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Dealing with a patent infringement claim
Posted in Patents

You have various options when you receive a letter accusing you of patent infringement.

Traditional Options

The traditional options have been: 

Continue the allegedly infringing activity, maintaining that either the conduct does not infringe or that the patent is invalid; 

Discontinue the activity; or 

Obtain a license. 

If you choose the first option, conventional wisdom mandates that you obtain a well-reasoned, written legal opinion that your actions do not violate the patent or that the patent is invalid. Otherwise, you could be liable for willful infringement, and the potential remedies of treble damages and attorneys' fees. 

A legal opinion is protected by the attorney-client privilege, so the client is not obligated to produce it in an infringement litigation. Courts may no longer draw a negative inference if a legal opinion is not produced, whether or not one was obtained. Instead, the totality of the circumstances must be considered. Nevertheless, you might decide to waive the privilege to rely on a favorable legal opinion because this can be an important element in fighting a claim of willful infringement.

If the claim was asserted against a number of companies that seem to be similarly situated, you might benefit from contacting other alleged infringers to coordinate your defense. This may be helpful even though a plaintiff is not permitted to join multiple defendants in a single lawsuit where the sole basis for joining the defendants is the alleged infringement of the same patent. 

Of course, either discontinuing the activity or negotiating a license may be the better course of action for business reasons. 

New Validity Challenge Options

The America Invents Act, has made new procedures available to challenge the validity of a patent, in addition to its many other important patent law changes. 

During examination, you may anonymously submit relevant prior art to the U.S. Patent and Trademark Office along with arguments to establish that the invention is either not novel or is obvious.  This may prevent issuance of the patent or at least reduce its scope. 

Within 9 months from the patent's grant, you may request a "Post-Grant Review" challenging its validity on a variety of bases. 

After 9 months, you may request an "Inter-Partes Review," again challenging the patent's validity on novelty or obviousness grounds.

At any time after the patent's grant, you may request an "Ex-Parte Reexamination," again challenging the patent's novelty but this time you may not actively participate in the proceeding.

Litigation

Once you reasonably anticipate litigation, you are obligated to preserve all documents and things that relate to the subject matter of the dispute, whether stored in physical or electronic form.  You should inform all relevant personnel that there is a "litigation hold" and that all routine document retention or destruction procedures are to be suspended.

If you must defend against a patent infringement action, there are many possible approaches.  You should discuss litigation strategy and costs with your attorney, but some things to consider include:

Review your insurance coverage to see whether the insurance company is obligated to pay for your defense, and possibly for any damages awarded against you.

Review any supplier contracts to see whether you may be indemnified.

Have the patent carefully reviewed as to the possible invalidity of some or all of its claims.

Have your activities carefully reviewed because you may not be committing infringement if you do not perform all of the steps stated in each of the patent claims.

If you believe the patent infringement claim is weak, or you are concerned that you may be sued in a place that may be unfavorable or inconvenient, consider bringing a preemptive action for a declaratory judgment of non-infringement. 

Conclusion

Although it can be unnerving to receive a lawyer's letter charging you with patent infringement, there may be a number of actions you can take.  Many such claims can be settled quickly and relatively inexpensively. 

For further information about patent litigation, please contact Mark Montague or J. Christopher Jensen

This ON MY MIND™ Blog post © 2015 by Cowan, Liebowitz & Latman, P.C., New York, NY.  

Suggest topics for future Blog posts to law@cll.com.

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