in copyright cases. An infringer also may be liable for monetary damages. In certain cases, the copyright owner may elect to receive statutory damages or actual damages and any additional of the infringer's profits. Attorneys' fees and costs also may be awarded at the discretion of the district court.

In addition to civil remedies, an infringer could have criminal sanctions applied against him/her, including fines, jail sentences, and forfeiture and destruction of the infringing goods.

4. Trade Secrets. Trade secret remedies vary by state. Many states have enacted a form of the Uniform Trade Secrets Act, and remedies in these states may include an injunction, money damages, and recovered attorneys' fees (for willful misappropriation). Punitive damages are available in some common law states.

D. Defense of Lawsuits

Upon receiving a complaint of intellectual property infringement, it is important to begin planning your strategy immediately. Intellectual property lawsuits typically involve a large amount of discovery. Both technical experts and damages experts are commonly used by all parties. In many cases, intellectual property owners attempt to obtain temporary restraining orders and preliminary injunctions to stop the infringement or misappropriation of their intellectual property.

In some circumstances, it may be advantageous for an accused infringer to initiate a reexamination or other review proceeding, or a cancellation proceeding against the patent or trademark owner.

In a patent infringement case an accused infringer may argue that there is no infringement of the patents at issue, that they are invalid, and/or that they are unenforceable. Accused infringers may seek to establish invalidity by introducing prior art to prove that the patented invention was obvious or lacked novelty. Accused infringers also may seek to obtain a decision that the patent is unenforceable by showing, for example, that the patentee committed inequitable conduct. Other defenses may include allegations of experimental use, patent misuse, estoppel, and intervening rights.

Counterclaims also should be considered—counterclaims for a declaration of noninfringement, invalidity or unenforceability; counterclaims asserting the defendant's patents against the plaintiff; antitrust and patent misuse counterclaims; and counterclaims alleging other types of intellectual property infringement or breach of contract.

In a trademark infringement case, defenses may include arguments that the trademark is not protectable because it is generic, functional, or was abandoned. Prior use also may be a defense, as well as nominative use, parody, and the First Amendment.

Fair use is a popular defense in copyright infringement cases. Fair use is a fact-based inquiry in which the fact finder considers the purpose and character of the use, the nature of the copyrighted work, the amount and substantiality of portions used, and the impact on the potential market for the copyrighted works. Other defenses in copyright actions include independent creation, no valid copyright, and the first-sale doctrine.

In a trade secrets case, parties accused of misappropriation often will argue that there is no trade secret because insufficient measures were taken to maintain secrecy or because the information is widely known. Defendants also might argue that the information was acquired by proper means or that the information actually belongs to them.

Other options for defending intellectual property litigation may involve filing motions to dismiss, which could be based on the failure to join all of the intellectual property owners, lack of federal jurisdiction if the only underlying issues are in contract, and lack of standing if the patentee has made no overt effort to enforce the patent against the plaintiff in the case of a declaratory judgment action.

To find out more please access our IP Primer page.

This document is not intended to create an attorney-client relationship. You should not act or rely on any information in this document without first seeking legal advice. This material is intended for general information purposes only and does not constitute legal advice. If you have any specific questions on any legal matter, you should consult a professional legal services provider.

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Useful Resources
The IP primer provides an overview of the complexities of IP law, is an excellent resource for both new and experienced professionals and available in a number of languages.
A collection of recent and significant publications by the Experts at BGL.
USPTO is the federal agency for granting U.S. patents and registering trademarks.
Administers the U.S. copyright law and advises Congress and other government agencies regarding copyright issues.
WIPO is the global forum for intellectual property services, policy, information and cooperation.
INTA is a global association of trademark owners and professionals.
The Intellectual Property Owners Association is a trade association for owners of patents, trademarks, copyrights and trade secrets.
The AILPA is an innovator, powerful advocate, and visible global leader in intellectual property.
AIPPI is an international organization comprised of business firms, executives, lawyers, educators, patent and trademark agents, intellectual property owners, and other persons interested in the worldwide protection of patents, designs, trademarks, trade names, know how, goodwill, copyright, and other intellectual property rights and the elimination of unfair trade practices.
BIO is the world's largest trade association representing biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations.
Supports innovation, competitiveness and economic growth across Europe through a commitment to high quality and efficient services delivered under the European Patent Convention.
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