Journal of Intellectual Property Law & Practice Advance Access originally published online on May 7, 2008
Journal of Intellectual Property Law & Practice 2008 3(7):442-450; doi:10.1093/jiplp/jpn077
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© The Authors (2008). Published by Oxford University Press. All rights reserved
Practice Point |
Patent trolls (and other bad news) lurking in your mailbox: handling cease-and-desist letters in the USA
Legal context: Many patent holders attempt to reap a benefit from their patents by identifying potential infringers and offering them a license. Negotiations often begin with the potential infringer receiving from the patent holder a letter that informs the recipient of the sender's patent rights and may even threaten legal action.
Key points: In the USA, the receipt of such a letter can cause much trouble, but recipients who do not handle the situation with care can multiply their troubles. Numerous issues must be carefully considered. For example, should the recipient respond to the letter? Should the recipient obtain a written patent opinion? Should the recipient preemptively file suit against the sender? Unfortunately, there are no ‘right’ answers that fit every circumstance, but the recipient can make the best of a potentially bad situation by being informed and responding wisely.
Practical significance: The receipt of a letter alleging patent infringement should not be taken lightly, whether the sender is an industry competitor or a so-called patent troll. Every business with a US presence should be prepared to address, in a timely and knowledgeable manner, the practical and legal issues raised by such letters. The failure to do so can be a costly lapse and may severely jeopardize the recipient's defense of the infringement allegations.
Key Words: Many patent holders, including those often called patent trolls, exploit their patents primarily by sending letters to a number of potential infringers and then collecting licence fees from recipients hoping to avoid litigation. • The recipient of a cease-and-desist or notice letter must quickly and knowledgeably address a number of issues raised by the letter, including whether the recipient should obtain a written patent opinion and whether the letter triggers the recipient's duty to preserve all evidence potentially relevant to the alleged infringement. • This article seeks to inform the reader of critical issues that should be addressed upon receipt of a cease-and-desist or notice letter, and it provides a legal background through which the issues should be assessed.
* Messrs Taylor, Swift, and Duff are patent attorneys practising IP law at Ice Miller LLP, Indianapolis, Indiana. Mr Prescott is a patent attorney recently retired from Ice Miller LLP. The views expressed herein are those of the authors and do not necessarily reflect the views of Ice Miller LLP or its clients. Email: Gregory.Duff{at}icemiller.com