Marco H. Santamaria
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Patent laws provide legal protection for the exclusive use of patented products and services by their inventors and innovators, but enforcing patent protection against infringement is often extremely expensive. Many patent holders accept out-of-court settlements rather than take infringement cases to court. However, there are budget-friendly options for patent holders to pursue a patent infringement case without cutting corners.
Enforcing a Patent
Enforcing a patent requires a patent holder to determine whether patent infringement has occurred. For instance, Company A holds a patent for a lamp that turns on and off by pressing a button. Company B later manufactures and begins selling a lamp that looks nearly identical to Company A’s lamp, except that its lamp has an on and off knob. Once Company A has determined that its patent has been infringed, the next step is to file a lawsuit against Company B in federal court.
A court would likely find that Company B has infringed on Company A’s patent, either because both lamps perform essentially the same function (lighting a room) or that both lamps’ on and off switch are substantially similar and therefore fall under the doctrine of equivalents. The court may then issue an injunction against Company B to stop making its lamp and may order it to pay damages to Company A. The lawsuit may also be settled before a court issues an order. A settlement may include drawing up an agreement between Company A and B that awards royalties to Company A in exchange for allowing Company B to continue to manufacture its lamp.
Cost Considerations for Patent Enforcement
Along with legal representation, pursuing patent enforcement involves various fees, many of which the plaintiff must pay upfront. Many of these fees, such as filing fees, deposition costs, attorney travel expenses, and pretrial motions, occur during the early stages of litigation and represent a significant expense.
In addition to these upfront costs, litigation often requires an extensive discovery process and the use of expert witnesses. Hourly fees during the discovery process can invoke sticker shock, especially for experts with extensive industry backgrounds or experience with court testimony. Most district courts also require plaintiffs to retain a local attorney who is admitted in its court for appearances on a plaintiff’s behalf in addition to the lead counsel. Those hourly fees can add up quickly.
Budget-Friendly Patent Enforcement Solutions
Strength in Numbers. Patent holders who maintain license agreements with patent licensees or who manufacture a patented product for specialty buyers may be able to convince third parties to share litigation costs. For example, a patent holder and licensee may agree to share costs where the infringer is a direct competitor for both and where defending against the infringement protects the profits of both the patent holder and the licensee.
Combined Counsel. Paying both lead and local counsel may dramatically inflate litigation costs. Patent holders may reduce fees by hiring counsel with firm grasp of litigation who may also act as local counsel.
In-Budget Billable Rates. Billable rates for patent litigation are generally among the highest in the legal field. It is important for inventors to compare the billable rates for attorneys to determine what law firm brings the most value for the money invested in litigation.
Pro Bono. Law firms may take on a patent litigation matter at no charge for the patent holder under a pro bono agreement. However, this arrangement is rare in the legal field and generally reserved for high-profile or important legal issues that have an impact on patent law interpretation.