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What is a demand letter? Am I legally obligated to respond?

A demand letter is correspondence that states that you are potentially infringing the claims of a patent and requesting that you pay for a license to use the patented invention. You are not legally required to respond to a demand letter, but in some situations that may be the right course of action. Before deciding, consider your options, described below.

What are my options?

You have several options for responding to a demand letter:

  • You may respond by requesting more specific evidence as to why the patent owner believes you are using patented technology without a license. Note that the sender of the letter is not legally obligated to respond to your request, or to respond adequately, but even a non-response may be valuable in helping you to determine your next steps. If you have a basis for doing so, you may also respond to the letter and deny infringement.
  • You may elect to not respond to the letter or any follow-up letters. Some patent demand letters are sent in the hope that some recipients will be misled or intimidated into paying for licenses even though they do not need to do so. Those who believe that the claims contained in a letter are without merit have in many cases selected not responding to it as their best course of action. Doing nothing carries some risk, however, because if you are later found liable for infringement, the court may determine that you acted recklessly and subject you to up to three times the monetary damages.
  • You may negotiate with the patent owner for a license to use the patent on mutually agreeable terms, or to obtain an agreement that you do not infringe the patent.
  • You may want to explore suing the patent owner for a declaratory judgment stating that you do not infringe the patent claims, or that one or more of the patent claims are invalid.

An attorney can help you decide between these options and how to execute on them.

 

The basis of the demand letter appears to be my use of another’s product. How can that be, and what should I do?

A patent owner has the right to exclude others from making, selling, offering to sell, importing or using a patented invention. Thus, you may be liable for infringement due to your use of someone else’s technology. If the letter states that you are infringing because you are using or selling a certain kind of product or system, and you obtained that product or system from a business such as a software vendor or other supplier, you may write to that vendor or supplier and ask for help. They may, for example, respond to the letter on your behalf, provide legal assistance, or step in to protect you against the patent owner. You remain free to pursue the other options described above as well.

You may also consider changing the way that you use the product. You will have to analyze the patent to determine what steps you can change to avoid the legal dispute. The advice of a patent attorney may be of assistance in making this determination.

If you think the letter is deceptive, predatory, or in bad faith, you may consider filing a complaint with your state attorney general’s office, the state bar where the attorney who signed the demand letter is licensed to practice, or the Federal Trade Commission. You may request that the authorities keep the demand letter in confidence if no action is to be taken.

 

Does receiving a letter from the patent owner mean that I'm being sued, or will be?

Receiving a letter, without more, does not mean that you have been sued. If a lawsuit is filed against you, the patent owner must serve two documents on you: (1) a document called a “complaint,” which explains the accusations made against you; and (2) a document called a “summons.” A “summons” is issued by the clerk of the court, identifies the court in which you have been sued, such as “District of Massachusetts” or “Western District of Virginia”, and contains a “civil action number.” A civil action number, such as 14-cv-12345, combines the year the case was filed with a unique identifying number assigned to the case by the court in which the lawsuit was filed against you. All of the United States District Courts use Form AO 440, which is a standardized summons form. Service is usually made by delivering the documents to you personally, or by delivering the documents to a registered agent for your business. Because of this service requirement, you will usually know when you have been sued.

You should consult a patent attorney if you think that you may have been sued. Please see the section “Do I need an attorney?” for further information.

 

What if the patent is expired?

Even if a patent is expired, the patent owner has six years from the expiration date to file a lawsuit in order to collect monetary damages for past infringement before the expiration date. More information about patent term, and an explanation of how to estimate whether a patent has expired, is available on the Patent Term Calculator webpage. Also, note that the claims of a patent can be invalidated by federal courts and/or the USPTO prior to their expiration, but not afterwards.

 

Has anyone been sued over the patent?

Understanding whether this particular patent or patents have been litigated before can help you determine your next steps. See the “Resources” section of this website for websites that offer to tell you, for free, if the patent has been the subject of a lawsuit. If you find another person with a similar problem, you may consider reaching out to explore ways that you can work together.

 

How can I find out more information about the patent and who is behind the demand?

You can search on the USPTO website or a commercial website for a specific patent number and then download a PDF copy of the patent. The Resources section of this website also lists PTO and other sites that can tell you who is listed as the registered owner of the owner and patent portfolio of the patent holder. You can also check Secretary of State records, your State Bar, the internet, and related sources for information about the entity or attorney sending letters.

 

How can I tell whether the patent is valid?

An invention must meet certain threshold criteria of novelty, usefulness and nonobviousness in order to be patented.  You may challenge the claims in a patent (or patent application) by showing they should not have been granted, or should not be granted, if these criteria are not met.

For example, the USPTO or a court may conclude that a claim in a patent or application is invalid if the claimed invention was disclosed, for example, in a prior patent or patents, a book, a magazine, a newspaper, a television show or movie, a webpage or other published work before the date of the claimed invention. Even if there are no such publications, a court may conclude that a patent claim is not valid if it is shown by other evidence that the claimed invention was offered for sale in this country or was disclosed to the public before the application for patent was filed. In addition, a court could find the patent invalid because it does not meet other statutory requirements, such as a sufficient written description of the invention, or because it does not describe subject matter that is patentable.  Finally, a court could find that the patent is unenforceable because of wrongdoing by the applicant, such as by defrauding the USPTO.

 

How can I challenge a patent or patent application?

If you have reason to believe that the patent is not valid or otherwise enforceable, there are several ways to challenge it:

  • You can challenge it at the USPTO by filing a request for reexamination of the patent, or by filing an inter partes dispute such as a request for post grant review, inter partes review, or, for certain kinds of financial services patents, a covered business method patent review.
  • You can challenge a patent in court, either when defending yourself in a lawsuit brought against you for patent infringement, or by filing a declaratory judgment (DJ) action requesting the court to hold the patent invalid.
  • You can challenge a patent application by submitting what is termed “prior art” (e.g., references, publications, or descriptions of the disclosures described above made prior to the filing date of the application) to the USPTO. This must be done before the patent issues. You can search for prior art on your own or by “crowdsourcing”, that is using an online community to assist with the searching. You can find a patent search “crowdsourcing” websites by performing an internet search. For more information about submitting prior art relevant to a pending patent application (rather than patent), please see our webpage on pre-issuance submissions.

An attorney can help advise you about the various options available to challenge patents and patent applications. Please see the section “Do I need an attorney?” for further information.

 

Do I need an attorney?

In the American legal system, as an individual or a small business owner, you are not required to have an attorney represent you, when negotiating with a patent owner that accuses you of infringement. Moreover, advice and representation by attorneys is expensive, and may not be necessary if you are convinced that the claims in the patent demand letter are without merit.  You may also not need an attorney to perform some straightforward interactions with the sender of the letter, such as requesting greater clarity about the nature of the claimed infringement. However, the assistance of an attorney can be valuable in assisting you with communications with the patent owner and in determining the strengths and weaknesses of the allegations against you. To get information about finding an attorney, please see “How do I find a lawyer?

 

Links Referenced on This Page:

Federal Trade Commission

Glossary of Patent Terms

Inter partes dispute

Patent Attorney database

Patent Ownership / Assignment

Patent Ownership information on the web

Pre-issuance submissions

Reexamination

Resources

State Attorney General's Office

State Resources

The information presented on this site does not constitute legal advice. It should not be considered to replace advice from an attorney. Reference to any specific organizations, attorneys, law firms, corporations, or websites does not constitute endorsement, recommendation, or favoring by the USPTO.

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Last Modified: 07/25/2014 08:30:00 AM