Enforcing your patent portfolio: Tips to think about before enforcing your patents

While litigation can be costly and very time-consuming, it provides finality that other alternatives may not be able to bring

Once a company has evaluated its IP portfolio, it must decide how to leverage that portfolio to provide long-term revenue streams and value to its shareholders while being faithful to its business model and vision. To do so, a company must understand the landscape of potential infringers and identify what outcome it wants to achieve from enforcing its IP portfolio. Is the company seeking additional revenue streams from enforcing its patent portfolio? Is the company seeking to stop infringing behavior from a competitor that may otherwise have an adverse effect on the company’s business? Is the company’s strategy to file litigation against any perceived infringer no matter what? Once those goals are identified, a company must then decide whether litigating is the best strategy to pursue.

Conduct a pre-suit investigation

Before filing any litigation, a company needs to determine how strong its case is against any potential infringer(s). To win a patent infringement lawsuit, not only will the company need to prove infringement, but it must also overcome any defenses asserted against it, such as patent invalidity. In other words, having a patent does not mean a company is guaranteed to prove infringement and validity and thus prevail.

The first step a company should take before filing a lawsuit — which is also required by many jurisdictions — is to conduct a thorough pre-suit investigation before filing a lawsuit. The pre-suit investigation should involve at least the following tasks:

  • Drafting infringement claim charts (i.e., mapping out each claim against each accused product, device, method, or process that is accused of infringing)
  • Performing and reviewing a prior art search
  • Determining whether the potential infringer would file an inter partes review or reexamination on the company’s patent(s) (and determining the likelihood of success)
  • Reverse-engineering the accused product (if possible)
  • Reviewing the potential infringer’s business activities (to determine sales and potential damages)
  • Interviewing the inventor of the patent or other key witnesses (to determine strengths, weaknesses, and overall likelihood of success)

Not only will a thorough pre-suit investigation assist a company in determining whether it needs additional information before proceeding with a lawsuit, it will better prepare the company when the lawsuit is filed so it will not be caught off guard by any potential defenses or other issues raised during the suit.

It is also important at this stage to find and preserve any evidence and to gather any documents. This will make the discovery process during the lawsuit proceed smoother. In conjunction with preserving evidence and gathering documents, it is also important, especially for public companies, that only those who need to know are notified of the potential lawsuit filing. If word gets out before a company decides to file a lawsuit, a declaratory judgment action could be filed by the potential infringer against the company in a venue of their choice.

Consider sending a cease-and-desist letter

Depending on the number of potential infringers, a company’s budget, and other similar considerations, a company may decide to send a cease-and-desist letter to potential infringers prior to filing suit, informing the infringer that it may be engaging in infringing activity. A cease-and-desist letter may, however, trigger the potential infringer to file a declaratory judgment action against the company asking that a court declare that it does not infringe (or that the patent is invalid), in which case the company is put in the undesirable position of playing defense rather than offense. On the other hand, a cease-and-desist letter may also open the door for settlement discussions between the two companies so that a lawsuit does not need to be filed. However, a company should not send a cease-and-desist letter unless it intends to follow through with litigation if the potential infringer does not respond.

Develop a litigation plan before filing suit

If after conducting an adequate pre-suit investigation (and possibly sending out cease-and desist letters), a company decides that it wants to pursue a lawsuit, the company should consider making a litigation plan. The litigation plan should include:

  • A budget for litigation costs that should span from the filing of the lawsuit to trial (outside counsel can help assist with this process if this is the first time a company has filed a patent lawsuit)
  • A decision on which venue to file suit (outside counsel can help analyze which venue would be best for filing suit, any procedural hurdles, whether the venue is traditionally quick or slow, the need for hiring local counsel, and past results)
  • An understanding of evidentiary issues that may need to be flushed out on both sides, including what evidence is still missing to support the case and what evidence the potential infringer may have to support its defenses
  • A strategy for moving the case along (including a discovery plan, any anticipated motions filed by either side)
  • A firm idea of what the company hopes to achieve by filing suit
  • Alternatives to litigation

Conclusion

Good IP portfolio management includes understanding the objectives for enforcing the IP portfolio, including legal remedies that will bring value to a company’s shareholders and protect the company’s competitive market share, all while being faithful to its business model and vision. While litigation can be costly and very time-consuming, it provides finality that other alternatives may not be able to bring. However, a company’s ability to successfully leverage and manage its IP portfolio into one of the company’s strengths will bring long-term shareholder value, and sometimes litigation is the way to do it.

Contributing Author

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Michael Rodriguez

Michael Rodriguez is a partner in Munck Wilson Mandala’s Intellectual Property section where he concentrates his practice in all areas of intellectual property with an...

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Contributing Author

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Kelly Chen

Kelly Chen is an associate at Munck Wilson Mandala, and is a member of the firm's litigation section where she concentrates her practice in the areas of...

Bio and more articles

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