Is patent infringement theft?

E.I. Du Pont de Nemours and Co. v. Heraeus Precious Metals North America Conshohocken LLC, 2013 WL 214292 (D. Or.)

DuPont sued Heraeus for patent infringement.  Heraeus counterclaimed for, among other things, false advertising, based on a DuPont press release, “DuPont Addresses Patent Protection at Solarbuzz China Conference; Intellectual Property Theft Growing in Competitive Climate of Photovoltaics.”  The press release stated that a DuPont managing director, as a featured speaker at a conference, said that “Intellectual Property (IP) theft is widespread and the issue seems to be growing in the current climate of this industry…. We do not ignore infringement and will pursue aggressively other points in the PV supply chain where IP infringement of our PV metallization pastes exists.”  The press release continued:

Cheng indicated this set of actions continues in the manner of previous DuPont actions involving IP protection in China and other countries in the world. The company recently filed two lawsuits against PV metallization paste supplier Heraeus and one against its customer SolarWorld, for infringing on DuPont patents for DuPontTM Solamet® PV metallization pastes.

Cheng asked for increased support from the industry to guard against infringement and stronger opposition to the use of “infringing” materials in the production and sale of downstream products by cell and module makers, PV system developers, installers and owners. Infringing companies expose themselves, and potentially others they do business with, to the full range of legal remedies.

Heraeus argued that DuPont’s statement that Heraeus engaged in IP theft was false and misleading.  Though this statement didn’t appear in precisely those words in the press release, it was a reasonable inference that could be drawn from the press release, given the juxtaposition of statements about IP theft and statements about DuPont's lawsuits against Heraeus.  “[I]n stating it has filed two lawsuits against Heraeus alleging patent infringement (a statement that is true on its face), DuPont is, ipso facto, alleging Heraeus has committed intellectual property theft.”  While Heraeus argued that DuPont’s statement was false because DuPont’s lawsuits failed to allege any copying, misappropriation, willfulness or other conduct that could be reasonably characterized as “theft,” the court thought that was a mistake.  Because a patent is IP, the distinction between “patent infringement” and “IP theft” is a distinction without a difference.  (Really?  Could Heraeus be prosecuted for selling stolen property, then?  For purposes of a Lanham Act false advertising counterclaim, I agree with the court, but that hardly means there’s no difference between theft and infringement.)

Because the counterclaim depended on a patentee’s assertion of its patent rights, in addition to the ordinary Lanham Act elements, Heraeus was also required to allege bad faith, which it didn’t do.  The counterclaim was dismissed with leave to amend.