What are the Punishments for Patent Law Violations?

Patent law doesn’t have the same serious or long-lasting effects as criminal law the majority of the time. Patent law is all about ownership of immaterial property, also known as intellectual property or IP.

Rarely should anyone go to jail over infringing on a patent or copyright. Instead, punishments for patent law are either monetary or property-based. If you’re unsure of the risks of violating patent law, the patent law attorneys at Emerson Thomson Bennett can explain.

How Do Patent Law Punishments Work?

Typically, patent law violations are committed by companies and small businesses, but they can be committed between individuals. For this reason, punishments such as jail or prison time are exceedingly rare results of cases we work with. 

One of the reasons punishments like prison are not utilized is because most offenders are entities rather than people. Entities cannot be imprisoned and rarely is everyone who is part of an entity guilty of breaking the law. 

To deter breaking patent law, the punishment has to be something that damages a business. This is why our clients and their competitors face these punishments for patent law infringement, rather than other punishments you may be more familiar with.

Punishments For Violating Patent Laws

1. Monetary Damages: Violating patent law can lead to the victim suffering financial losses. It can cause them to lose sales, clients, partners, employees, and more. If the defending party is found guilty of violating another company’s patent, and the plaintiff proves that the violation led to their financial loss in some way, the defending party will have to financially cover those losses and potential losses in the future. In some cases, the court may award treble damages if the infringement is found to be willful.
2. Injunctions: Injunctions stop the defending party from committing actions that will potentially continue their infringement. This means temporarily ceasing the production, sale, use, or offering of the potentially infringing products/services. If the accused is found not guilty of infringement, these injunctions will be lifted.
3. Costs and Attorney’s Fees: Similarly to other types of civil law, if the defending party loses, they can be forced to pay the legal fees of the plaintiff. This is especially possible if the infringement is deemed willful or egregious.
4. Seizure and Destruction of Infringing Products: Courts can order that infringing products be reasonably seized and destroyed from warehouses and store shelves. ‘Reasonably’ is the key word because consumers who already own the infringing product cannot be forced to give it up. 
5. Criminal Penalties: We have established that these are rare, but it’s important to note that there are some examples where this is possible. In cases of deliberate and significant infringement, particularly ones that led to dangerous, defective products, criminal charges can be brought against individuals who are a part of the defending entity.

Avoid These 5 Ways of Committing Patent Infringement

Businesses can accidentally or purposely commit patent infringement in several ways. Understanding these common scenarios can help your business avoid legal issues related to patent rights. Here are some of the most common ways businesses commit patent infringement:

1. Unintentional Infringement: A business might develop a product or process that infringes on an existing patent because they were unaware of the patent or misunderstood its scope. In these cases, there may be partial infringement rather than total infringement.
2. Improper Use of Licensed Technology: Businesses sometimes obtain licenses to use patented technology but may violate the terms of the license agreement by using the technology in unauthorized ways or in unlicensed regions. This is an easy way to violate a patent without meaning to.
3. Reverse Engineering: While reverse engineering is not inherently illegal and is a common practice in many industries, many licensing contracts prohibit it. Odds are if a business tries to reverse engineer a formula or design patent, it will be discovered and then found in violation of their licensing contract.
4. Using Patented Technology in Supply Chains: Businesses can infringe on patents through their supply chain. Some components or materials used in one business’s patent are patented. This means that even if the final product does not directly infringe on a patent, a business can commit what is called a contributory infringement or inducement of infringement.
5. Failure to Conduct Due Diligence in M&A: Companies may inherit patent problems if they fail to conduct intellectual property due diligence thoroughly during mergers and acquisitions. Acquiring or merging with a company that has ongoing patent infringement issues can transfer those liabilities to the acquiring company.

Contact the Patent Law Attorneys at Emerson Thomson Bennett

Patent law may not feel as dire to you as an individual compared to criminal law, but it has serious financial consequences for your business. Protect your business’s future and avoid as many legal issues as possible. It can’t help your business to be charged with patent infringement.

If someone has infringed on your patent, you need to send a cease and desist letter immediately. If you do not protect your patent, you can lose it. 

For this situation, the patent law attorneys at Emerson Thomson Bennett can help. Contact us today to schedule a consultation.