Patent Misuse

By Lia Kopin-Green
/
October 18, 2022

What is Patent Misuse?

Patent misuse occurs when patent holders misuse their patent rights by expanding the scope or term of their patent. These actions, which are common for utility patents, prevent fair balance in U.S. commerce and trade. It is a popular defense in patent infringement cases as the alleged infringer generally tries to demonstrate that the patent owners are abusing their patent privileges to stifle competition. The court can deem the patent holder ineligible for patent enforcement if it finds evidence of patent misuse. Simply put, a patent owner will not be entitled to recover damages for infringement during the period of time that the patent was proven to be misused. In most cases of patent misuse, the defendant must prove that the patent owner’s actions have an “anti-competitive effect,” which can be challenging to demonstrate in court. 

Key Takeaways 

  • A patent misuse occurs when patent owners abuse their exclusive patent rights.
  • When a patent holder commits patent misuse, a court has the authority to revoke the patent's enforcement rights.
  • Patent misuse suppresses competition in the market and does not allow for proper economic competition to flourish.

Understanding Patent Misuse

According to seasoned intellectual property attorneys Timothy J. Barron and Olivia T. Luk, patent misuse is often argued to prevent patent owners from adding additional protections that may harm other companies. In other words, the doctrine of patent misuse limits patent owner rights and ensures that the scope of these rights do not damage competition of other companies in the market. 

If you are trying to accuse a company of patent misuse, two of these main facts must be proven in court:

  1. The patent was used as a mechanism to change business outcomes
  2. The anti-competitive effects of the patent were too broad and extended out of the patent’s scope.

These two principles show that the patent owner abused their rights in an improper way that caused damage and stifled competition in regards to other businesses.

The following are a few standard examples of patent misuse cited by Patent Education:

  • Requiring a patent licensee to buy additional products as part of the patent license
  • Requiring a licensee to pay revenue from sales that the patent does not cover
  • Attempting to collect royalties after the patent expires
  • Filing baseless patent infringement lawsuits

Bottom Line 

Patent owners may extend their patent protection beyond the limits of their products in order to prevent their competitors from gaining market share. However, you should always be aware that there is a fine line between utilizing and abusing your exclusive patent rights. For example, illegal tying of products and services to the patented product is a fairly common practice that the court may consider patent misuse.

If you need assistance with intellectual property or have been accused of patent infringement, Attorney At Law’s experienced patent attorneys can assess both liability issues and damages related to patent misuse.

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