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By
Ronald
J. Riley
There are many ways to deal with
infringers. An infringement suit should be the last step. The first step
is to notify the infringer by certified mail. Your notice should be polite,
friendly, and firm. Seek a meeting with upper management and try to iron
out the problem in direct negotiations. Allow one month from the time they
receive the notice for them to respond.
It is important that you understand
how declaratory judgments can be used against you. If your letter to an
infringer states as an absolute that they are infringing they may sue you
for declaratory judgment in the jurisdiction where the letter is received.
If your letter to them states that they may be infringing they probably
will not be able to bring suit in their jurisdiction. It is a common tactic
of large corporations to sue for declaratory judgment hoping that the inventor
will fold.
If an infringer invites you to visit
them to discuss the possibility of a license - exercise extreme caution.
I have heard of a number of cases where such an offer was made to sucker
the inventor into going outside his jurisdiction. The inventor was sued
shortly afterward in the infringer’s jurisdiction, costing them many thousands
of dollars to defend themselves far from home. In such a situation, I suggest
you request that they come and meet in your jurisdiction.
If they haven't acknowledged your
initial contact, call the president or CEO of the company and request a
meeting. It is best to remain calm and allow your opponent to slowly come
to terms with the fact that you are not going to tolerate theft of your
intellectual property.
Companies have a personality the
same as individuals. Some are basically honest; while others are as slippery
as many used car salesman. There is a tendency for management of each company
to attract other people with the same values or lack of values. No one
likes to admit they are wrong; the same applies to businesses. The honest
companies will try to settle, but it may take several meetings and some
time to convince them, typically one to two years. Dishonest companies
must be shown that there is a price to be paid for their actions.
Companies that intentionally infringe
patents usually have other problems with the way they apply technology.
Infringers often cut corners in their engineering. A poor implementation
of your patent can severely damage your ability to market to others if
potential customers perceive the invention as being flawed as a result
of the infringers marketing of a poor design. You may be entitled to additional
compensation as a result of such damage. Identify deficiencies in their
implementation of the patent's concepts. It is possible to exploit a situation
where they have product liability exposure due to poor engineering. My
experience is that at least half of the parties that infringe my patents
produce designs that are hazardous.
You are an expert in the technology;
your patent(s) are evidence of that expertise. You can sell your expertise
to other parties who have been damaged or who may be damaged by an infringer’s
misapplication of the technology. This will help differentiate your design
from the poor implementation offered by the infringer and generate cash
flow while leaving the infringer with a serious customer relation’s problem.
Referring your client to other clients
that have the same problems is also an effective tactic. My experience
is that companies that have defective product are influenced by the fact
that many other purchasers of the product have the same problems. There
is a good chance that one or more of the companies that have been victimized
will demand that the infringer fix their problems at no cost. They might
even sue the infringer for damages. The infringer is going to get very
tired of dealing with irate customers. This will pressure them to settle
your claim.
Do not disparage the infringer in
any communication you have with end users. Confine your statements to issues
about the problems with implementation of the product that they purchased.
If you feel the product is poorly engineered be careful about how you impart
that to the customer. Do not tell the customer the engineering is bad,
tell them that there are considerable differences between different suppliers
and that xyz company’s implementation is much better. The purpose of this
approach is to help the customer come to his or her own conclusions concerning
the quality of the infringers product without opening the door for the
infringer to sue you.
Knowledge of the market place is
a valuable tool. If you know for whom the infringer is bidding jobs, you
can contact those people and inform them that you may seek an injunction
to stop the infringement. Most manufactures want to know about infringing
products, both to limit their own liability for selling or using a product
that infringes and to avoid any consequential damages they might suffer
as a result. In many cases, companies will not purchase product from a
company they believe is infringing to avoid being involved in the problem.
Seek legal advice before you start notifications because the wording of
the notification is important to avoid the infringer suing you in the jurisdiction
where the notice was given.
A patent infringement suit will take
several years to impact the company's bottom line. Notification of the
infringing companies customers or potential customers of infringement can
cause their customers to withhold or cancel orders; this has an immediate
effect on the bottom line. Since many organizations are motivated by short-term
profit, they may pay more attention to the loss of current or expected
jobs than they do a patent infringement suit.
Many management people are not aware
of changes in patent law that allows triple damages. A company is legally
responsible for knowing about current patents, either granted or pending.
Ignorance is not an acceptable excuse. They can be forced to pay up to
triple damages and your attorney fees under certain conditions. Punitive
damages are usually awarded for willful patent infringement.
Juries tend to take a dim view of
companies stealing from individual inventors. They are especially sympathetic
when the company is large or foreign owned. If polite persuasion didn't
work it does not hurt to play hardball. It is very important that you understand
both your and your adversary’s strengths and weaknesses before you get
into an all out war.
Gather as much information on an
infringing company as possible before notifying them because they will
take measures to block your acquisition of information as soon as they
realize you are a serious threat. Contact past employees. Companies that
steal intellectual property usually shaft employees and an ex-employee
that has not been treated well can be a gold mine of information that will
make your patent infringement case easier to pursue.
Current employees often will help
you if you ensure that their employer doesn't know of their involvement.
This is especially true of employees who have been mistreated that don't
feel they can leave, either because the job market is poor or because their
age makes it difficult for them to find another employer. It is very important
that you protect them as a source; failure to protect them is morally and
ethically wrong and will result in a valuable source of information drying
up.
Most companies that have dishonest
management have some honest people still on their staff. You should be
on the lookout for these persons. They are often stuck in a job that they
don't like. You should alert companies with which you have a good relationship
that have openings about these persons. A fringe benefit of helping place
persons at reputable companies is that they can afford to help you gather
evidence about a past employer. Do not request that they supply you with
confidential information while they are still employed by the infringer.
Doing so is not legal.
While investigating a patent infringement
case be vigilant for evidence of other wrong doing by the infringing organization.
Organizations that have questionable ethics often break the law in other
areas besides intellectual property, and exposure of that wrongdoing can
lead to the disreputable organization deciding to settle your claim.
If the battle escalates expect your
opponent to accuse you of inequitable conduct, a fancy term that means
you committed fraud to get your patent. Infringers like inequitable conduct
charges for several reasons, not the least of which is that they can go
after all your personal assets if they prevail. Both declaratory judgment
and inequitable conduct are tools often used by large entities against
an inventor. Both allow them to take depositions from you, which they will
compare and distort to their advantage.
A patent requires a long-term commitment.
Be ready to invest years, thousands of man-hours, and thousands of dollars
to successfully bring your idea to market. Don't get discouraged; all worthwhile
things in life require perseverance.
I urge all inventors to contact the
Alliance for American Innovation located in Washington, DC. The Alliance
provides the only full time Washing presence for the independent inventor.
It is time for us to band together to defend our rights. Multinational
companies and foreign governments are attempting to weaken our patent system
with a number of bills that in combination will make patents virtually
unenforceable for independent inventors and small businesses.
Steven Shore, President
Alliance for American Innovation
1100 Connecticut Ave. NW, Suite
1200
Washington, DC 20036-4101
Voice (202) 467-5805, Fax (202)
467-5591
E-mail the Alliance in Washington
at: DCConnect@aol.com
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and Licensing Inventions
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