Virtual Patent Marking – Patent Damages – Interview with Tina Dorr and Loretta Freeman – Amazon Patent Evaluation Express (APEX) Program – IP Fridays – Episode 155

Bio of Tina Dorr

Bio of Loretta Freeman

In the latest episode of the IP Friday’s podcast, hosts Kenneth Suzan spoke with two distinguished intellectual property (IP) attorneys, Tina Dorr and Loretta Freeman, from Barnes and Thornburg LLP. The discussion provided valuable insights into patent law, focusing on the career paths of the guests, patent marking, virtual patent marking, and the implications of these practices for recovering monetary damages in infringement cases.

Career Paths to Patent Law

Both Tina and Loretta shared their unique journeys into the field of patent law, emphasizing that many patent attorneys enter the profession as a second or third career. Tina transitioned from a background in science to patent law, driven by a passion for solving business problems and helping clients achieve their goals through legal tools. Loretta, who started as a product development engineer at 3M, discovered her passion for IP while working with attorneys on patentability issues, eventually leading her to pursue a legal career in this field. Both emphasized the importance of a strong technical background for those interested in patent law, but also highlighted the diverse opportunities available in IP law, even for those without a science or engineering degree.

Patent Marking and Virtual Patent Marking

The conversation then delved into the crucial topic of patent marking, a practice that, while optional, can significantly impact a patent holder’s ability to recover damages in cases of infringement. Tina explained that proper patent marking provides constructive notice to the public that a product is patented, which can allow for the recovery of monetary damages from the date of infringement. She also discussed the legal requirements for both physical and virtual patent marking, emphasizing the importance of consistent and continuous marking to maximize potential damages.

Loretta expanded on this by discussing the complexities of virtual patent marking, particularly for companies with large patent portfolios. She highlighted the cost-effectiveness and flexibility of virtual marking but warned of the challenges in maintaining accurate and up-to-date patent information on a dedicated website. Both guests stressed the importance of coordination between legal teams, R&D, and management to ensure that patent marking is handled correctly, thereby reducing the risk of false marking and ensuring compliance with legal standards.

Monetary Damages in Patent Infringement Cases

The discussion also covered the types of monetary damages available in patent infringement cases, with Tina explaining the three main categories: reasonable royalties, lost profits, and triple (triple) damages. She noted that while calculating these damages can be complex, they can range from thousands to billions of dollars, depending on the case. The importance of proving willful infringement for obtaining triple damages was also highlighted, with Tina emphasizing the role of patent marking in demonstrating that an infringer had knowledge of the patent.

Best Practices and Pitfalls

Both Tina and Loretta offered practical advice on best practices for managing patent marking, particularly in the context of licensing and product transfers. They underscored the need for clear agreements on who is responsible for marking in licensing deals and the importance of maintaining accurate records to avoid pitfalls such as false marking.

In conclusion, this episode of the IP Friday’s podcast provided a comprehensive look at the strategic importance of patent marking and the potential financial implications in IP law. The insights shared by Tina Dorr and Loretta Freeman are invaluable for businesses and legal professionals looking to navigate the complexities of patent law effectively.

Kenneth Suzan: Our guests today on the IP Friday’s podcast are Tina Dorr and Loretta Freeman.

Kenneth Suzan: Tina is a partner in the Atlanta Office of Barnes and Thornburg LLP. She represents clients in a wide range of technology areas, including chemical, material, life science, mechanical, aerospace, and semiconductor technologies, including those within batteries, as well as water treatment, fibers and textiles, pharmaceuticals, apparel, consumer products, nutritional supplements, food and beverage, and construction.

Kenneth Suzan: Tina holds a BS in Biology summa cum laude from the University of Georgia, a PhD in Chemistry and Biochemistry from the Georgia Institute of Technology, and a JD cum laude from Georgia State University College of Law. Also joining us today from Barnes and Thornburg is Loretta Freeman. Loretta is a partner with the firm, and her practice involves virtually all aspects of intellectual property law with particular emphasis on domestic and international patent and trademark procurement.

