Tuesday, 18 August 2015

Apple, Samsung and the power of an invalid design patent

Last week we posted a piece which bore the provocative title "Can the death of a patent be a sign of life for the patent system?" here.  While that article was about lapsed and lapsing patents and abandoned patent applications, it didn't address the position of patents that have been invalidated by the courts or by the office that granted them.

Various blogs, including 9to5Mac and FOSS Patents, have reported on the ruling that one of Apple's original iPhone design patents, filed in 2007, has now been ruled invalid by the United States Patent and Trademark Office's Central Reexamination Division on multiple grounds.  This decision, described as non-final, seemingly affects one of the design patents on which Apple relied in its successful infringement action against Samsung, in which Apple was awarded some $US 547 million.

Whatever the outcome of any further litigation over the validity and/or infringement of this design patent, the point to make here is that even an invalid patent can exercise a colossal influence over the way different players compete in the market: this patent has cast its shadow over a hugely lucrative market for eight years and will likely continue to do so, since the position and strategies of Apple and its competitors now have been shaped by the presence of this grant.

A further point to consider is the fate of money paid over by way of damages for infringing a patent that should never have been granted.  It is only recently that the UK Supreme Court, in Virgin Atlantic Airway Ltd v Zodiac Seats UK Ltd [2013] UKSC 46, had the opportunity to consider the retroactive effect of a decision to invalidate a patent which had already been successfully invoked in infringement proceedings, where Lord Neuberger said at [58]:
The policy of the [UK] Patents Act is that valid patents are enforceable against the world, even if an infringer is honestly and reasonably unaware of the existence of the patent. Equally, if a patent is revoked (or amended), the policy is that the revocation (or amendment) takes effect retrospectively, and that this can be relied on by the world. I find it hard to see why someone who has failed in an attack on the patent should not be entitled, like anyone else, to rely on the points that the patent has been revoked (or amended), and that the revocation (or amendment) is retrospective in its effect, whether in legal proceedings or in another context. 
While this articulation of legal policy means that a patent which has not yet been invalidated is no longer the equal of its truly valid equivalent, it is a statement of national law rather than a universally accepted rule, and other jurisdictions may not accept it: after all, the policy of commercial certainty and the principle of res judicata have their attractions too. 

So what's the takeaway message? Businesses should be mindful of the potential influence of their own and their competitors' invalid and potentially invalid patents, and may want to check out national law before deciding on the jurisdiction in which they want to litigate infringement claims on a patent that may well not be upheld.

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