By Kevin Wagner and Theodore Budd
Most businesses go about their day-to-day routine without too much focus on intellectual property issues. But then one day an accusation of patent infringement arrives.
This accusation could be in the form of a formal complaint filed in Federal District Court, an aggressive cease and desist letter, or a more “friendly” notice letter identifying a patent that may be relevant to the company’s business and is available for licensing. Once a communication of this sort arrives, concerns about potential patent infringement are no longer a back-burner issue.
This article will provide a road map for companies facing these circumstances for the first time (or for the first time in a long time), outlining the steps that should be taken in the first days and weeks after receiving an accusation of patent infringement to maximize odds of success going forward.
1. Know your deadline for responding
If you have been formally served with a summons and a complaint, then your default deadline under the Federal Rules of Civil Procedure is 21 days to file an answer or otherwise respond with a motion filed in Federal Court. Those 21 days pass quickly, so you will want to take action right away. Often as a courtesy, the plaintiff will agree to extend this initial deadline by a few weeks, but that is not guaranteed, so don’t count on it.
If you have not been formally served, you have more time. One tactic plaintiffs sometimes use is to file a complaint with the Court, but not serve it right away. In this scenario, the plaintiff will ordinarily send a copy of the filed complaint together with a cover letter asking to engage in settlement discussions. Federal Rules provide a plaintiff 90 days after filing a complaint to accomplish service. Often, plaintiffs use this time to attempt to engage in settlement discussions before either party needs to invest substantial resources in actual litigation. At the end of this 90-day window, if no agreement has been reached, the plaintiff will either need to dismiss the case, formally serve the complaint, or move the Court for an extension of the service deadline.
If the accusation of infringement comes in the form of a letter, whether an aggressive cease and desist letter or the more friendly kind, this probably means the patent holder wants to talk before filing a lawsuit. These letters often include a self-imposed deadline for a response, but that deadline is almost always a soft one. If you write back to say you are reviewing the letter and will respond after completing your analysis, the patent holder will likely sit tight for longer than initially indicated. But you cannot delay forever, and you’ll have to decide what to do next, so keep reading.
2. Implement a legal hold
Once a company reasonably anticipates litigation, it has a duty to preserve all potentially relevant information for discovery. Failing to do so can have big consequences on the case. The most egregious violations occur when someone actively destroys documents to shield them from discovery. But in today’s world of electronic documents, email, and automatic deletion policies, violations can occur unless immediate action is taken.