What Is 'Patent Misuse'?

"Patent misuse" is perhaps one of the most "misused" phrases in patent law. When faced with a patent lawsuit or even just a cease-and-desist letter, accused infringers who disagree with the patent holder's actions often ask whether they can counter the infringement accusation with a claim of patent misuse.

Which leads to the question: what exactly is "patent misuse" in U.S. patent law?

Patent misuse can occur when a patent holder improperly tries to expand the scope of the patent in a way that has an anti-competitive effect. (See B. Braun Med., Inc. v. Abbott Labs, 124 F.3d 1419, 1426 (Fed. Cir. 1997).) Patent misuse requires more than just aggressive litigation tactics or disagreement as to whether or not an accused product actually infringes: "the defense of patent misuse is not available to a presumptive infringer simply because a patentee engages in some kind of wrongful commercial conduct." Princo Corp. v. International Trade Commission and U.S. Philips Corp.616 F.3d 1318, 1329 (Fed. Cir. 2010) (en banc). Because patent misuse typically requires an anti-competitive effect, courts give the doctrine a "narrow scope." Id. Even a finding of anti-competitive effect may not be sufficient to find that patent misuse occurred.

One situation that courts have considered to be patent misuse is that in which a patent holder forced customers to buy un-patented products in exchange for a patent license (also known as "patent tying"). Another example is where a patent holder forced customers to pay royalties even though the patent was expired, although this example may be short-lived based on the Supreme Court's recent decision to hear an appeal that challenges this long-standing example of patent misuse.

The Patent Act does not define patent misuse. Instead, it's a judicially-created, equitable doctrine that finds roots in a Supreme Court decision from 1917. However, Section 271(d) of the Patent Act does list a number of activities that are not patent misuse. These include:

seeking to enforce patent rights against infringement or contributory infringement; refusing to license or use any rights to the patent; or conditioning a license or sale on the acquisition of a...