Defending Patents with Notice Letters

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 quickly to put a stop to it. In many cases 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 typically is 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. By starting 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 anyway can be a useful tool in litigation. If the defendant continues to infringe despite knowing that infringement has been alleged a court may conclude 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 will fully infringed a patent. See Halo Elecs. V. Pulse Elecs., 136 S. Ct. 1923, 1930 (2016). A notice letter can also satisfy the knowledge prerequisite for bringing a contributory infringement or induced infringement claim against the infringer.
• Offering potential solutions. Because a notice letter’s purpose is chiefly to 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 declaratory judgment by the 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 declaratory judgment 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 away from the patent owner, by choosing where the declaratory judgment action is filed and how the controversy is framed.

It is difficult to draft a notice letter that doesn’t risk triggering an action for declaratory judgment. A declaratory judgment is available anytime “there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to 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 in fringer to establish a “substantial controversy” or “adverse legal interests” sufficient to seek a declaratory judgment. The bare fact that a potential infringement exists can be enough.

The risk of declaratory judgment, 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 in fringer has a number of strategic advantages. In addition to avoiding an action for declaratory judgment, 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 by the in fringer at the Patent and Trademark Office (post-grant reviews and inter partes reviews).