Criminal Remedies for Patent Infringement..
Should It Be A Crime?
I previously stated that very little discussion on patent infringement as a crime has occurred. If the question had been asked 10 years ago, the answer might have been “no.” Quinn noted that, historically, patents have been afforded very strong protections. Patentees were very capable of pursuing infringement suits and winning monetary judgments, as well as injunctions, in a vast majority of infringement cases. In other words, patentees had so many options at their disposal for obtaining adequate remedies that there was no need for the federal government to criminally punish infringers. However, in light of the recent damage to the patent system, the answer to the question may have changed. As Quinn has said:
“Now patents are so weak that inventors have little recourse, as large corporations bulldoze over rights without thought of consequences, because there are no consequences. Even very well-funded startup companies are copied into non-existence. Just look at what Facebook is doing to [Snapchat]. If this type of purposeful copying that cannot be remedied in a civil action is allowed to destroy companies, then perhaps it is time to consider criminal penalties.”
What Quinn meant was that recent legislation and case law have effectively weakened the U.S. patent system to the point where the remedies for patentees seeking enforcement of their patent rights have become so inadequate, assuming they can enforce their rights at all. Not only have injunctions become incredibly difficult to obtain, but also any monetary damages available are reduced to a petty, below-market dollar amount for a “reasonable royalty,” in a compulsory license, as lost profits are nearly impossible to prove. This leads to nothing more than an effective slap on the wrist for large entities that have billions of dollars in assets and millions of dollars in annual revenue, such that monetary damages fail to serve as a deterrent against future infringement where an injunction would otherwise stop this conduct. Ultimately, litigating infringement in court and paying a small judgment is a more cost-effective practice than negotiating a license and paying royalties to use a valid patent, hence the term “efficient infringement.” This kind of behavior is why criminal sanctions must serve as the new deterrent against future patent infringement, especially of large entities.
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Given the current state of the U.S. patent system, with all of the legislative and judicial developments further weakening the effectiveness of patents, it may finally be time to consider adding patent infringement to the list of IP crimes under federal law. If no action is taken to improve the current state of the system, there may be a chilling effect on pursuing innovation and seeking patent protection altogether; inventors may rely on trade secret protection in the future as long as patent protection becomes further disincentivized. Finally, for the sake of uniformity, it may finally be time for patent law to join the ranks of its IP law cousins and protect inventors from future IP theft.
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https://www.ipwatchdog.com/2019/03/04/may-time-provide-criminal-remedies-patent-infringement/id=106912/