Intellectual Property

Remedies for Intellectual Property Infringement

There are several remedies for infringement on a person's intellectual property.

Business leaders have options for a response when someone uses their book, software, invention, or other intellectual property. Whenever someone uses intellectual property without its owner's permission, it is an infringement. A remedy, or judicial relief for unauthorized use of the intellectual property, can be granted for the infringement of each type of intellectual property.

In the case of copyrights, if a significant part of the copyrighted work is used or the copyrighted work is the basis for the unauthorized use, then there has been a copyright infringement. The owner of the copyright can pursue civil litigation, a civil action in which the owner uses the court system to recover damages for violation of rights against the unauthorized user. If successful, the copyright owner may recover the actual damages, the definite costs that result from the infringement that can be proved, as well as the profits the unauthorized user received and the costs and attorneys' fees that the owner of the copyright spent in bringing the civil litigation. Statutory damages are allowed if actual damages are hard to show.

If the copyright has been registered under the Copyright Act, the statutory damages are limited to between $750 and $30,000 for each infringement. If the unauthorized user has infringed on the copyright willfully, the civil damage limit is $150,000. Civil damages are money awards that the losing party in a civil suit must pay. However, the copyright holder can also recover whatever actual damages from the infringement that they can prove.

A court in a copyright infringement case may issue an injunction, which prohibits an action—in this case, preventing the defendant from further use of the copyrighted material. The court may also order the destruction or impoundment of any unauthorized copies of the copyrighted material. In rare cases the federal government may bring criminal charges against the unauthorized user.
Infringement, or unauthorized use, of an intellectual property can result in the owner of the intellectual property pursuing a variety of remedies.
There are protections for intellectual properties from goods being imported into the United States that may infringe on those intellectual properties. U.S. Customs and Border Protection (CBP) has established a national database in which the owners of intellectual properties can register their intellectual property. CBP then uses that database to evaluate products being imported into the United States, and when products being imported violate the rights of the owners of intellectual properties registered in that database, there is a range of actions that CBP can take, including detaining, seizing, forfeiting, making substantive determinations about whether products violate the rights of owners whose intellectual properties are registered, and destroying or distributing products that are determined to violate intellectual property rights.

In the case of trademarks, CBP can exclude from importation, detain for a period of time, and seize material that violates a trademark registered in the CBP database. A counterfeit trademark is deemed to be a mark that is identical to or substantially indistinguishable from a registered trademark but not authorized by the owner of that trademark. When a counterfeit trademark is found by CBP, the product bearing that mark can be seized and forfeiture proceedings begun by CBP. When the forfeiture proceeding is complete, if the mark is determined to be counterfeit, the products can be destroyed by CBP. If the owner of the registered trademark agrees, CBP can remove or obliterate the mark and provide the products for the use of the U.S. government or to a qualified charity. Also, with the permission of the owner of the registered trademark, CBP can sell the products, with the counterfeit trademark removed, at public auction.

CBP may also determine that a mark on products being imported is a simulated mark, meaning that the mark resembles a registered trademark and is likely to cause confusion for consumers. If CBP determines that goods being imported bear a simulated mark, CBP can deny entry to the goods and detain the goods for 30 days. During the 30-day period when the goods are detained, the importer of the goods can either agree to remove or obliterate the simulated mark or obtain permission from the owner of the trademark to import the goods with the simulated mark. If the importer does not accomplish either of these exceptions, the good bearing the simulated mark can be seized by CBP and forfeited.

If imported goods bear a genuine trademark authorized by the owner of the trademark but the goods are not authorized to be imported into the United States, the goods are considered to be restricted gray market goods (goods that are manufactured under the authority of the owner of the trademark but that are intended for markets other than the United States). Unless the owner of the trademark that is on restricted gray market goods consents to allow the goods into the United States, the goods will be detained and refused entry into the United States.

An invention is protected by a patent even if the owner of the patent has not actually produced the invention and even if a similar product is not an exact copy of the patented invention. The owner of a patent can bring a civil action against an infringer. If the patent owner proves infringement, then they can recover actual damages as well as reasonable royalties for the manufacture, use, or sale of the object, plus court costs and attorneys' fees.

The U.S. Supreme Court has spoken on the issue of whether a patent holder is entitled to an injunction if that patent holder proves that another entity has infringed on its patent. In eBay v. MercExchange (2006) the court held that when a patent holder proves that another entity has infringed on its patent, the patent holder is not automatically entitled to an injunction preventing the infringing entity from continuing to use the patent. At the same time, a patent holder should not automatically be denied an injunction against further infringement on the patent just because the patent holder is not currently using the patent. That court opinion is a little clearer when the facts are known.

eBay used on its website an electronic commerce process that had been developed and patented by MercExchange. eBay had attempted to buy that patent, but the transaction conveying the patent to eBay never happened. However, eBay continued to use the process. MercExchange sued eBay for patent infringement, and a court determined that eBay had improperly used the patented process and ordered eBay to pay MercExchange $30 million, but the court refused to enjoin eBay from further use of the patented process. The dispute reached the U.S. Supreme Court, which said that in such cases an injunction should not be issued prohibiting the continued use of the patent until four steps were considered:

1. Will irreparable injury be done to the patent holder by the continued use of the patent by the other party?
2. Are money damages insufficient to compensate the patent holder for the improper use of the patent?
3. What is the harm to the patent holder from continued use of the patent to the damage done to the other party if that party is ordered to stop using the patent?
4. To what extent is the public interest harmed by issuing the injunction?

Since this case was decided by the U.S. Supreme Court, the decision is binding on all other federal courts, but the suggestion has been made that if the entity alleged to be infringing on a patent is doing so with respect to goods being imported into the United States, a patent holder who claims patent infringement might be better served by contesting the case in the United States International Trade Commission, which is more inclined to issue injunctions against products being imported that infringe on patents.

Frequently in patent infringement cases, the owners of the patent and the infringer will enter into a license agreement. A license agreement is an arrangement that allows the infringer to continue to manufacture and sell the object but where the infringer pays royalties to the owner of the patent on each of the objects manufactured and sold.

In a trademark infringement case, the owner of the trademark can recover actual damages plus the profits derived from the unauthorized use of the trademark, plus court costs and attorneys' fees. In addition, the court typically issues an injunction that stops the unauthorized user from continuing to use the trademark. Customs and Border Protection (CBP) has fairly extensive authority to detain, seize, and sometimes destroy products being imported into the United States that violate the rights of the holders of trademarks that are registered with CBP whether the trademark is counterfeit or simulated or on restricted gray market products.