Justice Dept., U.S. Patent Office say sales bans should be exception to the rule

Justice Dept., U.S. Patent Office say sales bans should be exception to the rule

Summary: The Justice Department and the U.S. Patent and Trademark Office have recommended that patent-related sales bans should be a rarity in court.

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The Justice Department and the U.S. Patent and Trademark Office have said that in court cases concerning standard-essential patents, granting sales bans should be rare and the exception to a common rule.

department justice patent office statement release patent infringement sales ban

In a joint statement (.pdf) released late Tuesday, the DoJ and USPTO recommend that the U.S. International Trade Commission (ITC), which has the power to prevent the shipping of products to the United States, should consider the public interest before ordering such injunctions.

The holders of standard-essential patents -- inventions which have become "industry essential" and necessary components in many modern gadgets -- are required to offer licensing terms to competitors through fair, reasonable, and nondiscriminatory terms (FRAND). However, as competition mounts in the smartphone and tablet industry, we are beginning to see a surge in companies taking each other to court for allegedly infringing on these types of patents. 

When these patents are infringed upon, companies often file requests for gadgets operating via the technology to be banned, therefore costing the infringing firm a fortune in lost earnings. Instead, the two agencies suggest other measures should be put in place, as sales bans can potentially hamper competition, innovation and development. 

The statement reads:

"In an era where competition and consumer welfare thrive on interconnected, interoperable network platforms, the DOJ and USPTO urge the USITC to consider whether a patent holder has acknowledged voluntarily through a commitment to license its patents on FRAND terms that money damages, rather than injunctive or exclusionary relief, is the appropriate remedy for infringement.

The USITC, may conclude, after applying its public interest factors, that exclusion orders (sales injunctions) are inappropriate."

The DoJ and USPTO's recommendations echo that of the Federal Trade Commission (FTC), who argues that financial compensation should be offered instead of sales bans when these types of patents are infringed upon, except in very specific cases in order to keep competition strong.

Last week, after a long investigation, the FTC ruled that Google must change a number of its business practices. Among the FTC's orders is the requirement for the tech giant to stop using standard-essential patents acquired through its purchase of Motorola Mobility in order to hamper competition and dissuade competition, and instead offer them through FRAND terms.

In addition, the high-profile case of Apple v. Samsung has resulted in a number of sales bans being requested, mainly involving preventing the sale of Samsung products. Sales bans have also been present in other cases involving Android-powered devices, including alleged infringement of patents owned by Google's Motorola Mobility unit.

The ITC is currently reviewing the results of a preliminary ruling in September which said that Apple has not infringed patents owned by smartphone manufacturer Samsung when developing products including the iPhone and iPad. A decision is expected in February.

Topics: Government US, Legal, Patents

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5 comments
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  • OK so it is better to own cosmetic patents than ground breaking ones

    What I am observing that the companies which made ground breaking innovations which later became industry standard have to license them at reasonable cost even if they may have had spent large amount effort on it. Such as the ones owned by Motorola or Nokia. Also they are not allowed to use these patents to protect themselves as bargain chip in patent warfare.

    On the other hand companies which own/file cosmetic patents such as done by Apple, facebook or "one click" patent by Amazon they don't have to license it and can use it as weapon against their competition to impose sales ban and can be used to hamper innovation.

    So bottom line is that companies will start concentrating on creating more cosmetic patents than ground breaking innovations. It costs very little to own cosmetic patent than entirely new ground breaking technology patent.

    Is this what people want?
    p.vinnie
    • Actually...

      Two things need to happen, at a minimum:

      1. Patent standards should be tightened sufficiently to make it highly unlikely that two people would develop the same patentable invention independently. If two or more people do develop it independently, the presumption should be that the "invention" is trivial..

      2. Standards bodies should have a hard and fast rule against using patented technologies unless the patent holder is willing to license it for use by anyone implementing the published standard. If patented technologies find their way into the standard despite the maintainers' best efforts, any features covered by the patent should be replaced and the patent-encumbered versions should be promptly deprecated.

      The patent system hobbles innovation instead of promoting it largely because it is too easy to get a patent, promoting a "gotcha" legal culture.
      John L. Ries
  • Sadly with the ENTIRE justice system run by imbeciles, morons and criminals

    Nothing will ever be fixed, the parasitic life form called lawyers wouldn't want it any other way.
    Reality Bites
    • Lawyers

      Run the justice system form a majority of congress and the senate and make all the money in patent law suits why would they want to change it.....Shakespeare had it right"First Kill All the Lawyers"
      wizardb9
  • Apple camp has successfully infiltrated the DOJ

    Design patents > Utility patents

    This is what the DOJ is saying.

    A designers "patent" is worth more than an engineer's patent.

    What a load of crap.
    ConceptVBS