A U.S. patent grants the owner the right to exclude (i.e., stop) others from making, using, selling, offering for sale or importing their invention into the United States. When a competitor infringes upon the patent, the patentee can demand that the competitor cease and desist from infringing upon the patent.
The following is a few factors that should be considered prior to communicating (e.g., sending a cease and desist letter) with the alleged infringer:
1) Review Patent Claims For Infringement: Before sending the cease and desist letter, the claims of the patent should be reviewed to determine whether the competitor’s product or process is infringing upon the patent. The patent provides protection for only what the claims covers literally or under the Doctrine of Equivalents. (see Avoiding A Patent). If it is clear that the competitor is not infringing upon the claims of the patent, then the patentee does not have a right to demand that the competitor cease and desist from their current practice.
2) Declaratory Judgment Action: Sending a cease and desist letter to an alleged infringer may give the alleged infringer the right to file a declaratory judgment action against the patentee in a court convenient to the alleged infringer but inconvenient to the patentee. The declaratory judgment action is a lawsuit filed by the alleged infringer asking a court to adjudicate the rights between the patentee and the alleged infringer. If an Orange County patentee sends a cease and desist letter to a New York company, then the New York Company may be able to file a lawsuit in New York requesting a New York court to adjudicate the rights between the respective parties. A patentee located in Orange County, California would have greater difficulty litigating a matter in New York. As such, the tone and words of the letter should be carefully selected to obtain the desired response.
3) Financial Strength: The relative financial strengths of the respective parties should be considered prior to sending the cease and desist letter. The cost of litigation can reach into the millions of dollars. Financially strong infringers may drain the financial resources of the patentee. As such, a strategy should be laid out with to meet the needs of the patentee to meet their company goals within their financial means.
4) Statute of Limitations and Doctrine of Laches: For patent matters, the statute of limitations is six (6) years. Patentees cannot recover damages against an infringer for their actions that occurred more than six years ago. The statute of limitations provides a bright line rule as to when damages against an infringer may be recovered.
The doctrine of laches does not have a bright line rule. Also, in contrast, the doctrine of laches operates to prevent patentees from asserting claims against an infringer if the patentee delayed in bringing an infringement action against the alleged infringer and the delay prejudiced the alleged infringer from defending the infringement action.
The factors above are only a few factors that patentees should consider prior to enforcing their patents against competitors. They could be dragged into court in an inconvenient forum. They could incur a substantial financial burden. Patentees should seek the advice of competent legal counsel before enforcing their patent.
Also read: Cease and Desist Letters
I invite you to contact me with your patent questions at (949) 433-0900 or James@OCPatentLawyer.com. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.