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Key Considerations When Sending a Patent Cease and Desist Letter
Practical Law Legal Update 2-553-9065 (Approx. 5 pages)
Key Considerations When Sending a Patent Cease and Desist Letter
by Practical Law Intellectual Property & Technology
| Published on 04 Feb 2014 • USA (National/Federal) |
Patent infringement cease and desist letters can serve a useful purpose in certain situations. However, if the cease and desist letter is not appropriately drafted or the expected outcome from sending the letter is not realistic, the patent owner's patent enforcement strategy may be compromised. This Legal Update identifies key issues that counsel should consider when drafting and sending a patent infringement cease and desist letter.
Patent infringement cease and desist letters may be used as part of a patent owner's enforcement strategy. However, if the letter is not drafted correctly or is used in the wrong situation, the letter may not work for its intended purpose.
Most companies that engage in any research and development activity, or otherwise have an intellectual property portfolio, may occasionally find that a third party is infringing one or more of its patent claims. In these situations, a carefully drafted patent notice letter (also called a cease and desist or C&D letter) can be sent by the patent owner to the alleged infringer. Cease and desist letters should be drafted or reviewed by a patent attorney because of the patent issues such a letter raises. For example, this type of letter can:
- Provide actual notice of the patent infringement claim (see Patent Notice).
- Potentially provide the alleged infringer the grounds for filing a declaratory judgment action (see Declaratory Judgment Actions).
For more information about patent law and infringement, see Practice Notes, Patent: Overview and Patent Infringement Claims and Defenses.
Patent infringement claims are highly fact-specific, so patent infringement notice letters must be tailored to fit the particular facts and circumstances of each case.
Patent Notice
A patent notice letter can provide the patent owner with certain benefits. For example, a patent notice letter may:
- Satisfy the requirements of 35 U.S.C. § 287(a) by providing the recipient of the letter with actual notice of its infringing activity where the patent owner has not marked the patented product with the relevant patent number. This could be important because:
- any damages award is generally calculated from the date that the alleged infringer received actual notice of the relevant patent and product accused of infringement; and
- if the patent owner has not marked the patented product, damages would otherwise be calculated from the date it files a patent infringement suit.
For more information on patent marking, see Practice Notes, Patent: Overview: Marking and Leahy-Smith America Invents Act: Overview: Patent Marking. - Provide evidentiary support for a:
- finding of willfulness and enhanced damages if the alleged infringer ignores the letter; and
- claim of induced or contributory infringement, which requires knowledge of the patent (see Practice Note, Patent Infringement Claims and Defenses: Types of Infringement).
- Resolve the dispute without litigation.
Declaratory Judgment Actions
Although there are potential benefits to the patent owner from sending a patent notice letter, there is the risk that the letter may provoke the recipient into bringing a declaratory judgment action against the sender in an inconvenient or unfavorable forum. Therefore, counsel should assess the risk of creating declaratory judgment jurisdiction before sending the letter.
Declaratory judgment jurisdiction exists if the facts show that there is a substantial controversy between the parties having adverse legal interests of sufficient immediacy and reality to warrant a declaratory judgment (see MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 128 (2007)). There essentially is declaratory judgment jurisdiction when all of the circumstances show that there is a controversy between the parties (see Micron Tech., Inc. v. Mosaid Techs., Inc., 518 F.3d 897, 901 (Fed. Cir. 2008)).
For example, the US Court of Appeals for the Federal Circuit determined that the alleged infringer established declaratory judgment jurisdiction where the patent owner:
- Initiated licensing negotiations with the alleged infringer, met with the alleged infringer and set out its infringement position even though the patent owner communicated that it would not sue the alleged infringer (see SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372 (Fed. Cir. 2007)).
- Was a non-practicing entity that only received benefits from its patents by enforcement and sent the alleged infringer multiple letters identifying relevant patents, imposing short deadlines for response and insisting that the alleged infringer not file suit (see Hewlett-Packard Co. v. Acceleron LLC, 587 F.3d 1358 (Fed. Cir. 2009)).
When evaluating the risk that the alleged infringer will attempt to file a declaratory judgment action in response to the notice letter, counsel should consider whether:
- The court where the alleged infringer would likely try to bring a declaratory judgment action has personal jurisdiction over the patent owner. In patent declaratory judgment actions, personal jurisdiction over the patent owner typically does not exist where the patent owner merely sent cease and desist letters to the alleged infringer in the relevant forum (see Avocent Huntsville Corp. v. Aten Int'l Co., 552 F.3d 1324, 1340 (Fed. Cir. 2008) and Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1360-61 (Fed. Cir. 1998)).
- The alleged infringer is likely to forego either inter partes or post-grant review of the patent by filing a declaratory judgment action before filing a petition to institute one of these US Patent and Trademark Office proceedings (35 U.S.C. §§ 315(a)(1) and 325(a)(1)). For more information on inter partes and post-grant review, see Practice Note, Leahy-Smith America Invents Act: Overview.
To minimize the risk of engaging in patent litigation in an inconvenient forum, counsel should consider whether it is better to file, but possibly not serve, a complaint in a favorable forum before sending the letter.
Before sending a patent notice letter, counsel should also decide whether sending the letter is the most appropriate course of action. For example, counsel may decide that sending a cease and desist letter is not appropriate in any of the following circumstances:
- The patent owner's case is not viable.
- There is a substantial risk of a declaratory judgment action being filed by the recipient in an inconvenient or undesired forum.
- The patent owner desires to gain an advantage by immediately bringing an infringement action without notice to the alleged infringer.