Kenneth Suzan: Her practice includes preparing and prosecuting patent applications in the mechanical arts, design patents, trademark applications, trade dress, and due diligence investigations.

Kenneth Suzan: Loretta holds a BS in Chemical Engineering cum laude from Florida A&M University, and a JD from the William Mitchell College of Law.

Kenneth Suzan: Welcome, Tina and Loretta, to the IP Friday’s podcast.

Tina Dorr: Thanks, Ken. Thanks for having us.

Loretta Freeman: Thank you. Thanks so much.

Kenneth Suzan: So let’s talk about your backgrounds and your paths to becoming patent attorneys. Any words of wisdom for those interested in following this path?

Tina Dorr: Sure, I’ll start.

Loretta Freeman: Go ahead, Tina.

Tina Dorr: Okay, thanks, Loretta. So, as a patent attorney, almost everyone that becomes a patent attorney does so as a second or third career because I’m sure your listeners know that you have to have a technical background in a science or engineering field. And I would say that if you have a love for science or engineering, you have to do this job as a patent attorney every day. But you really have to also love reading and writing. You have to enjoy those things, and you also have to really enjoy—this is my favorite part of my job as a partner in a law firm—helping people and developing relationships with my clients. And that’s something that takes time and is not something that you have a chance to do very much when you first begin practicing as a junior attorney. You really have to learn how to write the patents, do the work, but ultimately, as you get further in your career, you get to truly become partners with your clients and help them advance their business goals. And we use legal tools that I learned in law school and along the way as an attorney, but really helping people solve their business problems is something that I truly, truly enjoy. And it’s the reason that I am happy that I transitioned from science to patent law.

Kenneth Suzan: Loretta, what are your thoughts?

Loretta Freeman: Yeah, my path to becoming a patent attorney was quite interesting. And I agree with you, Tina, that most of us who are probably practicing in this field, it’s either a second or third career, right? But that’s certainly true for me because I really didn’t have any knowledge of what intellectual property was when I was doing my undergraduate degree. No one really told me or gave me any information on what this field was at that time. I had no clue until I started working in the industry as a product development engineer at 3M. And working at a company like that, you get exposed to a lot of things. And one of the requirements as an engineer was you had to know the field in which you were developing products. And so we really had an obligation to understand the arts. And that’s where I got exposed to IP, sitting across the table with these attorneys, talking about what it was I was developing in the lab and what we were following on for patentability. It just became a real passion of mine. And I just said, “Wow, this is something else I can do.” And that was my path to becoming a patent attorney—going to law school to take this route.

Loretta Freeman: And I think the advice I would just kind of tell people is, for me, practicing in this field is so awesome because not only do you continue to work with a team and inventors and being able to see a variety of things, it’s just so complex. I mean, there’s just so many things that you can do and see as an IP attorney because IP law is so varied. There’s just a lot of things that you can do, either on the patent prosecution side or the litigation side; there’s just a whole gamut there. And so I would just say, even if you don’t have a technical background, if you’re not in the sciences, if you don’t have an engineering degree, IP law is still a field that can be very exciting for you because you can do litigation. And a lot of folks would enjoy that as well, even without having the science background. So that was kind of my path to becoming a patent attorney—just being exposed to it as an engineer working for a major company.

Kenneth Suzan: Well, thank you, Loretta and Tina, for sharing your backgrounds. We’re gonna jump now into the substance of today’s podcast, which is in the area of patent marking and virtual patent marking. I know we’ve touched upon this topic in another podcast episode, but we’re gonna go deeper into those issues. We’ll start with Tina today. Tina, what are the basic legal requirements for patent marking and virtual patent marking?

