13 December 2017
Article, News

Infringement of an invalid patent?

Big news, recently Apple was ordered to pay no less than USD 400 million to a company named VirnetX for patent infringement. After digging a little deeper however, it becomes apparent that the United States Patent and Trademark Office (USPTO) had meanwhile already declared the four patents that Apple would have infringed to be invalid. How can this be?

If someone is summoned on account of patent infringement then there are two defence strategies that can both be used in most instances: a) argue that the product or the method of the alleged infringer does not fall under the claims of the patent, and b) argue that the patent should never have been granted in the first place and is therefore invalid.

If the alleged infringer is summoned in the Netherlands then the infringer can claim in the counterclaim proceedings that the patent should be revoked. After all, if the patent does indeed appear to be invalid then there cannot be question of infringement. It may, however, occur that the invalidity and the infringement are claimed in separate proceedings, which may on the face of it result in strange situations.

It may, for instance, be the case that opposition against a patent is pending before the European Patent Office (EPO) whilst infringement proceedings are simultaneously pending in the Netherlands. If a court only rules on the alleged infringement and a product or method does indeed fall under the claims of a granted patent, then patent infringement shall be established. The infringer can be ordered to discontinue the sale and production and potentially needs to pay damages, even if the EPO has meanwhile, or later, reached the conclusion that the patent was invalidly granted. A court may decide to adjourn an infringement case until the EPO has reached a decision (section 83(4) of the Dutch Patents Act) but is not held to do so.

This kind of situation may also occur with a pending opposition. In Germany the invalidity part and the infringement part of a case are always handled separately, the so-called ‘bifurcation’. Hence, it can also happen in Europe that someone is ordered to discontinue infringement of a patent that has meanwhile, or later, been revoked.

Is this not incredibly unfair? Fortunately, it is not so bad. Take, for instance, Apple and VirnetX. The patents have now been invalidated but an appeal is pending that may revive them. And Apple also appealed in the infringement case. If it is ruled on appeal that the patents were rightly revoked then Apple has good reason to fight the damages. Until all appeals have been settled this case can still go in any direction.