Optima Law Group Blog

A Dynamic Patent System

The patent system is continually evolving both in the US and internationally. There have been a few notable Supreme Court cases as well as proposed legislation this year which have changed or may influence the dynamic patent system landscape:

1. TC Heartland v. Kraft Foods – In this case, the Supreme Court upended a rule enforced for 27 years which enabled plaintiffs (with an emphasis on patent trolls) to pick court venues that favor them.  In the case of patent trolls, this is the court in an Eastern district of Texas. Now plaintiffs are required to file patent suits in the city where the defendant is incorporated or “where it has committed acts of infringement and has a regular and established place of business”. This new reform should help to keep patent trolls and their bullying at bay or will it? What exactly is a “regular and established place of business”? In the past it would have probably meant a city where the company owns property and runs business operations, but today’s definition isn’t so clear – what about online retailers like Amazon who have a global presence and operate all over?


2. Impression Products, Inc. v. Lexmark International, Inc. – Lexmark sued Impression Products for infringing on their patent rights by providing a toner refill service for customers of Lexmark patented toner cartridges and offering a cheaper price than Lexmark, which requires its customers to buy new toner cartridge replacements. The Supreme Court in this case, held that once a product is sold, the seller exhausts all patent rights that they may have had in that product. Although this ruling is consistent with past patent practice, it does raise questions regarding ever evolving technology and blurs the line for deciding what constitutes patent and copyright infringement. Once a consumer purchases a product, it is up to the owner to decide if he or she wants to modify it, sell it, etc., but what happens when you purchase patented products with copyrighted material such as apps or software? Is it patent or copyright infringement to resell the product? These types of scenarios will only become more numerous and complex with the advancement of technology.


3. AstraZeneca AB v. Apotex Corp. – Just recently Apotex Corp, in a patent litigation battle with AstraZeneca, argued that AstraZeneca’s Nexium product should be invalidated due to Canadian patent law and the Promise Doctrine, which allows for the utility of an invention to be challenged should any of the claims that the initial patent discloses fail to be demonstrated in the actual invention. The Canadian Supreme Court ruled that the Promise Doctrine goes too far. The ruling has had mixed reactions. Proponents of enforcing the Promise Doctrine are angry that inventors can patent inventions whether they adhere to the claims they make or not. They argue that it is good for global pharmaceutical and technology companies who are already patent holders, but not so great for innovation and small startups, especially those located in Canada. A Canadian survey (http://www.crai.com/sites/default/files/publications/The-impact-of-IP-and-the-promise-doctrine-on-pharmaceutical-RD-activity.pdf?utm_campaign=Subscribe) done last year, shows that lower levels of research and development investment in Canada can be attributed to the Promise Doctrine. Opponents of the Canadian Supreme Court’s ruling contend that this decision will boost Canada’s economy and should attract foreign investors, who prior to the ruling, weren’t confident in investing in companies that could potentially be subjected to the country’s Promise Doctrine.


4. Stronger Patents Act of 2017 (read about the bill here: http://www.ipwatchdog.com/wp-content/uploads/2017/06/STRONGER-Patents-2017.pdf) – A bill proposed to Congress this year that, if enacted, will mostly amend both inter partes review and post grant review proceedings at the Patent Trial and Appeal Board. Advocates of the bill assert that our current patent system is steadily weakening and is set up to favor large corporations and foreign companies. They claim that the bill will promote and reward innovation which will create more jobs and keep investments in the U. S., protect smaller companies and entrepreneurs, and boost the economy. According to the U.S. Chamber of Commerce, the U. S. fell to the 10th spot on a list that ranked the strength of patent systems around the globe. On the flip side, others claim that this bill would perpetuate the validity of bad patents by stripping inter partes review of its ability to invalidate patents that don’t do what they claim, allow patent trolls to keep bullying companies, and move research and development overseas.

This is but a small sample from the ever-changing patent universe.  It is critical that patent applicants and holders stay on top of these changes.  Today’s strategies may need major revisions based on tomorrow’s legislative changes and court rulings.  The complexity is ratcheted up for those clients who file internationally.