Tina Dorr: Thanks, Ken. So, patent marking is optional. It’s not something that’s required by patent owners at all. It’s optional, but by statute, it’s something that gives patent owners the option to provide what’s called notice to the public of their patented products. And so by providing this notice, by marking products or virtually marking them, you provide this notice which allows you, if someone infringes your patent, to recover monetary damages for the infringement that go all the way back to that notice. So while you don’t have to provide this notice, the benefit is that if someone infringes your patent, you can collect damages. And so the statute says that there are two ways to do it. You can provide constructive notice by marking your product itself. And you can either say “patent” or “patent with the patent number” actually on the product. And that is what you want to do if at all possible—mark the product itself. Now, say that, for example, you have a cup with your company name on it and any other writing. If your product has any other writing on it, then the court’s gonna want you to actually provide that notice on the product itself if you’re using constructive notice by marking the product.

Tina Dorr: Another way to provide notice is through letting a competitor or potential infringer know in writing. So if you don’t mark your products but you discover someone infringing your patent, you can send them a letter, give them the patent number or a copy of your patent. And that’s another way to provide notice. And then again, potential damages would go back to that if you didn’t mark your products to the timing or the date of that letter.

Kenneth Suzan: Sure, sure. No, that’s very interesting. We’re gonna, along those lines, we’re gonna turn to Loretta. Loretta, what factors must be considered when determining whether to use virtual patent marking?

Loretta Freeman: Yeah, determining whether to virtual mark and how to use virtual marking can be more complex than you think. And companies should definitely give this some serious thought, especially those companies with large patent portfolios and/or extensive product offerings. In some cases, the expense in marking the product may be disproportionate to the cost of the product itself. So it may be easier and more cost-effective to virtually mark. For example, just think about the expense that can come with modifying your labeling and packaging information or a manufacturing process to change mode tooling in order to reflect a change in the patent information.

Loretta Freeman: Of course, there are other things that could be done if the patent marking is included in the tooling. Manufacturers can consider using removable inserts that have the patent marking information on them, which can be easily updated and replaced when needed, rather than having to make an entirely new tool.

Loretta Freeman: So there are ways to make this more cost-effective, but you also have the likelihood of needing to scrap old packaging and labeling inventory as you’re trying to maintain accurate patent information. So it’s much easier to update a virtual marking website, and companies can avoid the expense and effort required to update and maintain patent information on products. So e-marking or virtual marking can definitely provide cost-effectiveness, flexibility, and transparency. But if you’re going to virtually mark, companies must ensure that their designated URL remains functional at all times, or you risk the public and potential infringers not being noticed that the products are patented. So the marking system may be a little burdensome to maintain. So you want to consider whether or not your company would be able to commit to keeping such a website updated with the patent information related to each product.

Loretta Freeman: And back to what Tina was mentioning as far as marking on the product itself, the size of the product and whether you can physically mark directly on it should also be considered. Some patented parts may be so small that physical marking would be unfeasible or difficult to even read. And in these cases, you might consider virtually marking and perhaps virtually marking the packaging, which is acceptable only if marking the product cannot be done. And in some cases, there are patented products that are enclosed within a larger product and are never seen by the public, right? For example, products such as computer software, which require special considerations. You might want to indicate the patent during startup or include the information in the documentation of the software. You would also want to include the patent marking within links if the software is internet-based. So these are just some factors that you want to think about when you’re considering whether to virtually patent mark.

Kenneth Suzan: Thank you, Loretta. Following on our discussion here, I want to talk about some best practices. What are some best practices for virtual patent marking, and what steps can patent owners and their counsel take to develop their virtual patent marking program?

Loretta Freeman: I would say for corporations, I like to emphasize having the legal team work closely with management and R&D engineers to identify which products actually fall under the protection of a particular patent. It is important that everyone understands the marking obligations to ensure full compliance with the rules. And so when you work closely together, you can avoid any confusion. And this also will maximize any potential damage awards in cases of infringement. So for sure, one best practice is to just work closely together with your team and making sure that you probably have everything identified. Another one I would just note is having a formal marking program in itself, right? It’s very important to maintain good records. And so having a formal marking program can help with that. And being sure to document its implementation when you actually start this marking program because you want to meet the substantially consistent and continuous aspect of the marking requirement. So having routine monitoring and updating of the URL website is key, as I mentioned earlier, to ensure all the information is accurate and up to date. And you want to indicate on the website when your patent listing was last updated so you can ensure the marking program is consistently followed by manufacturers or licensees, whomever. And so you want to make sure that you’re working closely with those individuals as well.

