Virtual Patent Marking
Background
United States Patent Law, 35 USC § 287(a), states that damages arising from the infringement of patented claims covering a product do not begin to accrue until the infringer has been issued a NOTICE1 that it is infringing on the patent. In other words, the patentee can collect damages only after a notice has been provided to the infringer.
1NOTICE - An affirmative communication of a specific charge of infringement by one accused product(s). E.g., a letter.
It becomes essential during lawsuits because the number of damages awarded may be conditioned2 to the level of the infringer's awareness. Accordingly, the infringement in a case can be concluded as either willful or innocent. Patent Marking helps the patentee avoid explicit infringement scenarios by providing constructive declaration in public about the patent-protected products. In this article, the author sheds light on the following (1) Actual Notice of infringement for collecting past damages, (2) Issues with Actual Notice, (3) Traditional Patent Marking and its limitations, and (4) Virtual Patent Marking and its features.
2 https://www.lexology.com/library/detail.aspx?g=f3d53993-c979-4214-8c07-f7fb35eed098
Issue with providing Actual Notice
Serving actual notice of infringement is always a burden for a Patent owner. The patentee needs to check if any company is infringing on any patent, which is an involved process. Providing actual notice is always cumbersome and inefficient for a patentee in the long run.
E.g., when the infringement comes into the knowledge of the patent owner after a certain period, the patent owner certainly loses damages for that period. A patentee would need to identify infringers and then provide them with notice one at a time. It introduces delays and highly increases the chances of losing past damage awards.
The other option – Traditional Patent Marking
Traditional Patent Marking; A constructive notice to the infringer. It can be accomplished by labeling a manufactured product or its packaging, protected by patent(s), with a patent identification number(s).
Manufacturers of patented products can notice that the specified patent(s) cover specific products by labeling the product with the patent number(s). In this case, the patent owner is not burdened with providing any notice of infringement because the owner has already made it public that the products are protected by specific patent(s). Now, it becomes the other party's liability to check for patent marking if any patents cover the products. So, logically in a lawsuit, it gives the patentee the right to say that the alleged infringer should have known about the patent and is now liable for damages even when the patentee cannot prove that the infringer knew about the patent. Hence, with Traditional Patent Marking/ Constructive Notice, the alleged infringer is responsible for conducting thorough research to avoid infringing on the other party's patents. Therefore, not complying with the Patent Marking Statute reduces the possible damages ($) collected from the infringers. So, the timing of the notice, whether Actual or Constructive, can significantly impact the damages awarded to a patent holder/ Plaintiff.
Traditional Patent Marking sounds great, but are we unaware of any issue?
Traditional Patent Marking or Constructive Notice has its limitations. It is expensive, inflexible, and highly disruptive to the whole manufacturing process. The patent owner/ manufacturer needs to change the entire production process for a minute change in patent-product mapping. E.g., when patents expire, products are discontinued, or certain features are discontinued from a product, or any change in the association between product and patent. This can be a difficult job for a company with a complex product line and a vast patent portfolio. In a nutshell, it can deter the patentee from starting a Patent Marking program at an early stage or easily make the patentee liable under false marking. Moreover, Traditional Patent Marking doesn't apply to intangible products like services or internet products such as Software, Web applications.
Do we have a choice? – Yes! - Virtual Patent Marking
American Invents Act (AIA) 2011 allowed a new way of Patent Marking by leveraging modern internet power and capacity. It provides a simple and cost-effective solution to Traditional Patent Marking by introducing Virtual Marking. A Virtual Patent Marking program helps patent owners comply with patent marking requirements effectively and efficiently.
With Virtual Patent Marking, the patent owner can mark the patented products with a website listing all the products and associated patents. Virtual Patent Marking allows the patentee to affix onto the product or label the word 'patent' or abbreviated word 'pat' followed by an URL address listing the patent-product mapping. A company can quickly and easily update its Marking Web page without modifying the manufacturing process, i.e., physical labeling of a product or its packaging. Thus, the significant advantage of virtual patent marking is that the manufacturing process is unaffected regardless of what happens with the patent/ product portfolio or patent-product association. It also helps the patentees to ward off the risk associated with improper/ False Marking liabilities by aiding them to change and manage patent-product associations easily on time. Moreover, adhering to marking requirements could also help in maintaining the high value of an IP portfolio during a due diligence review by a third-party investor or buyer1
1 http://legalnews.com/detroit/1378739
Virtual Patent Marking
A Virtual Patent Marking system rectifies the clients' high-stakes patent cases where past damages can be significantly affected (reduced) due to the company's non-compliance with Patent Marking Statute. To effectively claim past infringement damages, such a system helps companies, universities & patent holders by allowing them to extract the most out of their IP portfolio.
Virtual Patent Marking software, essentially a SaaS-based tool, plays a centralized role in creating, maintaining, and hosting a company's markings. The IP and IT department members collectively set up a process to associate the patents with products and create a secure & flexible system to maintain a robust marking program over time.
Author
Emad Mehraj Qadri
*The author's information in this article is provided in good faith and is solely intended as an informational and educational article on best practices. The information contained should not be substituted for legal advice. The author welcomes feedback and suggestions of any kind.
Also, under no circumstance shall the author have any liability to you for any loss or damage incurred due to reliance on any information in this article.
All the views and opinions in this article are the author's own and do not necessarily reflect the author’s employer, affiliates, and clients' opinions.