Patent problems

Your company has just launched an exciting new product. You have great industry buzz, and sales are starting to come in.

Everything is rosy, when, out of the blue, a certified letter lands on your desk accusing your company of infringing a patent owned by a company or individual you never knew existed. The letter gives you one week to stop producing and selling the product or you’ll face a lawsuit. What do you do?

More and more companies with successful products are receiving letters accusing them of infringing a patent. There are individuals and companies that purchase patents just to enforce them in hopes of a settlement or licensing fees.

No company is immune from these nuisance suits, and owners and officers should know how to respond when a cease and desist letter shows up.

Ignoring a cease and desist letter is risky and may lead to costly litigation and large damage payments, including the patent owner’s attorney fees.

The first thing to do is call a competent patent attorney. He or she will analyze the patent you are accused of infringing and compare the patent claims to your product to determine whether the patent is infringed and valid, then reduce this analysis to a written opinion.

Don’t underestimate the importance of obtaining a written opinion. If your patent attorney determines that your new product does not infringe the patent or that the patent is invalid, this opinion will protect you against paying enhanced damages and the patent owner’s attorney fees if the owner prevails in litigation.

Even if a court disagrees with your attorney’s opinion and finds that the patent is valid and infringed, because you relied in good faith on an opinion from a competent patent attorney, you will not be found guilty of willful infringement. If you ignore a cease and desist letter and do not obtain an opinion, however, you will most likely be found guilty of willful infringement and be liable for enhanced damages and attorney fees.

If the patent is valid and infringed, the opinion may also suggest possible ways to design around the patent or recommend that you obtain a license to make the product. David V. Radack is an attorney with Eckert Seamans Cherin & Mellott LLC.

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