U.S. Courts Still Crucial for Global Patent Enforcement

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By Peter Leung

U.S. courts are still an important part of a global patent enforcement strategy, despite litigation challenges that include the difficulty of getting injunctions, patent owners say.

Patent owners have been critical of changes in U.S. law that they believe have eroded patent protections and driven a shift in patent enforcement efforts in other jurisdictions, such as the EU and even China.

Even though it can be very difficult for patent owners to get preliminary injunctions against alleged infringers, U.S. courts provide for much more extensive discovery, which can be helpful for a global enforcement effort, Joe Chernesky, senior vice president for intellectual property at the Kudelski Group, the Swiss digital security company said. Chernesky was speaking Sept. 20 at Intellectual Asset Management’s Patent Licensing conference in San Francisco

The U.S. Supreme Court’s 2006 decision in eBay Inc. v. MercExchange LLCmade it much more difficult to get patent injunctions, with some saying it has become virtually impossible. The inability to block an infringer from the market has lowered patent owners’ ability to leverage more favorable licensing terms.

By contrast, other countries like Germany and the U.K. are more willing to grant injunctions, so patent owners who have international patent portfolios can use those courts to put pressure on infringers.

Patent owners with international portfolios need to understand the strengths and weaknesses of the different jurisdictions, Chernesky said.

China Damages Still Low

Patent owners are looking at China as an increasingly important market for patent enforcement. Legal developments, such as the creation of IP specialist courts and some high profile judgments have raised their hopes that it will be a significant venue for patent enforcement.

Eeva Hakoranta, head of patent licensing for Nokia Technologies Oy, said the Asian markets, especially China, are growing quite quickly. As a result, patent holders are looking to do more business there. Hakoranta said.

However, low damage awards are a downside for enforcement in China.

Patent owners can’t ignore the U.S., despite complaints about legal developments there, Shival Virmani, assistant general counsel for IP and licensing at SanDisk Corp. said. China may be an increasingly important jurisdiction, but until courts there start handing out significantly larger damages awards, patent holders must still prioritize their enforcement efforts in the U.S., he said.

Developing markets can also be important forums for global enforcement strategies.

Dolby Laboratories Inc. is having success litigating in India, specifically the High Court of Delhi, Brian H. Way, Dolby’s director of patent licensing said.

The court is objective and fast, and willing to give injunctions even in cases involving patents that are essential to technical standards, Way said. The court can give preliminary injunctions where, after the court decides on a preliminary royalty rate, requires the alleged infringer to pay the royalties into escrow while the case proceeds, he said.

“I’m very bullish on India,” Way said.

To contact the reporter on this story: Peter Leung in Washington at pleung@bna.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bna.com

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