Imagine you’ve started a business in your industry. You’ve identified and adopted the latest and most up-to-date technology, optimized it, and re-configured it to suit your business and to your advantage. You’ve innovated and built new processes and systems on top of existing solutions to create your unique offering.
You’ve worked hard to get here. Over the years, you’ve faced stiff competition, changed your business model, iterated, but persistence has paid, and you’ve finally found your much deserved name, fame, and success.
You sigh in relief. And after a pat on the back, you decide to take your foot off the pedal for a bit.
Right then, a suspicious looking email sneaks into your inbox:
SUB: YOUR BUSINESS NAME – PATENT INFRINGMENT NOTICE
We believe that your business method/product/brand directly infringes upon our issued and granted patent, PATENT NUMBER, that relates to “exactly what your business does” and hence, requires a license for continued commercial use. The granted patent and “so-called proof” of how your business infringes upon it is attached for your perusal.
Accordingly, we would be happy to extend a licensing offer with favourable terms should you be willing to accept and “give us a portion of your hard-earned money as long as you are in business.”
We hope to reach a mutually beneficial resolution without having to see legal action.
Thank you for your timely cooperation. We look forward to hearing from you by “date-you-better-adhere-to (or else..).”
First, you get curious about this unknown entity/person. Then, you skim through the documents that purportedly establish proof that you’re using “their technology”. And when nothing makes sense, you break into a sweat and wonder if everything you’ve worked for is destroyed, and that your business could potentially shut down as a result of this.
Those who’ve encountered such situations in their own businesses would vouch that keeping calm goes a long way. There is no need to panic or dial S.O.S just yet. There is also no need to respond in impulse; or make premature statements about your product, process, and/or the granted patent in issue; or make hasty conclusions without fully understanding the matter. It’s important to breathe and take things step-by-step, as follows:
Know your enemy
It is easy to determine whether this infringement action is being enforced by a genuine entity or what is known simply as a “patent troll”.
A genuine entity would be a known business entity or an individual who, having invested significant time and effort in building a business around their granted patents, are genuinely impacted as a result of your business. This could include competing entities that you may already know who may wish to be fairly compensated for their granted patents and capitalise on it. Quite often, a round of negotiations with such parties with help from respective attorneys on either side would typically help resolve the matter at hand quickly and fairly.
Patent trolls, on the other hand, are completely different creatures.
Who are patent trolls?
Patent trolls are usually non-practising individuals or entities backed by attorneys who apply for and obtain dubious patents on a range of subjects. They have no real interest or intention to build businesses around their patents. Instead, they target successful-to-moderately successful businesses on the merit of their dubiously granted patents in relevant business domains to financially benefit from them. Their business model is simple: File patent applications, obtain granted patents, hire private attorneys, and go after targeted companies by filing lawsuits.
How do you deal with patent trolls?
Of course, as in the case of legitimate businesses, with patent trolls too, your strategy could be to negotiate and arrive at a settlement, rather than pursue a long and usually expensive battle against them. However, negotiations with patent trolls usually do three things:
- It emboldens them to pursue similar claims against other industry peers, thus causing problems in the industry.
- It gives them undue credit and relevance, and validates their existence, without their having established the authenticity and/or relevance of their claims.
- It gives them an opportunity to target your company/business again when you least expect them to.
So, while a one-time settlement may be cost effective in the short-term, the long-term consequences of doing so may be detrimental to innovation and your business as well.
What can you do instead?
As a first step, it is advisable to neither dismiss the accusations of infringement as being frivolous nor accept it as truth. Instead, you may take several proactive steps to keep a running conversation going and try to understand the problem in a diligent manner.
In short, you can welcome the trolls.
Ask – get as much information as you can
For any infringement to be valid, the entity claiming infringement must provide sufficient proof to establish such an infringement. Proof could be in the form for videos, photos, brochures, product demos, and/or some form of presentation that clearly details how your business or offering is related to and similar to the patent in question. If they haven’t provided this yet, ask for it.
A granted patent stands on the merit of its claims. Claims of a granted patent can usually found towards the end of a long descriptive document. The claims may be related to a “method” or a process for performing an operation, or an “apparatus” or a device having unique components that help achieve a certain result.
Accordingly, the most substantiative proof that you can ask for is a “Claim Chart”, that clearly maps how every claim included the granted patent in question is related to your business or offering. If they haven’t provided this yet, ask for it.
Read – target the loopholes
You know your business well enough. So, spend time reviewing the proofs that have been handed to you, including the Claim Chart. See if the claims made and comparisons drawn to your business co-relate or make sense. Take notes and identify loopholes or any significant differences you may find in what is claimed and what you’ve implemented.
Claims need support
All claims in a granted patent must be supported by a detailed description that backs such claims. Spend time reading the description of the patent to see if the claims are well supported. It may well be that what-is-claimed and what-is-described may not be in conformity at all and that gives you an opportunity to question such a disparity.
Communicate – discuss the loopholes
Interpretations of claims and related description of a granted patent are always open for discussion. While the patent troll may interpret the claims to mean one thing, you, on the other hand, based on your own analysis and assessment and understanding, may interpret the claims to mean something else. This difference in point of view would be useful in countering the claims of the troll.
Show a mirror – close the loopholes
Typically, one would not expect patent trolls to back down easily by merely questioning or countering their assertions. On such occasions, it may be useful to examine if there are other patents/patent applications or non-patent literature that predate the granted patent cited by the patent troll. Such documents are called “Prior Art”. (Check the priority date of the granted patent in question. A granted patent may be enforceable against any entity that is found to be infringing upon it from the date of its priority).
If you’re technically involved and have been the business for long, you may already have or know of different sources from where you could gather such information. You may even consult industry veterans for help.
You may even outsource such work to a good patent law firm that could help provide you with valuable insights in respect of the “Claim Charts”, interpretations of the claims/description, and also help you conduct an “Invalidity Search” to look for and identify relevant and related Prior Art.
There are other ways to go about this as well, such by offering a reward to anyone who can identify the closest and/or best Prior Art in relation to the granted patent in question. You are free to choose which means suits you best, based on the resources you have at hand.
Responding to patent trolls with Prior Art would further solidify your position and would put the onus back on them to counter the Prior Art with their own.
Call for reinforcements – seek help from others
It may well be that the patent troll you’re dealing with has approached other entities with similar claims and accusations of infringement. Make a call for help. Blog about your issue openly and seek out those who may be involved or interested in being involved in this matter.
You may also actively join, participate, and seek help from several patent communities, such as the Open Innovation Network, that consolidate IP assets from its members to help counter such infringement claims. This way, you can also pay it forward when other members in the group are in a position similar to yours on a future occasion.
Take a stand – keep the trolls away
Having garnered support from various communities and countered the infringement claims with your own efforts, if you’re still embroiled in a lawsuit, then it is possibly time to take a strong stand against the patent troll and let the world know about it. While this may cost you significant time, effort, and other resources, the message you’ll be sending to all such patent trolls in future is that no easy money can be made without years of hard-work, dedication, and effort to innovate and excel in your business.
Note: It is always advisable that such infringement matters be discussed in detail with a qualified patent attorney or a law firm dealing with patent infringement issues. They will have the qualifications to deeply understand the technology and nature of your business in addition to having expertise in analysing such troll patent(s) in-depth and identifying relevant issues. They will help you understand the contents of the supposed infringed matter better and provide you with valuable recommendations and guidance. This will help you make an informed decision at each step.