Your FTO analysis shows there is a high probability that you are infringing a third party patent: What do you do?

By Eviatar Aron, US and Israel Patent Attorney

 

In my previous article, I discussed what an FTO analysis is and how it can be used to assist you in avoiding infringing someone else’s intellectual property rights. This time, I will discuss what happens when that FTO analysis shows that there may actually be infringement. 

The first step is for you, the potential infringer, to perform a thorough analysis of the claims and prosecution history of the patent or patents that the FTO has shown that you ought to be worried about. To do this, you should always seek assistance from a patent attorney who is familiar with such analyses. The analysis should include making a determination of the scope of the claims not only as they are written, but also taking into account any limitations to that scope arising from amendments to the claims, or explanatory statements made by the applicant during examination of the patent application. Limitation to the scope of the claims originating from explanations given by the applicant during examination is known in the US as “file wrapper estoppel.”

Once your patent attorney has helped you determine how the claims may be interpreted in  Court, you will then be in a position to evaluate the extent to which your activities may or may not be covered by the claims. This should give you a clear picture as to what specific activities that you or your company are undertaking that may be perceived as infringing.

So now you have a clear picture. If you continue with your activities, you may be accused in a court of law of willful infringement. If you stop your activities, then you will be throwing away your investment in the technology and products that your company has developed. 

So what are your options?

There are several avenues that can be explored when faced with potential infringement: 

First, identify the Patent Owner. Is the patent owned by an individual? Has the patent been licensed to a third party? Is it owned by a large corporation? Does the corporation have a history of acting against infringers? 

After finding out more about the Patent Owner, here are some of the things that you can do:

 

Negotiate a License 

A patent license is an agreement given by the owner of a patent to a third party that can benefit from using or selling the patent protected product or method. In a license, the owner of the patent receives some form of compensation from the third party for using the patented technology. There are many different types of licenses that can be agreed upon, which is beyond the scope of this post. In many cases this approach is the least costly and can create a beneficial business relationship that can yield a long-lasting cooperation between the patent owner and the third party.

On the assumption that a license can be negotiated, then you, as a business owner, will need to decide whether you can afford the financial cost of the license.

Cross-license

As a variation on the above, you may be able to negotiate a cross-licensing deal. This is a situation in which the patent owner may benefit from using your allegedly infringing invention. This would normally be relevant when you, the alleged infringer, have one or more patents.  An obvious benefit from such an arrangement, is that the cost of negotiating a license would be significantly reduced. Essentially, even without planning to monetize your own patent(s), that is exactly what you would be doing.

Purchase the Patent

We have discussed finding out information about the patent owner. This includes whether or not he or she has been pursuing the technological or commercial field to which their patent is relevant. If they have not been doing this, then the easiest way of handling the matter may be to try and purchase the patent. Once you are the owner, then any alleged infringement problem will simply go away.

Design Around

Designing around a patent that you may be infringing means reworking your technology or product so as to fall outside the scope of the broadest claim in the problematic patent, e.g. by omitting at least one major component in that claim. Depending on the type of design around that may be required, this approach may be cheaper or more expensive than trying to get a license. Also depending on the design around, it may also provide a better solution than you had before!

Patent Revocation

A further alternative is that of patent revocation. Different procedures exist in different countries for doing this.  In all procedures, however, in order to proceed along this path, valid grounds must exist for doing so. These can include lack of novelty or inventive step (obviousness) at the time the patent application was filed, or a dispute over inventorship or ownership. This can, however, be expensive, and as with all adjudicated processes, you cannot be certain of the outcome. Therefore, this path of action should be reserved for a situation in which other avenues have been exhausted. 

 

The Final Word

None of the above-outlined possibilities is without cost or without risk. However, one of the attributes of a successful business owner is to try and identify problems in advance, and to deal with them – head on – in the best possible way.

Disclaimer: This article is of a general nature only and does not constitute legal advice. If you identify a potential FTO problem, DON’T leave it to fester, DO seek legal help from professionals qualified to assist you, and DO take steps necessary to avoid infringement. 

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