Loretta Freeman: And another thing to consider is whether a single URL is appropriate, right? I mean, if your company has multiple divisions, perhaps consider whether a different URL should be used for each division or business unit or product family or product line. You might have multiple URLs to help with providing the product-to-patent association that’s required under the law. And it also may be very well helpful in making a divestiture. If there’s anything that were to come up in a particular business later, that could be easier for you down the road.

Kenneth Suzan: Very, very useful. Yeah. Are there any other things that come to mind in this area?

Loretta Freeman: I think from a patent owner’s perspective, I think just maintaining good records to show any changes that are made to the website, the dates that the changes were made, you want to make sure that you keep good records on that. Products, packaging, labeling—all that should be reviewed from time to time to ensure accuracy. Like, you want to make sure expired patents are removed. You want to make sure that new patents are included and that any patents listed do, in fact, cover the marked products. So having this routine audit program in place to monitor and update patent marking may help a manufacturer or company demonstrate that it did not have intent, which is a requirement for proving false marking, to falsely deceive the public and help to avoid penalties associated with false marking.

Kenneth Suzan: Very good, Loretta. Very helpful and useful information. So now we’re gonna shift gears and talk about monetary damages. We’ll talk to Tina about that. So Tina, what types of benefits and potential damages could you gain from properly marking?

Tina Dorr: Good question, Ken. And we’ve been talking about damages. And so damages—there are several types of damages that can be awarded, and these can be hundreds of thousands, millions, billions of dollars potentially. But the three main types are reasonable royalties, lost profits, and occasionally, triple damages. And reasonable royalties are—everyone’s probably heard this term—the fair market value of a license or a royalty for what your infringer would have paid you to use your patents. So to calculate this—and there are experts and companies that do this kind of thing—it’s very complex, it’s dependent on facts, but it also involves a lot of imagination because to calculate the reasonable royalty, the parties are supposed to go back in time and envision a potential amicable situation prior to any litigation, prior to any infringement, a licensing agreement. And they are to consider the licensing agreement that they would have reached based on factors at that time, such as their mindsets, financial situations, and other similar deals.

Tina Dorr: Lost profits is the second type that I mentioned, which would compensate a patent owner for money that they would have made if not for the infringement. So this type of damage requires a showing that your business suffered losses because of the infringement.

Tina Dorr: And then the last type is triple damages, and that’s triple money damages—if the defendant’s infringement was willful. So to prove—I think Loretta might’ve mentioned this—to prove that the infringement was willful, intentional, that they knew about the patent, you have to prove those two things: that the defendant knew about that patent (that’s why patent marking is important) and that they copied or tried to design around it so that it was intentional. And so that, of course, is gonna probably only come out during discovery where documents and emails are reviewed.

Kenneth Suzan: Thank you, Tina. Now let’s also look at patent infringement. If you’re sued for patent infringement, what steps should you take to determine whether the plaintiff properly marked their patented goods to assess your risk for owing damages?

Tina Dorr: Great question. Now, we’ve mentioned a few times that marking isn’t—or maybe I didn’t mention this earlier, I’m not sure if I did or not—but marking isn’t effective until substantially all of the patented products being sold are properly marked. So say that you’re selling some in Georgia and then you’re selling some in California and you’re only marking the products in Georgia for whatever reason. That is not substantially all the patented products. So if you receive a letter—a cease and desist letter, or a complaint for alleged patent infringement—the first thing you want to do, and you can do this informally (of course, this will be done in discovery as well), but you want to look and see that all of the products are consistently marked because if the patent owner has failed to consistently mark, it’s possible that the issue can be decided very early on in summary judgment.

Kenneth Suzan: Mm-hmm.

Kenneth Suzan: And Loretta, let’s talk about how virtual patent marking is being looked at in the federal courts. How are the federal courts treating virtual patent marking these days?

