JURISDICTION REPORT: US
Elements of the patent jury trial
By Paul J Sutton of Sutton Magidoff Barkume
The substantive evidence introduced before a jury in patent trials is quite unique. This is so whether it is a patent infringement action, or a declaratory judgment action seeking to invalidate a granted patent. It involves a blend of science, technology, and unfamiliar areas of the law. This article seeks to provide insights not commonly known to the lay public and even to lawyers whose specialities are not grounded in intellectual property law.
Monopolies are normally discouraged and violate antitrust laws. Their existence contravenes laws which seek to encourage competition. The US constitution is the source of intellectual property rights such as patent rights, and patents during their lifetime enjoy limited lawful monopoly rights. Upon expiration of a patent, those rights cease and their underlying inventions enter the public domain.
Owners of patents who are called upon to legally enforce their IP rights will find themselves in a federal district court. Experienced patent attorneys know that there is rarely any joy in being a successful plaintiff in a patent infringement lawsuit. Management of a company forced to go to court will necessarily be required to expend considerable time, money and energy in order to hope to be successful. Given the enormous costs associated with patent lawsuits, it can sometimes be said that it is the lawyers who usually turn out to be the true winners.
A civil matter
Every owner of a patent has the right to have their infringement case heard in a federal district court before a jury. Such lawsuits are civil as opposed to criminal in nature. Juries in patent litigation are petite, consisting of only six jurors plus one or more alternates. Under US law, it is the role of the jury to hear and consider the evidence presented by counsel to the parties, and to ultimately attempt in good faith to reach and render a verdict. In most cases, it is the jury that determines whether a patent is valid and infringed. While patents when granted are presumed to be valid and enforceable, those presumptions are rebuttable. Alternates are entitled to sit throughout the trial and to fully participate in jury deliberations and verdict voting.
A party who has been accused of patent infringement is entitled to commence a declaratory judgment action as plaintiff, which may seek a finding of non-infringement or invalidity or unenforceability. For this reason, the sending of “cease and desist” types of threats should be discouraged. Otherwise, the accused will be able to take advantage of a justiciable controversy that has been created. It is this type of controversy that gives federal courts jurisdiction to entertain declaratory judgment lawsuits.
There is sometimes confusion among the lay public who may believe that it is 12 jurors that render verdicts based upon evidence beyond a reasonable doubt. Twelve jurors hear criminal matters, not civil matters. Patent infringement is a civil wrong or tort rather than a criminal matter. Absent some other unlawful behaviour, defendants found to be infringers do not go to jail, but rather are subject to monetary damages and an injunctive relief.
“The US constitution is the source of intellectual property rights such as patent rights, and patents during their lifetime enjoy limited lawful monopoly rights.”
Paul J Sutton
While patent owners are entitled to initiate infringement litigation against accused infringers, as a practical matter many are simply unable to do so because of the cost. The legal fees through trial in a relatively simple patent infringement lawsuit may reach $5 million, separate and apart from court and other costs. For this reason, some face the difficult task of trying to retain a patent litigator on a contingency fee basis, where the client pays no attorney fees and litigation counsel will receive a minor percentage of any monies recovered from a judgment or from a settlement. This is not easy, leaving the patent owner in a difficult position. There will have to be a highly favourable risk-reward scenario to attract an experienced patent litigator to such an arrangement.
Unanimous verdict
There is always considerable uncertainty where a jury is involved. Neither plaintiff nor defendant can feel confident that the jury will understand both the facts and the law. Most jurors are chosen from the lay public who have little or no legal or technical training. Trial lawyers must teach jurors and even the judge enough about the technology in the patent in suit to render an informed verdict. It is for this reason that parties to patent lawsuits often settle their dispute out of court.
In order to prevail, a party must obtain a unanimous jury verdict supporting that party’s position. In the absence of a unanimous verdict, there will be a mistrial, requiring an entirely new trial before a different newly empaneled jury.
If a jury finds infringing conduct that is willful, the plaintiff will be entitled to seek treble damages. On the other hand, if the jury has issued a verdict of non-infringement, the defendant’s counsel will ask the trial judge to issue a final judgment to that effect. Jury findings of patent invalidity will be forwarded to the US Patent and Trademark Office. Where the USPTO is notified of a finding of invalidity, the public is made aware that the limited patent monopoly is extinguished.
Given the unique nature of jury trials in patent litigation, litigation counsel will be well advised to carefully manage their clients’ expectations.
Paul J Sutton is a founding partner of IP boutique law firm Sutton Magidoff Barkume and is adjunct professor at NYU’s Tandon School of Engineering. He can be contacted at: paul@smb.law
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