Could giving engineers access to patent search tools make a company liable for wilful infringement? It’s a common concern among IP professionals.
One survey suggested these concerns about wilful infringement were highest for industry researchers in electronics and software, of whom 37% reported having been instructed not to read patents.
These concerns are not without good basis. The Halo v Pulse Electronics ruling—where the rules for wilful infringement and treble damages were changed—are reason enough. Previously, under the Seagate ruling, the patent holder had to present clear and convincing evidence of an obvious infringement. However, with the Halo ruling, the patent owner doesn’t need to present clear and convincing evidence. Instead, those accused of infringement need to build a record that they didn’t act in bad faith—such as by getting an opinion from legal counsel.
Furthemore, the Halo opinion provides guidance by directing courts to focus on the state of mind of the infringer. The courts reemphasise that the judge (upon request by the patent owner), may increase the damages up to three times but only in egregious cases where there is intentional infringement.
However, there are steps you can take to reduce the risks of wilful infringement. During an interview with Jim Hinton, engineer and patent agent at Bereskin & Parr LLP, he shared strategies for avoiding wilful infringement if you manage a large engineering team:
- Understand the difference between a patentability search and freedom to operate (FTO) search
- Control communication about patents by acting early and using the right terminology
- Be proactive about infringements by having design-arounds
Understand the difference between a patentability and FTO search
Engineers may look at patents for two reasons. One is to do an FTO search, during which legal questions about infringement may pop up. This is when the advice of your legal counsel can help reduce the risk of wilful infringement. Another reason engineers might do patent searches is to assess patentability.
Many IP professionals worry that using patent search tools can make their business liable for treble damages because they don’t want the platforms to reveal search history and trail of evidence. However, even if IP professionals ask their engineers to not search for patents, there is no way they can prevent their engineers from doing rogue patent searches using free online tools. It’s better for engineers and IP professionals to use patent search tools that can be controlled and monitored—such as PatSnap.
Jim explains, “PatSnap is more of a business and development tool for the technology people to identify what other people are doing. You’re not looking at what other people are doing to assess whether you might be infringing them. And you’re not looking to assess whether you’re patentable in light of what they’ve disclosed, you’re looking to see where they think it’s worth getting patent protection. So, that market intelligence, that strategy, is even further away from wilful infringement.
“Some of the outputs that you get from searches with landscape analysis for example, gives you a better argument to say that you’re not really looking at individual patents to see whether you are infringing. You’re looking at the aggregation of data which can provide interesting information. Having an aggregation of a report for business decision makers and technology professionals to say ‘Hey, this is an area that is right for getting patents or developing technology,’ is certainly worthwhile.”
For example, your engineers may be looking at whether they can get a patent for their technology. You could use landscape analysis to identify where your ideas sit, and then check whether any patents were rejected due to patentability. The image below shows a landscape of rejected patents in the “optocoupler” space. Rather than looking for infringement risks, in this scenario you would be able to show that you are looking at patentability by analysing rejected patents.
Control communication about patents by acting early and using the right terminology
To prevent possible wilful infringement, it’s important to use the right terminology in emails. Using the term “infringing” when you don’t mean to can land you in a tricky situation. Forbes warns that a ‘harmless’ and informal email containing a puffed-up statement from a colleague or a private thought between friends at work could be used and misinterpreted in a lawsuit. For example, Oracle tried to sue Google for wilful infringement. One of Oracle’s key pieces of evidence was an email sent by a Google engineer that stated, “we need to negotiate a license for Java under the terms we need.” Google’s lawyers argued that the email didn’t mean what Oracle interpreted it to mean–that Google was infringing on Oracle’s patent.
According to Jim, “There are two schools of thought. Some people offload this kind of work to a third party and only have a cursory conversation or phone call to try not to have any documentation. But if you’re searching for patents on your computer and there is evidence you have found things, then you have some documentation.
“The problem is, non-legal experts will say, ‘Hey, this patent is a problem, I think we are infringing,’ when they really mean something else. They mean that we may not be able to get a patent for it. So, emails like this can be very problematic. It’s about having an educated team that understands what they’re doing with their patent searching, knows the right terminology and doesn’t put incorrect statements about infringement in an email.”
By controlling communication about patents, you can reduce the risks of wilful infringement. For example, with PatSnap’s workspaces, you can monitor any communication about a patent, which gives you power to foresee any potential risks. You can customise the workspaces, so rather than asking over an email whether you’re infringing, you can standardise the language used by reviewers and regulate the patents people can view.
For example, the image below shows a custom field in workspaces. You can name the field and restrict the way a colleague can respond by choosing simple responses, such as “yes” and “no”.
Another way to control communication is to ensure that any noninfringement opinions are asked and solved earlier on. In a dispute between Greatbatch and AVX, Greatbatch accused AVX of wilful infringement. AVX obtained a noninfringement and invalidity opinion before the litigation and they modified the designs of their product after the noninfringement opinion. The court found here that Greatbatch’s patent was valid and AVX were infringing, however, AVX’s conduct could not be considered wilful because the opinion of noninfringement were established before the infringing conduct began. Although the opinions of invalidity and noninfringement were wrong, they were timely obtained and relied upon by AVX.
Be proactive about possible infringements by designing around them
If you’re doing FTO searches and think there is a possibility of infringement, it may be wise to design around that danger. According to an associate at Faegre Baker Daniels LLP, your ability to rebut arguments that you wilfully infringed will strongly turn on your evidence of your design around efforts. Even if your design around efforts are unable to avoid infringement, if done properly, they can significantly reduce the risks that you will be liable for treble damages.
Planning early in the innovation cycle by having a look at your technology space is important if you want to spot potential infringement. By changing a few components of your technology, you could reduce the risk of wilful infringement. Jim explains, “If something becomes an issue, make sure you clear it up and you’re proactive about any possible infringement. And if you are [infringing], there may be potential design-arounds that are going to be simple and easy. To catch those early is a huge asset. Before the product shipping out the door, if you know that you can easily design-around a potentially infringing patent by removing an element or removing a step, you can do very well and avoid infringement entirely.”
Reading patents can provide researchers with valuable technical information they can’t find elsewhere. By doing patent analysis, you could identify other technologies in your industry that could be adapted for a design around.
For example, the image below shows the top IPC for optocoupler patents. You could identify which IPC your technology falls under, and then look at what other companies are doing to understand if there are any design-arounds.
About Jim Hinton
Jim is a lawyer, engineer, patent and trademark agent. He works with inventors to protect their intellectual property rights in wide range of technologies, including industrial designs, trade secrets, and patents for mechanical, software, high-tech, green tech, telecommunication and automotive inventions. As an experienced engineer, Jim worked with an automotive/heavy truck parts manufacturer. He has also specialised in engineering design and project management in the fiberglass and fiber reinforced plastic manufacturing industry.