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Patent infringement

Challenging a granted patent

If you have gone to the effort and expense of securing a granted patent in New Zealand, chances are you want to ensure the patent will keep your competitors at bay until the end of the patent term. Once a potential infringer has been identified there are a number of legal requirements to be aware of, and processes you need to go through, to enforce your patent. These are outlined below.

How do I identify an infringer?

If you are the holder of a granted patent in New Zealand (or elsewhere) it is your responsibility to identify any third parties that may potentially be infringing your patent rights. It is therefore important that you:

  • Keep an eye on your competitors;
  • Monitor likely trade channels where similar products may be marketed and sold; and
  • Read relevant industry or scientific journals to maintain knowledge of new developments and products.

When are my rights actually infringed?

In order for your patent rights to be infringed, the potential infringer must be making or selling a product, or using a process, which is described by at least one of the claims of your granted patent.

The claims are numbered paragraphs at the end of a patent that define the scope of the monopoly held by the patent owner.

More specific information regarding the legal test for patent infringement can be found in our information sheet: “Patent infringement – legal overview“.

Who can initiate infringement proceedings?

Infringement proceedings can be initiated at any time after the patent has been granted. The people who are able to initiate the proceedings are:

  • The registered patent owner;
  • An exclusive licensee; and
  • Someone with an unregistered interest, provided they give one month’s written notice and register their interest with the court at least one month before proceedings commence. A person with an unregistered interest is someone who has obtained ownership of a patent by assignment, but the assignment has not yet been recorded on the Register.

What is the process?

Infringement issues can be complicated and no action should be taken without legal advice.

Once an infringing party has been identified (and a legal opinion sought on whether there is patent infringement), the first step is to issue a “cease and desist” letter. This letter will inform the infringer of your patent rights and give them the opportunity to stop their infringing action.

If the infringing party stops what they are doing, there may or may not be an option for you to claim damages. This will be dependent on each specific situation and usually involves comparing the cost of taking legal action to the likely return in terms of damages payable for the infringement.

If the infringing party does not stop, the next step is to issue infringement proceedings. If the infringing action continues, the infringer will eventually be required to appear in court and a judgment will be made on whether or not the patent has been infringed.

The question of cost/damages will also be decided by a judge – although frequently this is in a separate hearing after the hearing to determine whether the patent is infringed and the infringer liable to pay damages.

Contributory infringement

A contributory infringer is someone who is not infringing a patent claim directly, but their actions directly contribute to the patent being infringed by another party.

To be a contributory infringer you must procure an infringement rather than merely facilitating the infringement. Procurement requires encouraging / instructing a party to infringe rather than merely providing them with the means to do so.

For example, if you sell a kitset with assembly instructions and the resulting assembled item infringes a patent, then there is clear intention for the kitset to be used in an infringing manner. This is considered contributory infringement.  If there are no instructions then theoretically the item could be used in any number of ways, including ways that do not infringe the patent, therefore there is no contributory infringement.

There is a range of case law surrounding this aspect of infringement and gaining a legal opinion is recommended before threatening someone with contributory infringement.

Infringement overseas

Patent rights are territorial. Therefore, if you have a New Zealand patent and you find a third party is producing and selling your patented invention in Australia, you have no right to stop them by threatening patent infringement unless you have an equivalent Australian patent.

However, if the third party is manufacturing the patented invention in Australia but selling it in New Zealand, your New Zealand patent will give you the right to stop the invention being sold in New Zealand.

How can I stop infringers?

There is no guaranteed way of stopping all patent infringers, however you can take a number of steps to ensure you are using your patent rights to their full advantage.

  • Make sure your patent protection extends to your key markets, manufacturing hubs and competitor bases;
  • Mark your patented products (or information outlining patented processes) with their relevant New Zealand (or other country) patent number (e.g. NZ Patent No. 678234);
  • This marking should be placed directly on the product if possible, or on any packaging, marketing or instructions that relate to the product. This is the biggest deterrent to potential competitors. More often than not this marking will be enough of a deterrent for them not to take the risk of copying.

What can I do if I am threatened with patent infringement proceedings?

If you are threatened with infringement proceedings, it is best to consult an intellectual property expert as soon as possible.  Patent infringement is rarely clear cut and gaining a legal opinion on your position and the options available to you early on  is essential. The decision on whether you are infringing a patent will be based on a number of factors including (among other things) the status of the patent in question, when and where the infringing action took place, the scope of the rights held by the patent owner and whether the patent is valid. The most common defences to infringement are discussed in more detail below in the information sheet “Defences to infringement“.

If you do become aware of a potential infringer, or are threatened with infringement proceedings, you should immediately consult an intellectual property professional. Gaining an early opinion on whether your patent is infringed, or if you are infringing someone else’s patent,  will save you money in the long term. It will also give you the best chance to ensure your rights are exercised effectively.