What Happens When You Violate a Patent?

By Shelly Morgan

Patent rights are so important the founding fathers mentioned them in the U.S. Constitution. This respect for patent rights encourages companies to develop new technologies because the courts may punish those who violate those rights. Such punishment is commensurate with the damages suffered by the owner of the patent.

Patent rights are so important the founding fathers mentioned them in the U.S. Constitution. This respect for patent rights encourages companies to develop new technologies because the courts may punish those who violate those rights. Such punishment is commensurate with the damages suffered by the owner of the patent.

Patent Rights

When a patent is issued, the inventor obtains specific rights. Namely, he gets the right to exclude others from making and using the invention. The Manual of Patent Examining Procedures, or MPEP, explains that federal law grants this right in exchange for full disclosure about the invention. The right to exclude others from making and using an invention is why patents are so valuable to companies that develop new technology.

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Infringement

Violating the inventor's rights under a patent is called infringement. Infringement commonly takes place when someone sells a product containing elements that were claimed in a patented invention. Courts consider such infringement a serious violation of U.S. law because it can endanger the financial well-being of a company that legitimately sells the patented product.

Possible Resolutions

One common solution to infringement problems is to give the infringing party the right to continue making and using the invention in exchange for a fee. This right is embodied in a license. For example, a company that holds a patent on a special type of computer memory might license that technology to other companies in exchange for a fee.

Legal Costs

Legal action can follow if the patent holder does not want to license its invention. Legal costs can be staggering in an infringement lawsuit in which the technology is part of an important product. The American Intellectual Property Law Association reported that in 2011 the average legal cost of an infringement suit was approximately $5 million if the infringement involved a device that contributed greater than $25 million to a company's revenues.

Penalties

If you infringe a patent with willful disregard for the inventor's rights, courts might impose treble damages, which are triple the damage suffered by the aggrieved party. Legal costs are so exorbitantly high because the penalties faced by the loser are so high. Courts determine willfulness by looking at the total circumstances.

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References

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Appraising a Patent

The question of the appraisal or valuation of patents has excited a good deal of discussion in the business and financial worlds, for obvious practical reasons. Patent owners have to make a number of decisions and these decisions often turn on the value of the assets involved.

Reasons for a Patent

A patent is an intellectual property right granted by the U.S. Patent and Trademark Office. There are three types of patents available to an inventor: utility, design and plant patents. To obtain any of these patents, the inventor must fill out and submit a lengthy application along with an application fee. While patenting an invention is not mandatory, it has certain advantages.

How a Patent Protects

A patent is the grant of a property right to an inventor for a set term, usually 20 years. When an inventor applies for a patent, the U.S. Patent and Trademark Office determines whether the invention is useful., not substantially similar to a prior invention and not an obvious extension of a prior invention. If the invention satisfies these requirements, the PTO issues a patent certificate. A patent provides specific protections for an invention.

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