Defending a patent against infringement requires diligence and care. Keeping tabs on the marketplace for infringement can itself be a time-consuming and difficult effort, especially when a patented invention is hard to detect without extensive analysis. Once an infringement is identified, the patent owner should move quicklyto put a stop to it. In manycases a properly worded cease-and-desist letter, or patent notice letter, can be enough. If the infringement doesn’t stop, the notice letter can be a useful tool in the ensuing litigation.
The role of the patent notice letter
A patent notice letter is often the best first step for protecting a patent against infringement. A properly drafted letter at a minimum identifies the owner’s patent, describes in detail the infringing products, provides the patent owner’s contact information, and proposes a solution to the problem. The proposed solution might be an offer of a license or a demand that the other partycease using the technology. Such letters have a number of important functions. Here are just a few:
- Avoiding litigation. Although preventing infringement should be the top priority, avoiding the expense of litigation is a significant reason to send a patent notice as soon as possible after the infringement is discovered. This is an area where the interests of the patent owner and infringer can sometimes align, to the owner’s benefit.
- Putting the infringer on notice. Before a patent holder can recover damages for infringement the infringer must be on notice that the invention is patented. 35 U.S.C. § 287(a). For manufactured goods this typicallyis accomplished by printing “patent” or “pat.” on the product itself. Absent such clear labeling on a copied product, the patent holder’s next option is to send a notice letter. If the infringer ignores the letter and continues to infringe, the owner can seek damages for infringement that occur after the notice was received. Bystarting the “damages clock” with a notice letter rather than a complaint filed in court the patent holder gives the infringer added incentive to stop infringing.
- Creating a litigation tool. Evidence that the infringer received a patent notice letter and continued to infringe anywaycan be a useful tool in litigation. If the defendant continues to infringe despite knowing that infringement has been alleged a court mayconclude that the infringement was willful. A patent owner can seek enhanced damages (up to triple damages, with the possibility of attorney’s fees as well) from defendants who have willfullyinfringed a patent. See Halo Elecs. V. Pulse Elecs., 136 S. Ct. 1923, 1930 (2016). A notice letter can also satisfythe knowledge prerequisite for bringing a contributoryinfringement or induced infringement claim against the infringer.
- Offering potential solutions. Because a notice letter’s purpose is chieflyto establish a firm notice date, it need not make specific demands or threaten litigation. Some patent owners like to include an offer of a license or an invitation to enter into negotiations. Although not required, such offers leave open the possibility of a constructive relationship and a potential revenue stream.
Pitfalls of patent notice letters
The risk of an action for declaratoryjudgment bythe infringer is one reason why notice letters need to be carefully drafted, with due consideration of the facts and the potential legal arguments that may follow. By placing an infringer on notice the patent owner also gives the infringer a reason to get ahead of the issue by asking a court to issue a declaratoryjudgment under 28 U.S.C. § 2201(a) that the use is not in fact infringing. By doing so the infringer can take some of the initiative awayfrom the patent owner, bychoosing where the declaratoryjudgment action is filed and how the controversyis framed.
It is difficult to draft a notice letter that doesn’t risk triggering an action for declaratoryjudgment. A declaratoryjudgment is available anytime “there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and realityto warrant the issuance of a declaratory judgment.” MedImmune v. Genentech, 549 U.S. 118 (2007). The notice letter doesn’t need to threaten litigation or even take an aggressive posture for the infringer to establish a “substantial controversy” or “adverse legal interests” sufficient to seek a declaratoryjudgment. The bare fact that a potential infringement exists can be enough.
The risk of declaratoryjudgment, weaknesses in the patent owner’s case, commercial considerations, or other factors can make an immediate lawsuit preferable in some situations. Filing litigation without first giving notice to the infringer has a number of strategic advantages. In addition to avoiding an action for declaratoryjudgment, it gives the owner the first choice of forum and allows the owner time to develop a legal strategy. It may also avoid state law claims and actions bythe infringer at the Patent and Trademark Office (post-grant reviews and inter partes reviews).