IP litigation

You might be feeling pretty good about yourself because you’ve secured your intellectual property. But the reality is, a patent or trademark is not worth paper it’s written on unless you are prepared to back it with the threat of litigation. There are several tactics to apply – and several common pitfalls to avoid – when protecting your ideas.
Tactics and strategy

Stamp out infringements quickly. Many companies spend a great deal of money and time protecting their IP, but never enforce its misuse. A delayed response can limit a company’s options for recourse. If a company has been using protected IP for a long time, without being told not to, it can infer consent. If it has then relied on this inaction(eg. invested capital on the assumption that its use was proper), the IP owner can be ‘estopped’ (prevented) from enforcing its ownership if that is likely to cause detriment.

The worst thing an IP owner can do is consistently fail to enforce its IP. The longer that an IP owner fails to protect its IP, the more likely it will be that the company will attract a reputation as a ‘soft-target’. Such a reputation will increase the cost of legal fees needed to deter existing and potential infringers. Further, the statute of limitations might be used to limit re course, as might the rules of ‘estoppel’ (see above).

Make sure that you continue to monitor and extend on the adequacy of your protection. For example, you might wish to expand your products into a new industry (eg. from fashion to accessories). This will require a addition to your IP protection. You may ‘tweak’ your logo, in which case you will need to update your trademark. Your invention may evolve, which will require an update of your patent. In short, make sure your legally enforceable rights reflect what it is that you are actually doing.

Pitfalls to avoid

Just because you registered a business name doesn’t mean that you own the trademark. In fact, you could be infringing someone else’s IP. Registering a business name only gives you a right to carry on a business under that name. It doesn’t give you a right to trade under that name if it is owned by another person or entity. To avoid this scenario, conduct a trademark search at the time of registration.

Just because you own a patent or a design doesn’t mean that you are immediately safe to use it. A mechanical invention, for example, might merely be an improvement on other infringeable IP. If you don’t have a right to use the base technology, you might not have a right to use your own IP. This is especially applicable to software (eg. Built using another’s platform technology). You might need to get a license or risk legal action.

Be cautious regarding your distributors. Most distribution arrangements commence with great enthusiasm and optimism. However, regional distributors, in particular, will often register your trademarks, business names, logos, etc. in their territories, generally with the best of intentions. However, this can cause problems down the line, should the relationship fail. Pay thorough attention to distribution agreements with respect to IP.

The last word

Be aggressive, within reason. The most hostile approach is to file and serve. However, a Federal Court case will attract some hefty court and legal fees. Instead, issue an aggressive and direct letter of demand. For example, make it clear that the infringer must cease selling, deliver up all stock, cease advertising, deliver up all advertising materials, change its website or transfer its domain name, deliver up all profits, costs of legal fees and provide a statutory declaration of undertaking that it will never infringe again. Be decisive. If you receive no responsive (or an antagonistic response), follow through. But in most cases, an aggressive letter with heavy demands will generate a very prompt response.

Robynne Sanders is a director at Watermark Trade and PatentAttorneys, specialising in patent applications in the chemical and pharmaceutical area and working on trade mark disputes and commercialisation issues.
r.sanders [at] watermark.com.au