Neglect patents at your peril

One of the simplest ways for a company to suffer huge losses in a single year, or even worse—self-destruct—is to infringe on someone else's patent. Lawsuits for patent infringement are guaranteed to cost a company hundreds of thousands of dollars (even much more to defend) and may cost additional millions if infringement is found to have occurred.

01/01/2006


One of the simplest ways for a company to suffer huge losses in a single year, or even worse—self-destruct—is to infringe on someone else's patent. Lawsuits for patent infringement are guaranteed to cost a company hundreds of thousands of dollars (even much more to defend) and may cost additional millions if infringement is found to have occurred. So before you invest a lot of money in developing a new product or idea, first investigate whether the idea infringes upon someone else's patent.

Risky business

If you consider yourself a risk taker, and you forge ahead with the development of your new idea because you would rather not go through the "hassle" of a patent check, assuming that if you are sued later that you will claim no knowledge of the infringement—think again. This path is not just risky—it is downright reckless.

As in many legal areas, ignorance is no excuse, and the patent infringer is unlikely to receive any lenience. In fact, the infringer's lack of investigation will likely be labeled an intentional infringement in a court and may be punishable with "treble damages," which is lawyer-speak for tripling the patent holder's actual loss.

Options assessment

Does your company need to hire a lawyer to protect it when pursuing new product development? Not necessarily. It is possible to get a flavor of what patents have been issued in a particular area by searching on the U. S. Patent and Trademark Office's Web site at www.uspto.gov . There, you can search for issued U. S. patents and patent applications by key words describing the new product or idea. A slightly more sophisticated search may be performed in specific classifications or sub-classifications for inventions. Performing such a search is relatively easy and free, and it can provide a general idea about whether your invention has already been patented.

Now for the commercial: The surest protection from patent infringement is consulting a patent attorney who can perform a more extensive search, and provide a formal opinion as to whether the new product or idea may infringe upon a competitor's U. S. patent. Such an attorney typically begins this work by forwarding a description of the new product to a professional patent searcher located in the Washington, DC area, near the U.S. Patent Office. The searcher will consult with Patent Office examiners to determine the most fruitful classifications in which the search should be conducted. Further, the searcher will peruse the Patent Office's archived paper records seeking patents that may not be on the Patent Office's Web site.

Upon receiving the search report, the patent attorney will examine the claims of each patent and compare the claims to the new invention. If infringement problems are found, the attorney may counsel the company about how to modify its invention to "design around" the problematic patent to avoid any claims of infringement. If a "design around" is not possible, however, the company has the opportunity to negotiate a license with the patent holder—or abandon the infringing idea before too much money has been invested.

Because reasonable minds may differ as to whether two technologies are similar, a lawyer's opinion does not guarantee infringement will not be claimed at some point in the future. However, an additional advantage of getting a non-infringement opinion is that it is a good way to demonstrate good faith and therefore avoid the worst result—treble damages—if infringement is later found.


Author Information

Mark Voigtmann is a lawyer with Baker & Daniels LLP (Washington, DC, Indiana, and China); Mark.Voigtmann@bakerd.com . His group assists technology companies throughout the world in structuring projects and resolving disputes.




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