Europe Says No Backsies On Patent Infringement Awards If Patent Is Later Rejected

from the sorry,-too-bad dept

One of the issues with the patent system that causes trouble for companies involved in patent infringement lawsuits is that there's often a parallel process going on: you fight the patent in court and you also fight it at the patent office. The process for each is totally independent. Even worse, the patent office process is often much slower, and because you may not even realize that someone thinks you're violating their patent until they've sued you, quite often the case is decided or settled long before the patent office can rule on the validity of the patent. This is what happened in the infamous RIM-NTP case. While the US Patent Office surprised many people by publicly saying it would reject the patents even before it actually did -- solely to let the judge know -- it still didn't prevent RIM from getting pressured by the judge to pay $612.5 million to settle the case. It appears that there's a similar problem over in Europe, where the Court of Appeal has decided that even if a patent is later rejected by the European Patent Office fees paid for earlier infringement on that patent will remain in place. The ruling makes it clear that the court understood the two sides, but somehow decided that "certainty" was more important than "fairness" and "not having to pay for doing something that was perfectly legal." For some, perhaps that makes sense, but being in business is an inherently uncertain state of affairs. If certainty was the most important thing in business then the laws would be a lot different -- and economic growth wouldn't exist. Uncertainty is part of business -- and any exec at any company should know that. Then, of course, there's the flip side of this -- which is that if "uncertainty" is such a bad thing, why is it that the courts keep adding "uncertainty" to lots of innovative companies by letting others spring submarine patents on them after they have successful products?


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Rick, May 11th, 2007 @ 4:25pm

    So, extortion is legal now?

     

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  2.  
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    Sanguine Dream, May 11th, 2007 @ 5:02pm

    You hear that sound?

    Yeah that's the sound of the flood gates opening. While it more than likely won't happen don't be surprised if the European Patent Office gets flooded with new patent applications and then a few months later the European court systems get flooded with lawsuits.

    And yes Rick it would seem that extortion is not legal.

     

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  3.  
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    Joe Smith, May 11th, 2007 @ 5:12pm

    Alice in Wonderland

    I would have some sympathy with the court if the English proceedings were finished but the article you reference says that the damages had not yet been quantified. So here the English Court of Appeal appears to be saying that the lower court should go ahead and assess damages for a breach of a patent which is now known to be invalid.

    How can the lower court do that without making a complete ass of itself (to paraphrase Dickens' Mr. Bumble).

     

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  4.  
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    tedivm, May 11th, 2007 @ 5:21pm

    I understand it through

    I don't know if this is the reasoning they used, but I can think of at least one good reason to make that decision the way they did.

    Imagine you come up with this idea which you think is great, you patent, and then later on find someone using it. You have a patent that, as far as you are concerned, legitimate- the patent office said so, right? So far no one has argued it.

    So you sue, you win, you get some money, you reinvest it into your business.

    Five years later someone discovers some prior art, your patent is revoked, and lets say you have to return the money. Now you're stuck liquidating your companies assets and setting yourself back, despite having done everything legally.

    If anything, the patent office who didn't do enough research or consider how obvious the patent was should be responsible for returning the money. The problem there though is that it means the tax payers end up footing the bill, because I doubt the patent office will actually change the way it does anything.

     

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  5.  
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    Anonymous Coward, May 11th, 2007 @ 5:55pm

    Court Arrogance

    This just looks like the the European courts are just trying avoid having to admit to making mistakes. If they first award a judgment on the basis of patent infringement and then have to turn around later and reverse that when the patent is invalidated, then it makes it look like maybe they made a mistake the first time around. Courts hate to admit to mistakes, fairness be damned.

     

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  6.  
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    Anonymous Coward, May 11th, 2007 @ 6:20pm

    Can you defer payment pending (multiple) appeals, hopefully indefinitely?

     

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  7.  
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    Anonymous Coward, May 11th, 2007 @ 6:36pm

    Re: You hear that sound?


    And yes Rick it would seem that extortion is now legal.


    Oops.

     

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  8.  
    identicon
    Anonymous Coward, May 11th, 2007 @ 6:40pm

    Re: Court Arrogance

    Fairness be damned indeed.

    That's just like in American courts in which a person can be released from prison because of a wrongful conviction but the judge will then refuse to have the conviction wiped from the defendant's record.

     

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  9.  
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    ehrichweiss, May 13th, 2007 @ 9:24am

    Re: I understand it through

    Good line of reasoning there.

    How about this though. Since the patent office would be the ones responsible, it would be much, much easier to place the blame on and remove those in the patent office that had a lot of invalid patents especially those that caused a monetary damage to an individual or company. It could surely encourage better checking of prior art and obviousness.

     

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  10.  
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    SailorRipley, May 14th, 2007 @ 6:28am

    Re: Court Arrogance

    It wouldn't be the court who made a mistake...

    Company X sues company Z because their product A infringes on patent Y held by Company X. The court is then asked to judge whether or not product A does infringe on patent Y (and determine "damages").

    At no point is the court asked, or expected, to make a judgment about the validity of patent Y...only about the validity of the claim that product A is infringing on patent Y.

    So even if after the verdict, patent Y is found to be invalid, the court can not be blamed nor did it make a mistake. Maybe your claim that courts hate to admit mistakes is true, however, this is not a factor here, because clearly even when a patent is revoked, the court's ruling isn't a mistake

     

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  11.  
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    Paul, May 14th, 2007 @ 7:25am

    Easily solved

    This is easily solved if any suits involving patent infringement is held off until the patent office finishes reviewing the patent.

    This way, you don't run into what tedivm mentioned in his post titled "i understand it through" which does raise a really good point.

    The person calling for the patent review should have to pay up front for them to review it and the patent office should reimburse them if its found to actually be invalid. That way, you cut down on a flood of patent reviews from people just trying to delay the inevitable or trying to abuse the system. Also, penalties should be imposed on the patent office if a growing number of invalid patents are found.

    The patent office has to be held accountable as some point. The biggest problem arises from obviousness. I know someone in that works in the patent office and she says they get in trouble if they reject a patent without any prior art. They're basically not allowed to reject something due to obviousness without getting in trouble from their bosses. That's gotta change. The patent office has to do what they're supposed to do and not cut corners.

     

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  12.  
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    Anonymous Coward, May 15th, 2007 @ 1:42am

    Re: Re: Court Arrogance

    It wouldn't be the court who made a mistake...
    Not exactly. In the EU invalid patents are not enforceable. So if company Z claims as a defense that the patent is invalid then the court indeed must consider whether the patent is valid or not.

    At no point is the court asked, or expected, to make a judgment about the validity of patent Y...only about the validity of the claim that product A is infringing on patent Y.
    Not true. See my comment above.

    So even if after the verdict, patent Y is found to be invalid, the court can not be blamed nor did it make a mistake.
    That would only be true if new evidence came to light later to invalidate the patent that the original court did not have in the original trial. But even then it would still give the appearance of a possible mistake to the public and courts have very easily bruised egos.

     

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