Legal View: Pre-filing investigations in patent cases: to meet or exceed?

By Stephanie Scruggs
The Daily Record Newswire

Let’s face it: Any litigation is expensive. Patent cases tend to be even more costly because of the technical issues involved, so legal counsel should know the ins and outs of a case before filing to avoid sanctions, eliminate surprises and to improve the likelihood of success for the client.

Avoid sanctions
First and foremost, to avoid sanctions under the federal rules, you must do your homework before filing a patent infringement suit. In patent infringement, the Federal Circuit has interpreted Rule 11 to require a “good faith, informed comparison of the claims of a patent against the accused subject matter.” Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295, 1300-02 (Fed. Cir. 2004).

This generally involves an attorney construing the asserted claims, i.e., deciding what the claims actually cover in light of the language in the claims, the description of the invention, and any back and forth with the U.S. Patent and Trademark Office that occurred while attempting to obtain the patent and comparing the construed claims to the accused product or process before filing suit. Id. at 1300-1301.

Even if the client has done pre-filing investigation to determine that the patent claims are being infringed on by a competitor’s product or process, legal counsel will need to do their own infringement analysis before filing suit.

Eliminate surprises
Some might stop once the Rule 11 requirements are met. However, exceeding the requirements of a pre-filing investigation will likely avoid unnecessary costs and headaches later in the case.

Assemble a solid team
A thorough pre-filing investigation will likely involve a team effort, including those with expertise in the commercial, technical and legal aspects of the potential infringement claim.

These players will likely be a combination of in-house personnel and outside counsel committed to understanding the patent, reviewing relevant activities and researching the alleged infringing activities.

Clients may also want to employ consulting experts to independently review the merits and any drawbacks associated with the case.

Understand the patent
Digging deeper into the specifics of a patent portfolio and each accused product will likely uncover whether there are additional patents that may be asserted and help identify any weaknesses or limitations in the case.

This portion of the pre-filing investigation generally involves first considering what an accused infringer would contend the claims mean and how a court, in view of the dueling positions that you and the accused infringer are likely to take, may construe the claims.

Accordingly, clients should comb through the file histories of the asserted patent(s) and those of any family members for any arguments or remarks made by the applicants or the examiner during prosecution of the patent that might limit the scope of the claims.

In addition, because most defendants will try to allege inequitable conduct for failure to disclose relevant information pertinent to patentability of the claims, you should confirm that all relevant prior art known to the applicants was submitted during prosecution.

Moreover, consider possible design arounds and invalidity arguments. You may not be able to predict the ultimate answer to these questions because they depend on many factors, but you can and should at least consider possibilities.

Finally, understand that an asserted patent gets attention and that other competitors who may have been unaware of the patent prior to the suit or were previously unconcerned about its existence now may take a greater interest in its scope and try to invalidate some or all of the claims by seeking reexamination at the Patent and Trademark Office.

Review activities
Of the patents a client would like to assert, are they practicing any of them? If so, are their products marked in accordance with the claims under 35 U.S.C. § 287(a)? If not, have they given early written notice of the alleged infringement?

While this seems obvious, verify ownership or exclusive licensee status. Both are generally acceptable to give you standing to bring the suit.

Surprisingly, there are many instances of patent infringement cases that have been dismissed (and, in some cases, sanctions imposed) based on lack of due diligence on the plaintiff’s part to research the ownership or licensee status of the asserted patents.

In sum, the body of Federal Circuit caselaw relating to standing via an exclusive license requires the license agreement to transfer “all substantive rights” in the patent to the licensee, so if the agreement requires the licensee to first obtain the patent holder’s consent to the litigation or allows the licensor to prevent renewal of the license after a certain period of time, chances are the case will be dismissed. See, e.g., Aspex Eyewear, Inc. v. Miracle Optics, Inc., 434 F.3d 1336 (Fed. Cir. 2006).

Examine the alleged infringing activities
This part of the investigation generally includes obtaining potentially infringing products or devices and determining, if reasonable, the presence of all patent claim limitations.

In fact, while there is no rule that an accused product be deconstructed prior to filing an infringement suit (see, e.g., Intamin, Ltd. v. Magnetar Techs., Corp., 483 F.3d 1328, 1338 (Fed. Cir. 2007)), if there are no unreasonable obstacles to doing so, reverse engineering, testing and deconstruction may be required just to meet the pre-filing requirements under the federal rules.

For instance, if the infringing product is a bicycle, purchase the bicycle and take the time to inspect it and ensure that all elements of your claimed invention are present.

If the infringing product is an apparatus that cannot be reasonably obtained, e.g., a chemical reactor, or a process, then you might try to obtain information about the apparatus or process from the alleged infringer.

The Federal Circuit has generally indicated that such steps are more extensive than Rule 11 requires and that, upon refusal to provide the requested information, you may have only two choices: assume non-infringement or file suit. See, e.g., Hoffman-La Roche, Inc. v. Invamed, Inc., 213 F.3d 1359, 1365 (Fed. Cir. 2000).

While in some cases it is sufficient to rely on product packaging or marketing literature (see, e.g., Q-Pharma, Inc., 360 F.3d at 1302-1303), if chemical analyses is available for a suspected infringing product, do not wait until after filing to find out whether the product has all the elements of the patent claims.

In Q-Pharma, Inc., the company sued Jergens for infringement of a patent on a method for therapeutically treating damaged tissue by topically administering a composition containing Coenzyme Q10 (“CoQ10”). Q-Pharma, Inc., 360 F.3d at 1298.

Q-Pharma relied on the label and advertising statements relating to the Jergens’ Curél® CoQ10, which listed CoQ10 as an ingredient, as a basis for infringement. Id. at 1301-1302.

Despite the availability of the Jergens’ lotion, Q-Pharma did not conduct a chemical analysis of the lotion. Id. After learning during discovery that the lotion contained no more than 0.00005 percent CoQ10 by weight, Q-Pharma elected to abandon its suit. Id. at 1298.

While Q-Pharma escaped sanctions under Rule 11, this is a clear example of how a pre-filing investigation that meets the federal rules may not go far enough to save the company unnecessary litigation costs.

Finally, you should also know where the infringing activities are taking place. Not only is this important for deciding who and where to sue, it also helps you decide whether to bring a Section 337 investigation at the International Trade Commission in addition to, or in the alternative to, a suit in federal court.

If the infringing activities are outside of the United States and you hold a U.S. patent, providing certain requirements are met, the ITC can enjoin the allegedly infringing activities and stop the products from legally entering the country.

Admittedly, a thorough pre-filing investigation can be a meticulous and painstaking process. However, exceeding requirements in pre-filing investigations for patent infringement cases may avoid squandering substantial resources litigating a patent that has incurable defects.

In addition, the process typically results in a well-vetted, resilient complaint that counsel can use to hit the ground running as soon as litigation commences.   
Stephanie Scruggs is a shareholder at Hanify & King. She represents clients in patent and trademark prosecution and litigation, IP counseling and IP due diligence. She can be contacted at