Posts Tagged: "prior user rights"

Prior User Rights: The Uncertainty Will Cost You

Section 273 uses language that is untested in the court system. Clarity with respect to statutory construction is especially important to those who wish to take advantage of a prior use but will only later find out when tested during litigation that their use does not qualify under the statute. As argued by Sen. Roy Blunt, “assurances are all the more important for U.S. companies in the biotechnology field with extraordinarily long lead times for commercialization of its products.” [2] Therefore the scope of protection and reliance upon the defense is concerning to those who might enjoy this defense which may lead to a detrimental reliance on the part of those would be prior users.

Prior User Rights: Rewarding Those Who Don’t Contribute

Prior user rights also implicate free rider problems with respect to a subsequent patent that an inventor obtains covering the subject matter of the secret prior user. At the point of publication the prior user no longer maintains a trade secret. At the point of issuance, the patentee and the prior user relatively co-exist with each other in the market. The patentee excludes others from the market except for the prior user. The prior user then enjoys the benefits and advantages associated with the patentee excluding others from operating in the market, while being free from liability to the patentee. In this regard, the prior user enjoys the period of time operating the technology in secret in addition to 20 years of excluding others provided by the competitor.

Prior User Rights and the Incentive to Keep Innovations Secret

However, if prior users are keeping their technology secret while being protected, that leap-frogging from one breakthrough to the next be impeded. Disclosure is the backbone of the progression of the sciences for this reason. “[T]he ultimate goal of the patent system is to bring new designs and technologies into the public domain through disclosure.” Bonito Boats v. Thunder Craft Boats, 489 U.S. 141, 151 (1989). Sharing ideas allows others to improve upon the state of the art and as a result, better products such as medicine and consumer electronics are brought to market thereby driving our economy and benefiting the welfare of the U.S. as a whole. Prior user rights, on the other hand, will inhibit this progression.

What Will Prior User Rights Mean for Patent Litigators?

If you believe that prior user rights are insignificant and don’t deserve discussion you have permission to keep your head firmly planted in the sand. Everyone else keep reading. Think of all that will easily be fair game in discovery. The defendant has the burden of proof and controls the evidence. Judges are going to allow liberal discovery, particularly where the evidence is uniquely held by the defendant and cannot otherwise be obtained by the patentee. When things go wrong it will be the lawyers who are at the short end of the pitch-fork. Don’t let that be you!

Point – Counterpoint: The Debate Over Prior User Rights

Exactly who is to blame if a pharmaceutical company, say Eli Lilly, decides to invest billions of dollars and build a facility when they haven’t adequately protected their own intellectual property? Moreover, who is to blame if that company consciously chooses to resort to trade secret protection, which we all know is exceptionally fragile, as the foundation to build a multi-billion dollar investment? For crying out loud, the very premise that a patentee could force the closure of a manufacturing facility employing hundreds or thousands of people and interrupt the production and distribution of anything, let alone something as consequential as a pharmaceutical, is nothing more than fantasy. Talk about chicken little! Only someone unfamiliar with the evolution of the law relative to preliminary and permanent injunctions in patent litigation could with a straight face much such an argument. Indeed, the mother of all straw arguments!