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   Back for the attack (?)
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   Author  Topic: Back for the attack (?)  (Read 702 times)
Sol Rosenberg
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Back for the attack (?)
« on: Apr 10th, 2004, 6:43am »
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I was sued for patent infringement and I settled with the person who was suing me.
 
I've since uncovered a foreign patent for the same invention filed one year before his was filed here in the US.
 
As a result, I think his patent is invalid under 35 USC 102.  
 
Two questions:
1) How can I get that guys' patent invalidated by the USPTO?
2) Is there a way to get back the settlement money since the patent is invalid?
 
Thanks a bunch,
 
Sol
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Re: Back for the attack (?)
« Reply #1 on: Apr 10th, 2004, 7:51am »
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I'll add another question:
 
0) Is the foreign patent "prior art" under US law?
 
From what I understand, the answer is "No."
 
Here's a quick run-down of what's prior art:
http://www4.law.cornell.edu/uscode/35/102.html
 
The closest two seem to be 102(b) and 102(e).  In 102(b), it has to be patented one year prior to filing -- not merely filed as an application.  If the application was published more than a year prior to the US filing date, you'd have something.
 
102(e) only applies to US applications and the filing date of the reference must pre-date the invention date, not the filing date of the application in question.  In many cases, the invention date is the filing date.  But the invention date can be much earlier, even more than a year earlier (although this is rare in actuality).
 
Now, to your other questions.
 
1)  You can submit the foreign patent with a request for reexamination in the USPTO.  If your paper is deemed to raise a substantial new question as to the patentability of the US patent, examination on the merits will be re-opened.  The patent may be lost during the re-opened examination.
 
I'm fairly certain that you won't have standing to sue for a declaratory action in court to have the patent declared invalid.  You have to reasonably expect to be sued.  Since you've settled, I don't think you can reasonably expect to be sued.
 
2) Nope.  Part of what you pay for in a settlement is the avoidance of litigation -- a cost which seems to currently be in the range of $2-3million.  So, if you were able to avoid those costs due to settlement, you got what you paid for.
 
Now, let me add one more question:
 
3) What might the effect be if I invalidate the US patent and I'm still bound by my settlement agreement?
 
In essence, you open the door for your competitors to freely practice the invention for which you're paying money.  Once you take a license in a patent, you have some interest in keeping the patent valid and enforceable since it acts as a barrier to entry for potential competitors of yours.
 
Now, keep in mind that I don't do much licensing, so my answers might be a bit off.  Maybe others here can add "color" to my answers.
 
Regards.
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Re: Back for the attack (?)
« Reply #2 on: Apr 10th, 2004, 10:20pm »
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Dear Mr. Rosenberg,
 
First, I agree with Mr. Ivey. A non-US patent application date more than one year, but less than 18 months, before the filing date of the US patent is not prior art to the US application.  
 
(Mr. Ivey - FYI. As regards your musings about a DJ action, the U.S. Federal Circuit recently held that a patent licensee in good standing who continues to pay royalties may not file suit for declaratory judgment to challenge the licensed patents because there is no actual controversy as required by Title 28 of the United States Code, Section 2201(a).)
 
http://www.mondaq.com/i_article.asp_Q_articleid_E_25293
 
Second, assuming that the validity challenge has teeth, it still may not be enough to get you your money back. Does the settlement agreement include language about invalidity? Is there a no-refund clause? I bet there is.  
 
(Please do not post any details here.)  
 
Even if there is a no-refund clause in the agreement, you may still be in a position to negotiate. Is the license non-exclusive? Is the patent holder trying to license it to others? If so, then your prior art has some value to those other potential licensees.  
 
Will your agreement (and your need for it) expire before the patent does? If so, then you might be better served to save the prior art for the next go-round of licensing negotiations.  
 
In summary, Mr. Rosenberg, there is no quick answer which can be given here which will be of any value to you. You need to discuss the details of your case with an attorney and then sit down with a licensing expert and look at the dollars and cents of your licensing options.  
 
Regards,  
 
Eric Stasik
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