Indirect Infringement Defenses & Counterclaims Class Notes: March 20, 2003 Law 677 | Patent Law | Spring 2003 Professor Wagner

03/20/032Law 677 | Spring 2003 Today’s Agenda 1.Indirect Infringement 2.Defenses & Counterclaims

03/20/033Law 677 | Spring 2003

03/20/034Law 677 | Spring 2003

03/20/035Law 677 | Spring 2003 Indirect Infringement 35 U.S.C. § 271 (b) Whoever actively induces infringement of a patent shall be liable as an infringer. (c) Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.

03/20/036Law 677 | Spring 2003 Indirect Infringement Contributory Infringement CR Bard v Advanced Cardio. Sys. (Fed. Cir. 1990) Patent claim: a method of using a catheter for coronary angioplasty ACS: sold a catheter suitable for use in angioplasty procedures The court notes three separate factual possibilities for use of the ACS catheter. (Why is this important?) oWhy does the court suggest summary judgment of infringement is inappropriate? What do you make of the ‘public interest’ discussion?

03/20/037Law 677 | Spring 2003 Indirect Infringement Contributory Infringement 35 USC 271(c): elements of CI... 1.“offer[] to sell or [sale]” (Why not ‘use’?) 2.“component of a patented [invention]” 3.“constituting a material part of the invention” 4.“knowing [the component] to be especially made or especially adapted for use in an infringement” 5.“and not a staple article or commerce or commodity … suitable for substantial noninfringing use”

03/20/038Law 677 | Spring 2003 Indirect Infringement Inducement Infringement Hewlett-Packard v Bausch & Lomb (Fed. Cir. 1990) What acts create the allegation of indirect infringement? Inducement infringement: oDirect infringement oActive intent to spur infringement Why does the court determine that there is no infringement? oWhy does the indemnification clause suggest inducement?

03/20/039Law 677 | Spring 2003 Defenses & Counterclaims Defenses / Counterclaims to patent infringement (35 USC § 282): 1.Noninfringement 2.Patent invalidity 3.Patent unenforceability: a)Inequitable conduct b)Patent misuse / antitrust 4.Limits on patent rights: a)First sale and implied license b)First inventor defense c)Experimental use exception

03/20/0310Law 677 | Spring 2003 Defenses & Counterclaims The Importance of Declaratory Judgments 28 USC § 2201: The Declaratory Judgment Act Requires ‘actual controversy’ to create jurisdiction (‘reasonable apprehension of suit’) Requires ‘sufficient interest’ in the outcome Consider the relationship between the defenses to infringement and the availability of DJ actions What does this suggest about the strategic aspects of the relationship between patentees and infringers?

03/20/0311Law 677 | Spring 2003 Defenses & Counterclaims The Importance of Declaratory Judgments The traditional model for litigation: Expected gains from litigation > Expected costs [% chance of win] x [rewards] > [litigation costs] In the patent context, the potential for patent invalidity/unenforceability adds a factor to the equation: For patentee: o[% chance of win] x [rewards] > [litigation costs] + [% chance of invalidity] x [costs of invalidity] For infringer: o[% chance of invalidity] x [rewards from invalidity] > [% chance of loss] x [costs] + [litigation costs]

03/20/0312Law 677 | Spring 2003 Next Class Defenses & Counterclaims II Inequitable Conduct Patent Misuse & Antitrust First Sale & Implied Licenses