What Constitutes Intellectual Property Infringement?

What Delaware and federal courts say regarding patents and copyrights

Intellectual property is a catch-all term that refers to a variety of legal rights a person or business may hold in an intangible asset. The three most common forms of intellectual property in the United States are copyrights, patents, and trademarks (or service marks). Infringement refers to the illegal use of someone's intellectual property without their permission.

Federal vs. State IP Laws

The first thing to keep in mind about IP is that most of it is governed by federal law. The United States Constitution grants Congress the power to legislate copyrights and patents. This includes the power to define what acts constitute infringement and the remedies available to the intellectual property holder. At the same time, Delaware state law also plays an important role in the IP system. Many contracts governing the licensing, sale, or other disposition of IP fall under Delaware state law. And Delaware courts are often called upon to resolve legal disputes involving the use (or misuse) of IP. If you're involved in a dispute over IP, an experienced attorney can help.

With respect to infringement, federal IP law typically defines that term as follows:

  • For copyrights, infringement occurs when someone reproduces, distributes, performs, or publicly displays a work without the owner's permission; it is also considered infringement to produce any “derivative works” based on the original copyrighted work.
  • For patents, infringement refers to making, using, selling, or offering to sell any “invention” that is still under patent protection.

Trademarks are bit more complicated. Unlike copyrights and patents, trademarks are subject to both federal and state law. In Delaware, a trademark must be registered every 10 years to remain in effect. Infringement under state law includes the unauthorized “reproduction, counterfeit, copy or colorable imitation” of a registered mark in connection with the sale of any goods and services, to the extent such sale might confuse consumers.

The Role of Delaware Courts in Federal Patent Litigation

In recent years, Delaware has experienced a notable increase in intellectual property infringement litigation. This is largely due to a May 2017 decision from the United States Supreme Court, TC Heartland LLC v. Kraft Foods Group Brands. This case specifically addressed patent infringement. Under federal law, a party alleging patent infringement must file their lawsuit in the federal judicial district where the defendant “resides.”

In a prior ruling from 1957, the Court said a corporate defendant “resides” in the state where it is incorporated. Congress later amended the patent statutes to say a defendant may reside in any state where they are under the “personal jurisdiction” of the local federal district court. Notwithstanding these amendments, the Supreme Court held in TC Heartland that when applied to domestic corporations, “residence” for purposes of patent infringement still refers solely to the state of incorporation.

What this means is that if a company is incorporated in Delaware, it must be sued for patent infringement in Delaware federal district court. Given that “more than two thirds of the Fortune 500 and 80 percent of all firms that go public” are incorporated in Delaware, according to the state's Division of Corporations, that naturally means the First State will continue to play a leading role in handling patent infringement lawsuits.

For more information on this area of law, see our intellectual property overview.

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