The Rise in Competitor Cases in the IP World.
Today, competitor cases can hold more importance for a company than other intellectual property cases because they tend to relate more directly to the company's business and can result in an injunction and not being able to sell its products.
Adam Alper and Mike De Vries, IP lawyers at Kirkland & Ellis, recently sat down with Inside Counsel to discuss the significance of competitor cases in the IP world.
According to Alper, those where competitors in the marketplace become competitors in the courtroom--can be a sign of the IP system working the way it is supposed to. Patents protect innovation, and the substantial investments in research and development needed to foster innovation.
"When a company finds its patented innovations are being used by a competitor, a lawsuit may be necessary to protect the company's innovation which can be the results of investments in research and development," he said.
So, why has there been an increase in competitor cases in the IP world lately?
While the total number of patent cases changes year-by-year, the largest initial patent damages awards over the past 20 years have primarily been awarded in competitor versus competitor cases. According to De Vries, possible explanations for the recent increase in the relative number of competitor cases include the PTAB avenues for challenging the invalidity of patents established by the AIA, the increased availability of fee shifting under Octane and Highmark, and the patentable subject matter precedent post-Alice.
"Because of the increased likelihood of injunctive relief, the outcome of a competitor case can impact not only the financial bottom line of a company, but also its ability to continue using a particular technology moving forward," explained Alper. "A patent defendant that reaches a monetary settlement with a non-competitor may have changed their legal and financial landscape, but may not be required to change its ongoing business activities."
On the other hand, a company that competes in the marketplace often may find it easier to develop the facts needed to establish entitlement to injunctive relief, allowing them to stop other competitors from continuing to use a patented technology without permission. In addition, competitor cases sometimes include trade secret, unfair competition, tortious interference, and other related claims in addition to patent infringement claims, which might not be present in a non-competitor case.
For instance, 2006's eBay v. MercExchange limited the availability of injunctions in cases in which the patentee has not practiced the patented technology. According to De Vries, because of this, injunctions are more commonly granted in competitor cases, where an injunction can be necessary to protect the investments in business operations supported by the patented technology.
Ultimately, the number of competitor cases will vary depending on the extent of alleged infringement in the market place. Alper said, "As companies independently develop their own technologies rather than using patented technologies developed by another, the number of competitor cases could decrease."
Further Reading: Does Europe Issue Better Patents than the U.S.? How Trade Dress Can Help Game Developers Level Up 5 Basics about Intellectual Property Law: Nuts and Bolts for In-House Counsel (Part 5)
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|Publication:||Inside Counsel Breaking News|
|Date:||Oct 4, 2016|
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