The Impact of Statutory Broadening of the Scope of Patent Rights

When the patent statute was amended, effective January 1, 1996, to broaden the exclusionary rights of a patent owner, the value of a patent and the enhanced options for enforcement increased tremendously.

While many mistakenly refer to a patent as a “monopoly,” it is important to understand that it gives no positive right to practice the patented invention. The grant of a patent gives one the right to exclude others from engaging in certain conduct which is defined by the claims of the patent. For example, assume that a first inventor obtained a patent for a chair having three legs. Further assume that a second inventor concluded that the chair would have greater stability if it had four legs and sought and obtained a patent for the four-legged chair. The second inventor would have an exclusionary right as to four-legged chairs, but could not commercialize his chair without a license from the first inventor as the second inventor’s chair would have three legs. The fact that it added a fourth leg would not remove the chair from an infringing posture.

Traditionally, under the 1952 statute and going back well before that, a patentee had the right to prevent others from making, using, or selling the claimed invention. The amendment added two categories of exclusionary rights. The first was the offering for sale of the patented invention and the second was the importation of the patented invention. As to the former, there is a qualification in the statute which states that the offer for sale by a third party must be such that the sale would occur before expiration of the term of the patent.

Making an offer of sale a violation of the statute broadened the rights and affected other decisions involving enforcement of a patent. For example, suppose an infringer made a product in California and sold it in Illinois with the user making use of the same in Texas. Assuming no unusual facts, acts of infringement would have occurred in California, Illinois, and Texas.

On the other hand, under the revised statute, if an offer to sell was made in Las Vegas at an industry show, that would result in an act of infringement within the state of Nevada. As a result, depending upon whether the one making the offer of sale was an employee of the manufacturer or an independent manufacturer’s representative, there could be, through the Nevada conduct, an additional party who could be sued for infringement, an additional forum in which an infringement suit could be initiated, and the ability to sue at a date prior to there having been a sale.

The expansion of rights to add the right to exclude importation into the United States of any patented invention eliminated the potential problems that might arise from the product being made abroad, sold abroad, and brought into the United States, leaving the patent owner relegated to the issue of whether the one receiving the import was liable as one who unlawfully used the product. Now the act of importation might permit action against the one who initiated the import and the act of importation per se would be an infringement rather than having to prove subsequent use within the United States.

A limited prior amendment to the statute also dealt with the issue of a product made outside the United States in a situation where there was process patent protection in the United States, but not product protection. Under these facts, as the process was carried on outside of the United States and the product was not protected in the United States, under the prior act which did not provide importation as one of the acts of infringement, the domestic method patent owner could be left without a remedy under the patent laws. Action through customs procedures could be employed to seek relief, however. The prior amendment states that if the process patent covered the product made by the process outside of the United States, importation of that product could be blocked under certain conditions.

It will be appreciated that by providing the two additional categories of exclusionary rights, the rights of a patent owner as well as the strategic enforcement decisions to be made have been broadened with this strengthening of the patent owner’s position.

For more information, contact A.B. Silverman at Eckert Seamans Cherin & Mellott, LLC, 600 Grant Street, 44th Floor, Pittsburgh, Pennsylvania 15219 (412) 566-2077; fax (412) 566-6099; e-mail abs@escm.com.