To establish willful infringement, the patentee has the burden of showing "by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent." In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en banc) cert denied 552 U.S. 1230 (2008). "The state of mind of the accused infringer is not relevant to this objective inquiry." Id. Only if the patentee establishes this "threshold objective standard" does the inquiry then move on to whether "this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer." Id. Bard Peripheral Vascular, Inc. v. WL Gore & Associates, Inc., (Fed. Cir. 2015).
An Affirmative Defense
Patent exhaustion is a judicially fashioned doctrine without a specific source in congressionally enacted text stating the terms of this limitation on patent rights. See Bloomer v. McQuewan, 55 U.S. at 549-50. Helferich Patent Licensing, LLC v. The New York Times Company, (Fed. Cir. 2015).[T]he decisions finding exhaustion [] have done so only when the patentee's assertion of infringement was, or depended on, an assertion that an authorized acquirer was using the same invention by infringing the asserted claims. We have [not] identified any case from the Supreme Court that has found exhaustion without this common feature. Helferich Patent Licensing, LLC v. The New York Times Company, ibid.
Exhaustion protects an authorized acquirer's freedom from the legal restrictions imposed by the patent statute. The statute grants a patentee the right to exclude others from, e.g., making or using or selling a patented invention, 35 U.S.C. § 154(a)(1), and it then imposes concomitant legal restrictions on acts that violate the exclusivity right by defining, in closely related terms, what it means for a person to "infringe" the right, § 271. Patent exhaustion removes those legal restrictions on certain persons in certain circumstances: it eliminates the legal restrictions on what authorized acquirers "can do with an article embodying or containing an invention" whose initial sale (or comparable transfer) the patentee authorized. Bowman v. Monsanto Co., 133 S. Ct. 1761, 1766 & n.2 (2013). Specifically, once there has been an authorized sale of a patented item, that sale "'confers on the purchaser, or any subsequent owner, 'the right to use [or] sell' the thing as he sees fit." Id. at 1766 (quoting United States v. Univis Lens Co., 316 U.S. 241, 249-50 (1942)). Helferich Patent Licensing, LLC v. The New York Times Company, ibid.
In applying and refining the doctrine for a century and a half, the Supreme Court has considered various issues about the doctrine's scope, including issues concerning the character of the article authorized to be sold and its relation to the asserted claims. See Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617 (2008). But the doctrine's protection against infringement allegations has, apparently, always remained within a limit that reflects the core notion that exhaustion lifts legal restrictions on an authorized acquirer. The doctrine has never applied unless, at a minimum, the patentee's allegations of infringement, whether direct or indirect, entail infringement of the asserted claims by authorized acquirers— either because they are parties accused of infringement or because they are the ones allegedly committing the direct infringement required by the indirect infringement charged against other parties. Helferich Patent Licensing, LLC v. The New York Times Company, ibid.
THIS CASEBOOK contains a selection of 31 U. S. Court of Appeals decisions that analyze and discuss issues surrounding patent infringement. The selection of decisions spans from 2014 to the date of publication.