Patent infringement
into commercial
opportunity
Christine Jackson (partner) and Laura Steel (solicitor) of Wright Hassall’s commercial team
discuss how to turn intellectual property infringement to your advantage
turned to the advantage of both parties.
A patent is a valuable commercial asset,
and licensing is one way to exploit it
without resorting to litigation.
How the infringer responds to a
cease-and-desist letter will depend
on its business strategy, financial
considerations, its attitude to litigation,
how aggressively you want to enforce your
patent portfolio, and whether the infringer
recognises the potential commercial
advantages inherent in actively entering
into a commercial relationship with you.
From your own perspective, before
deciding whether or not to negotiate
a licensing agreement, you need to
consider whether your own investment in,
and manufacture and distribution of, your
locking mechanism will generate more
profit in the long term than a licensing
arrangement.
A NEW OPPORTUNITY
By agreeing a licence, you are
authorising the infringer to manufacture
your locking mechanism in return for
licensing (or royalty) fees, thus turning
the infringer into a licensee, and the
original infringement into a commercial
opportunity. There are several benefits
that will accrue from taking this route:
● You retain ownership of the intellectual
property rights in your locking mechanism
which you can exploit for future gain
● You gain access to new markets via
the licensee
● You gain additional brand exposure and
promotion, provided that your brand/trade
You have invested large sums
of money in R&D and have
successfully patented a new
locking mechanism in the UK.
One of your salespeople discovers that a
competitor of yours has copied your design
and is actively marketing it, albeit in a
different geographical area, despite the
fact that only you have the right to exploit
the patent.
‘Flagrant infringement: straight to
court, do not pass go’ might be your
first reaction. This is a clear case of
patent infringement, and you could write
a strongly-worded letter to the infringer
demanding that it withdraw the product
from the market immediately. Firing off a
letter may produce the result you want:
the competitor may cease its activities,
sufficiently alarmed by their consequences.
On the other hand, if it chooses to
ignore your demands, you may find yourself
drawn into litigation in order to protect your
investment and market position. Patent
litigation can be a time-consuming, costly
exercise and should not be embarked upon
lightly or without professional advice. There
is an inherent financial risk in taking a case
to court: the infringer may launch a counterclaim
challenging the legal integrity of
your patent, or the court may find against
you, with all of the associated costs that
implies.
CONVERTING THE POACHER
INTO A GAMEKEEPER
But pause for a moment. Rather than
demanding that the infringer desists, you
might consider exploring how the patent
for your locking mechanism could be
Laura Steel Christine Jackson
24 www.ied.org.uk
/www.ied.org.uk