2009 Brought the Biggest Patent Infringement Verdict in History: $1.67 Billion

In 2009, a Texas federal court ruled that Abbott Labs had infringed Centocor's patent, and the jury returned a verdict of $1.67 billion, the largest patent verdict in history. The ruling is subject to appeal. One of the other biggest rulings was a $910 million verdict for Polaroid against Kodak.

To obtain a good patent, you need a good invention. What is not needed is another copy machine, though a clever variation or improvement that is useful may be patentable. A strong patent will issue on a truly extraordinary invention, such as the telephone, the airplane, or the light bulb. A weak patent may be unenforceable in court.

The first step in the patenting process is the patent search. If a patent has already issued that describes your device, then another patent will not issue. The object of the patent search is to determine whether your invention is novel and, in legal terminology, "nonobvious". The U.S. Patent Office and other websites allow patent searches. The better course for most inventors is to hire a registered patent agent or search firm in the Washington, D.C. area. Still another alternative is to conduct an independent search at the Patent Office.

Next, the patent application must be filed at the Patent Office. The Patent Office typically issues Office Actions that reject the application, and the inventor through an attorney responds with arguments as to why the invention should be patented. That is the everyday business of the Patent Office. The process usually requires about two years, but it may require more time.

With a good invention and a little luck, an inventor can license the patented invention to a company. Of course, bad economic times and foreign competition that targets American markets do not help the odds of obtaining a licensing agreement.

After the patent issues, the challenge is to make sure that other products on the market do infringe your patent. In the case of U.S. companies, the patent holder can sue for damages in federal court just as Centocor sued Abbott Labs. In the case of a foreign company, you can sue at the U.S. International Trade Commission (ITC). The advantage of the ITC is that federal courts face a jurisdiction issue over foreign companies, and the ITC does not. Congress created the ITC specifically for this situation. The ITC further has the power to exclude goods from the country, a power that a federal court lacks, and it has a shorter schedule for judgment than federal courts. Ideally, you can obtain licensing revenue from a foreign company for infringement after an ITC judgment, but you face a number of initial obstacles, such as attorney fees.

Still, the Centocor verdict shows that a patent holder can obtain a major verdict for patent infringement. In Centocor's case, its parent corporation Johnson and Johnson was a major benefactor of the verdict.