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September 23, 2005

What can you do?

Every now and then I get a call from an independent inventor with a valid, issued utility patent who feels that his patent is being infringed. Upon review of the patent, file history and scrutiny of unlicensed products for sale in retail settings, a prima facia case of infringement can be made.

What can be done? I'd like to open a discussion.

Of course, cease and desist, followed by infringment lawsuit. But the economic realities often preclude an all out confrontation. Typically, all the client wants is a fair royalty payment....

Ideas?

Posted by Peter Haas at September 23, 2005 6:06 AM | Litigation

Comments

This is a topic of considerable interest to me - but I have nowhere near the level of experience to write with authority here.

I'd just like to float one idea: Might the mere filing of a complaint against a large company sufficiently compel them to take you seriously? I presume that big, established companies like General Motors receive a half-dozen C&D letters a week, and so may be desensitized to this; but I doubt they receive notice of having been served with a complaint. May be enough to convince them to take notice - especially in light of the $8.3MM fine against Ethicon for ignoring just such a situation.

In this light, I would guess that a straightforward complaint could be prepared and filed within even a sole inventor's budget. Don't the real costs of infringement come from discovery and trial? And wouldn't that impending, unavoidable cost be even more leverage over the alleged infringer to settle?

- David Stein

Posted by: David Stein at September 24, 2005 12:01 PM

Of course, filing a lawsuit might jump-start negotiations for a fair royalty. And, this, I suspect, is the ultimate answer.

Related to this, see the thread on contigency lawsuits (this web site). And, conversely, see the thread on patent trolls.

Things are never black and white.

Posted by: Peter Haas at September 27, 2005 8:39 AM

Accusing someone of infringement in a letter provides a window for the infringer to file for declaratory judgment, thus putting the patent holder on the defensive; better to be the plaintiff. Notice letters should point out the subject matter of the claims, and how the infringer is practicing the subject matter, without directly accusing of infringement.

It’s essential that a patent be vetted for validity, as well as being as sure as possible about infringement.

As patents are “the sport of kings”, the best an inventor can do is find a patent consultant to help guide the inventor in the process of preparing for enforcement, which includes the above vetting, and preparation for presentation to a contingency firm or patent licensing company. Even that might cost $5,000 - $10,000.

Posted by: Gary Odom at September 27, 2005 11:56 PM

Yes, I agree that it is vital to carefully phrase the initial letter to avoid a dec judgement filing ("end around") forcing a premature suit in a foriegn venue to the patent owner. In fact, a patent attorney should be involved BEFORE this letter goes out to avoid prejudicing any rights involved.

There are many horror stories on this....

Posted by: Peter Haas at September 28, 2005 8:02 AM