Avoiding patent litigation: pragmatism rather than protagonism


Inventors ultimately want to see their brain children enter the market place, not only as a matter of pride but also to realize commercial benefit, where possible. When considering this goal the threat of patent infringement may not be immediately obvious. However, good ideas which have shown commercial success are invariably copied by competitors, for example, copying is rife in the smartphone arena and has resulted in multinational patent 'wars' - Apple and Samsung being the most well known currently.

The very purpose of a patent is to provide for the protection of the invention which allows the patent holder means to protect from copying by a competitor. This protection ensures the patent holder is able to enjoy the full commercial benefit from the commercialisation of the invention. Where a competitor copies the invention or otherwise infringes the patent holder's rights, they can sue this infringing competitor. 

It is often shocking how involved and how expensive suing an infringer can be. Actions for patent infringement can take many years to get to court and are often burdened with a number of ancillary steps which do not deal directly with the issue of patent infringement but rather with the legal procedural issues. Not only are such delays frustrating they are expensive. Furthermore, in the event that the patent holder loses the case they may also become financially responsible, in terms of a costs order, for a portion of the legal costs incurred by the other party. 

The quandary is given that good ideas are generally copied, in order to preserve one's market, it becomes necessary to take steps against the infringer. When considering suing the infringer, the first step taken is usually to send a letter of demand. A letter of demand, typically sent through the patent holder(s) attorney, is the cheapest and easiest manner of communicating the seriousness of the matter to the infringer. Should the letter of demand not lead to the desired outcome, litigation could be the next step. Following the service of the summons the litigious process continues until a final end and determination is reached in court, alternatively until the parties reach a settlement. In light of the potential time delays and the costs associated with such litigation my advice is to look at other options first. A settlement entered into between the parties as early as possible during litigation will save both time and costs. In reality the most pragmatic approach may be to offer the infringer a licence. If such arrangement can be agreed, the patent holder can at least maintain control over precisely which rights are licensed, the percentage royalty payable in terms of the licence and various other aspects relating to the sale and marketing of the product, for example, the branding of the product. Furthermore, in the event that the licensee (previously an infringer) does not comply with the arrangements agreed to, they are in breach of the licence agreement, giving additional, often more practical, legal recourse.

As a general approach, as Wits we would avoid expensive litigation, and rather embrace the fact that a party is using a Wits owned patent as an opportunity to license, and empower that party to make a success of the product. For a reasonable share of the spoils, of course!

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