This article is part of the “What Should I Do (WSID)?” series where I discuss various scenarios involving intellectual property and business. Topic suggestions are always welcome.
“I came across a patent that is similar to the product I’m developing — What should I do?”
I sometimes hang out on Quora.com and read the questions regarding IP. While I don’t typically answer rhetorical questions (e.g., “Would the world be a better place if the patent system didn’t exist” or similar), I do enjoy reading and posting answers to the more practical questions. One question posted recently had to do with what to do if you find a patent that is similar to the innovation you are developing into a product. I did post an answer to this question and decided a more expanded post would be warranted to consider various ramifications of this question. So here we go.
A word of caution right up front: Do NOT shoot off an email to your attorney saying, “OMG, I think my product infringes this patent I just found.” The key word in this week’s WSID question is “similar.” There are so many factors to consider before you can make a statement like that.
Like the graphic says, keep calm. Let’s analyze the IP situation and rationally think about your options.
Here are the Top 3 Categories of Questions you should consider, if you find yourself in this situation. I’ll follow up the questions with 3 Potential Actions you might take, depending on your answers to the questions.
QUESTION CATEGORY 1: THE PATENT
- Who owns the patent? Has the ownership ever been transferred? (For US patents, you might be able to get information on the Patent Assignments On The Web search.
- If the patent is owned by a company, is the company still in existence? Does the company manufacture products related to the patent?
- Does the patent have any related patents or pending patent applications?
- What is it about the patent that you think is similar to your product? The drawings? The description? The claims?
QUESTION CATEGORY 2: THE INDUSTRY
- Is your product industry known to be litigious? Is there a history of companies in the industry suing each other, especially over patent infringement?
- Are there known examples of patent licenses (one-way or cross-licensing) in your industry?
- Is there an industry standards organization or a patent pool in which the major players in the industry participate? Is this patent part of such a patent pool?
QUESTION CATEGORY 3: THE PRODUCT
- Exactly what about your product is similar to the invention described in the patent? Is it the product as a whole or just a part of the product, or is it the method of using your product?
- Would it be possible to modify your product to differ from the patent and still be commercially viable?
- Is your product simple or complex? Does your product require IP from other sources? Do you have IP licenses for aspects of your product?
- How large is your market? If your product is a commercial success, how large will be your anticipated market share? How much profit would that market share generate for you? Does the owner of the patent also operate in this same market?
- Who will be your customer? Why will they want to buy your product rather than competing products?
Depending on how you answered the three categories of questions above, here are 3 Potential Actions you can take as your next step.
ACTION 1: SEEK LEGAL HELP
Engaging the services of a patent professional, you can do one or more of the following:
- Analyze the strength of the patent. The patent professional will help you dig into the file history and, possibly, litigation history of the patent. Here, you’ll want to pay particular attention to how the patent claims had been interpreted by the USPTO, the prosecuting attorney, and the courts. You might even be able to discuss the validity of the patent and get an infringement analysis. An experienced patent agent, patent prosecution attorney, patent litigation attorney, or IP consultant can do this for you.
- Get a legal opinion. This action can only be done by a patent attorney, although he/she may enlist the help of a patent agent or IP technologist for the background work. The legal opinion would involve the identification of one or more claims in the patent that may be most relevant to your product, then a detailed analysis of whether or not your product falls within the scope of the identified claim. Note: Such a legal opinion can get very expensive unless you minimize the number of claims analyzed, so the final document may only provide you with limited protection and perhaps only from claims of willful infringement. Willful infringement is an evolving area of case law, so do your cost-benefit analysis carefully.
- Approach the patent owner for a license. Without giving away your rights, you would open a discussion with the patent owner regarding a license to the patent. While you can take this action without legal assistance, the process would likely go much more smoothly if you do engage legal help, especially if you are not a seasoned negotiator with experience in patent transactions. The viewpoint of an experienced IP consultant and/or patent transaction attorney would be advantageous for you.
- Approach the patent owner for a collaboration. Similar to #3 above, you would be opening a discussion with the patent owner, this time with an offer to work together on a future product. This action would require that: 1) you have adequately protected your own product idea; 2) the patent owner is able to provide value to you in a product development collaboration; and 3) you can provide value to the patent owner in terms of product development knowledge in the product area.
ACTION 2: CONTINUE WITH YOUR PRODUCT DEVELOPMENT
If you are in an industry where the product rev cycle is on the order of weeks (or even days) than years, then you might make the conscious choice to go ahead with your product development plan anyway. You may decide to modify the product in a way you think would avoid the patent you had found. Alternatively, you may decide to stay on your product development path and see what happens.
Especially if the patent you’d found is older and your product is based on a more recent technology like SaaS or API integration to a newer service, then the Lean Startup approach with emphasis on execution might better serve your business. Rather than spending time and resources on legal wrangling like above, your efforts to out-perform and out-pace your competitors may result in a better product — plus, with the rapid development approach, your final product may not even look remotely similar to what you are contemplating now anyway.
Just make sure the decision to plow forward with your product development is a conscious choice made after considering the pros and cons. An experienced IP strategist would be able to help you with your decision making process.
ACTION 3: GO FIND ANOTHER PRODUCT IDEA
Maybe the situation is that bad. Maybe the patent was filed by a close and powerful competitor who has been working in the field much longer than you have. Maybe your innovation is not so innovative after all. Maybe you reviewed the patent with your IP counsel, and he/she told you that the patent is likely valid and your product likely infringes. Oops.
Think of this scenario as a potentially bad situation avoided. You may have a hard time raising funding if there’s an IP infringement question and you may not be able protect your competitive edge because of close prior art. No matter how commercially successful your product could have been in the market, patent infringement law suits are expensive and better avoided, if possible. Consider this an opportunity to evolve your ideas to a new and more innovative level.
Note that, in the above, I did not consider the philosophical question of whether or not you should have been reading other people’s patents in the first place while developing your own product. When I was in charge of IP asset management at companies, one of the most difficult aspects of my job was dealing with the patent and non-patent references to which my inventors had access. While I know researchers and engineers need to keep up with the latest literature, they also were obligated by Duty of Disclosure to let me know if they came across any references that may be relevant to their pending patent applications. I’d briefly discussed Duty of Disclosure in a previous post.
Additionally, I also did not address whether or not you should do a patent search before launching into product development or patent filing. There are different schools of thought on this topic as well (to start, read this Gene Quinn article or this Carr & Ferrell article). Your specific situation would come into play here, and this question is probably worth its own future post.
May your product development path be integrated with your IP strategy to lead to business success.
About the Author and Disclaimer: Yoriko Morita has worked with innovators in a variety of contexts, in a law firm working for inventors, as in-house IP director, and as a licensing professional. She currently helps clients with such IP-related questions, as well as developing integrated business/technology/patent strategies, through her company, Patents Integrated. The contents of this article are intended to be informational only, not legal advice. The reading of this article does not establish an agent-client privilege between you and Patents Integrated, and Patents Integrated is not responsible for any damages arising from your use of the information in this article under any circumstance. Your use of the information in this article is at your own risk, and you should seek the advice of a licensed legal professional regarding your own specific situation.
