If you have patents covering your products (and these days, you probably have a bunch), you know how important it is to protect them to maintain your competitive position.
Thus, if you hear through the grapevine that a competitor is poised to come out with a product that might infringe on one of your patents, or even worse, that your customers have already started buying his product, your gut instinct might be to quickly fire off a letter or a phone call threatening him with a ruinous lawsuit.
Though your eagerness to put a halt to his activity is understandable, sending such a letter or making such a call could be a big mistake if you haven't taken a number of crucial strategic steps first.
Your first step should be to thoroughly discuss this situation with your patent counsel. One reason for this is that many of the competitors of New England high tech companies are in California, which means that as soon as the offending party gets wind that your are planning to sue for patent infringement, he will likely first sue you in his home district to gain a tactical advantage. His suit will request a declaratory judgment that your patents are invalid or not infringed on or both.
Although you could then respond by filing a suit, it's the federal courts that hear all patent cases and they have historically followed a general policy of allowing only the first suit filed to go forward. Thus, even if you file your own infringement suit as early as the day after your competitor filed his suit, your action will be stayed because his was the first filed. The few narrow exceptions to this rule cannot be counted on.
You may be thinking that you do not want to go to all the trouble and expense of having a lawyer draft and file a lawsuit if the competitor is just going to withdraw his product as soon as he is notified of a patent conflict. Such total surrender, however, is difficult to predict, and even if initially it appears your offender has no obvious defense, he may file his own suit simply to gain time to investigate your infringement allegations or the validity of your patent.
He may also file an action in an attempt to win leverage in any negotiations for licensing of patent rights. The bottom line is that in most cases it is worth the investment to file a preemptive complaint.
Here's another compelling reason to contact your patent lawyer first: Patent lawsuits are expensive. Before charging infringement, which would bring on a lawsuit, a thorough investigation must be conducted to ascertain that the competitor's product or method actually infringes your patent.
After a detailed inspection of the product, you may find, for example, that it does not meet one or more limitations required by your patent. Thus a case too hastily brought not only saddles you with substantial and unnecessary expenses but in certain situations a court may order you to pay your competitor's legal costs as well.
This pre-suit investigation can usually be done quickly and easily if the offending product can be obtained in the marketplace. Where the product is not available, however, or when the patent is drawn not to a product but to a chemical process or to a method of manufacturing, and the information available to you is thus incomplete or needs verification, you must take special care to obtain as much reliable information as possible.
When you do talk to your patent counselor, be prepared to supply whatever information he or she might need. Such information would normally include any available details about the structure of the competitor's product, dates and places where it has been marketed, location of the competitor's offices, and a history of any communications, direct or indirect, between your company and the competitor that might be relevant to this brewing dispute. You will want to ask your counsel for an opinion on the strength of your allegations, where and when to file an action, and whether your counsel feels you should file an action.
Patent infringement is a serious offense, but responding to it may be tricky. Emotionally, you may feel entitled to blast away at your competitor for the wrong he has done you but this may end up as a mistake in judgment. Call your patent counselor and carefully review all your options. The result of such an action will more likely be a favorable outcome for you.