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If you believe that your patent is being infringed, measured yet decisive enforcement action should be taken. We are expert patent attorneys ideally placed to assist with patent enforcement. Please contact us to discuss how we can assist you.
Well-managed enforcement action can lead to a prompt, positive resolution of the matter. That resolution might be your choice of collecting a royalty for past infringing acts, collecting a royalty for future infringing acts and/or excluding a competitor from the market.
Mismanaged enforcement action can lead to a protracted court dispute that may cost much more than any royalties you might collect (not to mention the consumption of management time). Indeed, if you make an unjustified threat, you may have to pay damages to the “infringer”.
Swift action is recommended. Whilst it’s possible for penalties to be payable for infringing acts as long as six years ago, a court may decline to order the infringer to pay royalties if you have ignored the infringement for an extended period. Additionally, swift action sends a signal to the market that deters any other would-be infringers. If you ignore an infringement, you may well find that you have more than one infringer to deal with.
Firstly, it is important to confirm that there is in fact infringement. The coverage of a patent is defined by its claims. A superficial similarity to the invention described in the patent is not enough (more on patent coverage). A threat in relation to non-infringing actions would be unjustified and may result in you having to pay damages.
Secondly, it is important to assess the validity of the patent. A threat in relation to a patent that you have good reason to believe is invalid is likely to be considered unjustified, which again may result in you having to pay damages. You might have good reason to believe that your patent is invalid if, for example, after your patent was granted you became aware that similar inventions were publicly known before your patent application had been filed.
These first and second steps might reveal that the coverage of the patent needs amendment. Making the amendment before alerting the infringing party will simplify the process.
Once you have reached the view that at least one of the patent’s definitions of coverage is valid and infringed, it’s time to contact the infringer. This first approach is important and sets the tone for the subsequent exchange. A professionally prepared “letter of demand”, specifically setting out your concerns and proposed resolution, improves the prospects of efficiently reaching a favourable outcome.
Typically, an exchange of letters will then follow with the infringer’s patent attorneys (or lawyers) attempting to negotiate a more favourable outcome for their client. Hopefully, a negotiated agreement can be reached. If so, it’s important to have that agreement properly documented in a professionally prepared settlement agreement.
Proper documentation reduces the chances of further dispute, e.g. reduces the chances of there being genuine misunderstanding between the parties as to what was agreed, and reduces the chances of one of the parties reneging.
If the parties cannot agree, then you may turn to some form of “alternative dispute resolution” such as mediation or arbitration. Mediation is a form of negotiation often conducted with both parties in the same building but not in the same room. A mediator acts as go-between to provide a more rapid but less formal exchange of ideas between the two groups than is accomplished through traditional negotiations. Arbitration involves both parties agreeing to a process and to accepting the ruling of an agreed decision-maker (the arbitrator).
Instead of alternative dispute resolution, or if alternative dispute resolution fails, the next step may be to sue the infringer in the Federal Court. Routinely, the infringer will “cross claim” in the court proceedings, asserting that the patent is invalid. Typically, both the infringement proceedings and the validity attack will be heard together. This is the “liability” phase of the proceedings.
Once it has been established that the alleged infringer is liable (i.e. that they are an infringer and that the patent is valid), the court will turn to considering the penalties to be applied (more on patent infringement penalties). This is the “quantum” phase of the proceedings. Typically, the “losing” party will be ordered to pay the other party’s court costs.
Most patent disputes are resolved by agreement before going to court. Both parties have a powerful incentive to reach agreement before the matter goes to court, because patent enforcement proceedings are notoriously expensive. They also take a long time – most proceedings take more than a year to resolve.
Please contact us to discuss how we can assist.
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