Demand Letter: You Infringe! Stop Making or Selling! You Need A License!

A business seeking to enforce the intellectual property under its ownership (or control) might send a suspected infringer a letter giving notice of the intellectual property (“IP”) asset (e.g., patent, trademark, copyright) that is allegedly being used without authorization.  The letter will often invite a response or make various demands.  The quality of these demand letters varies with the training, professionalism, and reputation of the sender.  

Demand Letter

These demand letters may miss the mark, but under United States patent law you could still be found to have knowledge of the identified IP which could later prove detrimental.  It is a good practice to actively address each and every demand letter.

You should also consider whether it is necessary to establish a litigation hold.   In general, it is wise to involve an independent intellectual property attorney (especially a registered patent attorney, if it concerns patent rights) early in the process, because general in-house counsel may not be up to speed on current intellectual property issues and going to your litigation counsel too early may unnecessarily escalate the matter and drive expenses.  Of course, your in-house team should be a first resource for cost-effectively, and efficiently, addressing the demand letters, but the flow and documentation of information (i.e., evidence) must be controlled.  Preferably, an attorney should be involved in this process to fully benefit from the attorney-client privilege, as well as, to smartly document and preserve the defensive strategy without opening yourself up to discovery in a later filed litigation or worse, yet, creating bad evidence and proving up the other side’s position.

Having trained with a large New York City law firm dedicated exclusively to IP law and served as in-house patent counsel for international corporations, as well as, in-house licensing counsel for non-practicing entities defending and enforcing IP rights, Mr. Fox is intimately familiar in developing winning strategies with constrained resources.  Fox Law’s Lean Total Quality IP Practice can seamlessly integrate with your existing team to successfully resolve intellectual property demands while controlling costs.

In the meantime, here are things that your in-house team can undertake to reduce third-party expense:

  1. Determine Expiration of the IP
  2. Confirm Payment of Maintenance Fees
  3. Check Assignment/Ownership Records of the IP
  4. Conduct Internet Search for Mention of Purported Owner
    1. If Public, Obtain & Review Relevant SEC Filings
  5. Conduct Internet Search for Mention of the IP
  6. Conduct Search of Court Records for Litigation Involving the IP

Be wise in documenting your efforts.  If you need help, Fox Law provides IP counseling and litigation services under a variety of fee arrangements.  Contact Fox Law.

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Matthew Fox