Patent rights last for a restricted period, and the right to sue the party infringing on the patent depends on this period. Therefore, inventors and other patent owners must calculate the expiration date of their patent. This will depend on the filing date of their patent application, priority dates, terminal disclaimers, delays by the patent office and the type of patent they received. But what happens after patent expires?
All exclusive rights of the patent owner are gone once the patent expires. The owner can no longer sue companies for using and selling products covered by the expired patent. However, if the infringement happened during the active period of your patent then you have the right to sue for damages accrued over that portion of the active period. At the same time, you cannot recover damages for infringement committed more than six years prior to the filing of a complaint for patent infringement.
35 U.S. Code § 286
Except as otherwise provided by law, no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim for infringement in the action.
In the case of claims against the United States Government for use of a patented invention, the period before bringing suit, up to six years, between the date of receipt of a written claim for compensation by the department or agency of the Government having authority to settle such claim, and the date of mailing by the Government of a notice to the claimant that his claim has been denied shall not be counted as part of the period referred to in the preceding paragraph.
The purpose of this statute of limitations is to encourage the prompt disposition of potential claims. However, 35 U.S. Code § 286 does not prevent the filing of a suit, unless the only relief that could be granted is damages for infringement more than six years ago. Say, for example, the defendant had infringed continuously for the past ten years, the patentee could still sue to recover damages for the most recent six years of infringement and could obtain an injunction against future infringement. The rationale behind this policy is to prevent patent owners from sitting on their patent claims while the value of their damage claims grows ever larger.
While it is unlikely to see infringing actions go unchecked by competitors for many years, it may be expected that a small company or an independent inventor may delay filing suit because they are not ready for the inherent risk and costs associated with the litigation process. Even if a defendant generated millions in revenue from the sale of an infringing product seven or more years ago, 35 U.S. Code § 286 could bar those damages claims. Also, plaintiff cannot collect damages for infringement that occurred after the patent is expired even though that comes within six-year statutory limitation as the patent is now available for public use. For instance, Plaintiff files an infringement for a patent that expired four years ago and the infringement started ten years ago. So, the plaintiff can only claim damages for the two years when the defendant infringed the patent when it was active.
Why this limitation of six years in collecting damages? Why not collect all the damages for infringement during the active period of patent?
The doctrine of laches which is an equitable defense remedy. To prove laches a defendant needs to demonstrate that the plaintiff unreasonable and inexcusable delayed asserting an infringement claim, as well as also showing prejudice or injury to the defendant resulting from the delay. Patent owner’s delay in filing suit is measured from the time infringement is discovered, or should have been discovered, until the time suit is filed. In defense the defendant can show that the plaintiff was aware or should have been aware of the right of action against infringement, yet did not act to assert or protect its rights. This provides an unfair advantage to the defendant as most of the small companies and individuals are not active on regular basis like big firms with ample of resources, and thus doctrine of laches could prevent them from getting their fair share of the damages.
Another issue that might limit a patent owner’s recovery in damages relates to 35 U.S.C. § 287, the marking statute. The purpose of the marking statute is to protect the public from accidental patent infringement. The law holds that absent such marking, your ability to recover past damages from an infringer can be very limited. This can be accomplished as constructive notice or actual notice which requires a patent owner, and its licensees, put the word “Patent” (or “Pat.”), together with the number of the patent on the product or its packaging. Patent owner is generally under an obligation to mark their patent number(s) on patent-embodying products that are manufactured, sold, offered or imported in the U.S. by their company or licensee. It should be noted that the obligation also extends to licensees. Patent owners therefore have to make sure that licensees are properly marking their goods, or their ability to recover damages for infringement will be impaired.
35 U.S.C. § 287 (abridged)
(a) Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word “patent” or the abbreviation “pat.”, together with the number of the patent, or by fixing thereon the word “patent” or the abbreviation “pat.” together with an address of a posting on the Internet, accessible to the public without charge for accessing the address, that associates the patented article with the number of the patent, or when, from the character of the article, this can not be done, by fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice. In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.