Loretta Freeman: Yeah, I think one of the things—so I was looking at this question, and I really just wanted to focus on the liability for false marking, right? And just making people aware of this liability because marking a product with a patent that does not cover the product can create liability for false marking. And the courts really view that quite seriously, as well as marking a product with a patent number without consent from the patent owner or marking an unpatented product or marking a product “patent pending” when there is no patent pending, right? So there are certain liabilities that you can be at risk of if you do any of those things. And marking a product with an expired patent is no longer considered false marking. A very famous lawsuit involved false marking with expired patents, but the courts eventually found no violation of patent marking laws because there was no intent to deceive. And so Congress amended patent laws under the AIA in 2011 to exclude expired patents for false marking. In addition to this, false marking suits can no longer be filed by ordinary citizens. Only the government can pursue false marking claims, and as such, these suits have dropped off significantly. But I think having a routine audit program can help show that there was no deceptive intent. And so you can kind of move yourself away from these types of risks.

Kenneth Suzan: Very, very helpful information indeed. Tina, if you sell or license a patent, who is responsible for marking?

Tina Dorr: Great question. And this issue comes up all the time. So a significant problem can arise when products are sold or entire businesses are acquired or divested by a device maker and patent owner. And when a patent or patented device is transferred between entities, it is important in that deal to identify who has the responsibility to maintain the marking. Because courts are very clear that the law requires substantially all products to be marked and that, as Loretta mentioned, the marking is substantially consistent and continuous. And this holds true with licensing too. So if a patent owner licenses a patent to a licensee, in order to maintain that consistency in that licensing agreement, it needs to be clear who is going to maintain that mark. And there’s some tension there because, for example, if you’re licensing a patent, of course, the licensee may not wish to have that if it’s virtually marked with the patent owner’s URL website, which is probably going to have its name on that website. That licensee probably doesn’t want that patent owner—who could be a supplier competitor—on their product. But again, it’s really important that those deal lawyers are working closely with IP lawyers together to make it very clear who’s going to continue to and how that marking is going to continue to ensure that the marking is substantially consistent and continuous.

Kenneth Suzan: Very, very good. So we’re coming up near the end of our podcast today. We have one final question that is for Loretta. Loretta, what are some pitfalls and uncertainties around virtual patent marking that you can share with our listeners?

Loretta Freeman: I think, well, there could be a few things, but I want to highlight one for sure that we’ve talked about already. And it’s mostly around the difficulty of linking patents to products and making sure that you have that accurately when you virtually mark. It is so important to have your legal team working closely with your R&D team and management to ensure that you are marking your product with patents that cover the product to provide constructive notice, which may allow collection of higher damages in infringements. I mean, it just really starts there, right? Incorrect patent marking can make a manufacturer liable for false marking. And ineffective patent marking requires routine monitoring and updating to ensure the marking is accurate. So you want to make sure that you have an effective marking system and routine to ensure that you don’t fall into these pitfalls of not having your website accurate and up to date and actually available for those that you’re trying to put on notice.

Kenneth Suzan: Very, very helpful. Tina, do you have any comments on the pitfalls and uncertainties at all?

Tina Dorr: Yeah, I’ll highlight again that, as Loretta mentioned, in many cases, the parties that are responsible for maintaining the virtual patent website and the virtual marking program are their marketing team, and they’re not working necessarily very closely with the innovation team or the R&D team. And maybe they don’t understand the importance. And so I think having regular internal education—and this can come from outside counsel who are, I’m sure, happy to provide a 30-minute lunch and learn on why it’s important to maintain this website and maybe best practices and some of the things that Loretta mentioned to ensure that you’re accurately maintaining the site up to date—and why it’s important. I think understanding that “why” will really help drive and help make that virtual patent marking program robust and continuous.

Kenneth Suzan: Excellent. Tina, Loretta, thank you so much for joining us today on the IP Friday’s podcast. This has been fantastic. And we will list in the show notes both of your firm bios if people want to get in touch with you. Thank you both once again.

Tina Dorr: Thank you very much, Ken.