Under federal law, a patent is a granted right which allows the patent owner to exclude others from making, using, selling, offering for sale, or importing the subject matter of the patent without the inventor’s permission for a period of 20 years from the time of the patent application. An activity in violation of that right, involving the patented invention, is said to infringe the patent, and may result in the patent owner bringing suit for damages and to stop the unlawful activity. There are several defenses to patent infringement. One defense is patent misuse.
Patent Misuse is an affirmative defense used in patent litigation where a defendant who has been accused of infringed a patent alleges that the plaintiff has engaged in unlawful patent behavior. A claim for patent misuse may be a complete defense to patent infringement or it may help to mitigate damages following a finding of infringement or justify a failure to pay royalties to the patent owner. This term Patent Misuse generally relates to a violation of antitrust laws, an improper expansion of the scope or term of the patent or inequitable conduct in the procurement or enforcement of a patent.
Patent law is designed to encourage the disclosure of new inventions and technologies by providing the inventor with an incentive–the exclusive right in the invention–in exchange for making the details of the invention available to the public in the form of the patent application and the issued patent. Because the granting of exclusive rights runs contrary to cherished free-market principles, the federal government strictly defines its limits. An attempt by a patent owner to unlawfully expand the scope of the exclusive right given by a patent may be found to have misused the patent, which will prevent the patent owner from prevailing in a patent infringement action.
One of the ways that a patent owner can improperly expand the scope of a patent right is through a tying arrangement, which is where the patent owner conditions the sale of the patented product or the licensing of the patent on the sale of some other product that is not protected by any patent or on the sale of a product or license under a completely different patent. Whether a tying arrangement will actually be found to constitute misuse will depend upon an analysis of the relationship between the patent and the tied product and whether the patent owner has market power in the market for the patented product. If the patent owner does not have market power in the market for the patented product, which is to say that prospective purchasers of the patented product have other options, the tying arrangement will not be found to be anticompetitive or to constitute misuse of the patent.
Another form of patent misuse is an attempt to extend the term of a patent. Although United States contract law is extremely liberal as to what parties may contract to, a contract to pay patent royalties beyond the statutory term of a patent, or any other mechanism for extending the term of a patent, constitutes patent misuse. This absolute enforcement of the statutory 20-year patent term is in keeping with the main purpose of patent law, which is to make new ideas available to the public and advance science and technology.
Patent misuse does not render a patent invalid. Although an alleged infringer will not be liable for infringement during the period of patent misuse, cessation of the misuse of the patent renders the patent fully effective against future or continued infringing activities.