(b) (1) An infringer under section 271(g) shall be subject to all the provisions of this title relating to damages and injunctions except to the extent those remedies are modified by this subsection or section 9006 of the Process Patent Amendments Act of 1988. The modifications of remedies provided in this subsection shall not be available to any person who— (A) practiced the patented process; (B) owns or controls, or is owned or controlled by, the person who practiced the patented process; or (C) had knowledge before the infringement that a patented process was used to make the product the importation, use, offer for sale, or sale of which constitutes the infringement.
(2) No remedies for infringement under section 271(g) shall be available with respect to any product in the possession of, or in transit to, the person subject to liability under such section before that person had notice of infringement with respect to that product. The person subject to liability shall bear the burden of proving any such possession or transit.
Thus, the implication is that a patent owner might lose the right to collect historic damages if they do not police the marking provisions of their license agreements. Failure in this regard would allow defendant to argue that it was not properly notified of the patent at issue.
Note that 35 U.S. Code § 287 does not apply to patents with just method claims, for the simple reason that methods cannot be marked. If the patent includes both method and system claims, the method is related to a system that the patentee has made, used, sold or offered to sell, such marking will be required in order recover past damages. In other words, if neither the patent owner nor the patent licensees have sold any products covered by the patent, no marking or other notice is required to collect the past damages for infringement of a method claim.
SCA Hygiene v/s First Quality: On March 21 2017, the U.S. Supreme Court issued a decision in SCA Hygiene Products Aktiebolag v/s First Quality Baby Products, LLC, a case which looked at the issue of whether and to what extent the defence of laches may bar a claim for patent infringement brought within the six-year statutory limitations period, as defined by 35 U.S.C. § 286. The case arose over infringement of SCA's patent (U.S. Patent No. 6,375,646) on adult incontinence products, which First Quality contended was invalid over its own prior art patent (U.S. Patent No. 5,415,649). Following ex parte re-examination of SCA's patent and a finding by the USPTO that the claims were patentable over First Quality's patent, SCA brought suit (about 7 years after SCA first notified First Quality regarding its allegations of infringement). The District Court ruled by summary judgment that SCA's suit was barred by laches (an equitable doctrine that prevents a patentee from "sleeping on her rights" by undue delay in filing a patent infringement suit). A sharply divided Federal Circuit affirmed en banc, based on its reasoning enacted a six-year time limitation on money damages. The Supreme Court decided that the equitable defence of laches cannot be invoked against claims for infringement occurring during the statutory period which was consistent with the court’s rule on copyright infringement case Petrella v. Metro-Goldwyn-Mayer, Inc. based on three-year statute of limitations.
Therefore, it is always recommended that a patent owner must be aware of all the happenings in his/her technical field in order to avoid any delay in filing the complaint against infringer. This will only help to recover as much as damages possible for infringement. This could be possible even the patent expires but one must not wait for too long as statute of limitation period can bar you from getting a fair share of your property.
Copperpod provides portfolio analysis services that help clients to make strategic decisions such as In-licensing/Out-Licensing of patents, new R&D investments, or pruning out less critical patents. Our qualified and dedicated team of patent engineers provides strength parameters for each patent in a portfolio based on their technical quality, enforceability, offensive/defensive strengths & business value. Please contact us at firstname.lastname@example.org to know more about our services. Chandan provides procedural advice and assistance to the attorneys and corporations in connection with matters related to patent infringement and IP litigation. He has a Bachelor's degree in Electronics and Communications Engineering. Chandan has worked in the patent search and analytics domain for 6 years and has worked extensively on providing patent strategy solutions to Fortune 50 corporations. Keywords: Patent Licensing, Patent Infringement, Patent Protection Types of Patent Licensing, IP Licensing Patent Services, Patent Licensing Companies, IP Infringement, Patent Companies, Patent Licensing Firms, Intellectual Property Infringement