How to deal with patent disputes

Jason Boakes, a partner at Secerna LLP, explains how patents can help you protect your innovations – and what to do if you’re accused of infringing someone else’s

Businesses need to protect their key inventive concepts to stop anyone else benefitting unduly from their research and development efforts. Although copyright and design rights can be useful, a patent typically provides the strongest and broadest protection. In the fast-moving area of LED lighting, the number of patents filed in the UK each year more than quadrupled between 2000 and 2010.

A patent is an intellectual property right that can be enforced against others who make, do or sell something that falls within its scope. Patents effectively grant a 20-year monopoly so the owner can exploit their idea and reap the rewards. They are vital for fostering innovation, and if companies believe their patent rights have been infringed, they will protect them vigorously.

But not every accusation of patent infringement stands up, and the disputes can end up being long, drawn out and costly. Here’s what you need to know to protect your new developments and defend your company if it is accused of patent infringement.

If you have innovations to protect…

    To obtain a patent, seek out a chartered patent attorney and ask for their help. Typically a patent application based on an invention will be prepared and filed within a few months of an initial meeting. It is vital that you don’t disclose the invention to anyone before the date the application is filed. Information available about an invention before an application was made for a patent – including published patent specifications or references in books or articles – is known as ‘prior art’, and can be used to attack the validity of the patent rights.

    Typically, after filing a patent application an independent patent examiner will assess whether the invention defined in the application is new and inventive enough for a patent to be granted. Once a patent has been granted, your company has the opportunity to prevent others from making use of your invention without your permission in the country where the patent was granted.

    It is crucial to monitor competitors’ activity in your market and make them aware as soon as possible if you own patent rights that you think they are infringing. It is important to identify the patent number of any patent you feel is being infringed, and to take advice on how to go about notifying competitors of your rights, so that there’s no risk of your initial correspondence with them being judged to be an unjustifiable threat.
    Don’t be tempted to claim that you have a patent when you don’t – this could get you in trouble. There is a possibility that any warning of alleged patent infringement could in itself be actionable if it is considered a threat of legal proceedings when a patent has not actually been infringed, or when the person sending the warning knew that the patent in question was invalid.

If accused of infringing a patent

    The fear of being forced to stop manufacturing a product, remove it from the market or pay substantial damages can make companies accused of patent infringement enter costly licensing deals before finding out if they really need to. Seek help from a patent attorney as early as possible to clarify your position and make sure you don’t end up taking any action that could give you even bigger headaches further down the line.

    Typically, an initial approach from a company that owns a patent will identify at most a few patents and something your business has done that they claim infringes them. However, sometimes a patent owner will just send a long list of patents they own and make a vague allegation about infringement. Establish exactly what patents they are claiming have been infringed. That means getting to the bottom of specific patent numbers rather than vague references. Then look at each patent one by one and see whether or not it has anything to do with what your company is doing. Often, a firm response asking for clarification on the point will make owners of large patent portfolios backtrack or lose interest.

    There are a number of ways you can react to patent infringement allegations. One way is to ignore the warning and carry on as you were. On occasion this can work since patent owners sometimes focus their efforts elsewhere. But there are substantial risks – not least the prospect of a successful infringement action being brought against you, which could cost hundreds of thousands or even millions of pounds. If this happens you might yet be able to agree a licence arrangement, but it is unlikely to be on terms favourable to you.

    Many small companies faced with threats of patent infringement suits end up negotiating licence agreements to settle the matter and avoid time-consuming and expensive litigation. But by doing this you could end up licensing patents that do not relate to your activities, and tying yourself into paying royalties needlessly.

    Whether or not negotiating a licence agreement is advisable will, of course, depend on the circumstances. A consultation with an experienced attorney will help you assess whether such a course of action is in
    your interests.

    It is often wise to prepare a defence against any future infringement action. The patent rights that are allegedly being infringed should be reviewed in detail – a patent attorney can carry out an analysis to determine whether or not a company’s actions actually constitute an infringement. If not, no further action may be needed. Explaining the reasons for this to the patent owner will often bring the matter to a close. You should also check for evidence of whether the invention was publicly known about before the patent application was filed. That may be enough to end the matter, or you could consider negotiating a royalty-free licence for strategic purposes.

    Another option is to take an aggressive stance. Once a particular patent or patents have been identified, you can try to get the courts to declare them invalid, or to declare that your actions do not infringe them. You can take your case to the Patents County Court which, reassuringly, has a cap on the level of damages and costs it can award, making it financially a lower-risk option than the High Court.

    Initiating proceedings in such a forum gives small companies an opportunity to take on bigger competitors. For those companies that are willing to take a more aggressive stance, there is also the possibility of arguing that the initial approach alleging patent infringement was threatening and groundless, in which case there may be remedies available. A patent attorney will be able to advise you whether that argument may prove fruitful.
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