Prior Commercial Use as a Defense to a Patent Infringement Claim



Practice Areas

Robinson Bradshaw Publication
Oct. 21, 2011

Companies have sometimes been appalled to learn that they could be liable for patent infringement when they did nothing more than continue to sell products that they had publicly sold for years, with no knowledge of any relevant patent nor any claim of infringement by the patent owner. There have long been some limited defenses available to innocent prior users, but the emphasis should be on limited. Since 1999, the Patent Act has given immunity to a user of a patented “method of doing or conducting a business” if it could show that it had made commercial use of the business method at least one year prior to the filing of the relevant patent application. In addition, there have always been some generally-applicable equitable defenses to patent infringement called laches and estoppel—but they require that the patent owner knew of the infringement and took no action, and that the infringer then relied on the inaction.

Now, the America Invents Act, signed into law on September 16, 2011, will offer companies significantly broader protection in cases of innocent infringement. Specifically, it will protect companies from infringement claims if they innocently use an infringing process, or make and sell an infringing product that is used in a commercial process, without knowledge of the claimed patent. Not surprisingly, this broad protection is subject to a series of limitations:

Finally, a company must be aware that Congress did not intend for this defense to be a “free shot” at existing patents. The company claiming the defense has the burden of proving by clear and convincing evidence that it meets the required standards. In addition, if the court finds that the company fails to demonstrate a “reasonable basis for asserting the defense,” it may award attorneys fees to the patent owner.

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