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Intellectual Property Rights: Dealing with Infringements

NIC Document

Summary

Patent infringement refers to the act of trespassing on the rights secured by a patent. This guide introduces the approaches you can take to deal with infringements. It outlines your options for when you discover you are either infringing an idea or that your idea is being infringed.

In brief

  1. Changing your development
  2. Ignorance is bliss
  3. Doing a deal
  4. Litigate
  5. Intellectual property insurance

Introduction

At some point during the development and commercialisation of your product, it is very likely that the subject of infringement will be raised. During the idea generation process and early product development, it is likely that you will investigate the patent situation to find out whether your idea can be protected and whether it is already protected by a competitor. You can use the services of specialist companies that perform patent landscaping to analyse a particular IP space and assess whether there is freedom to operate. It is important to be aware that other types of protected IP can be infringed; see the guide on ‘Protecting Your Idea – Patents, Designs, Copyright and Confidentiality’.

Changing your development

If you discover that you are guilty of infringement, one option is to change your product development process or to change your product. There are a number of factors to take into account before you decide on this route:
  • The cost of changing your development
  • The ease of changing development
  • The likelihood of discovery
  • The likelihood of the infringed party taking action

If the process of change is expensive or difficult, your company must make the decision about whether to alter its product development, do a deal, or ignore the competition and take the risk of choosing not to litigate.

Ignorance is bliss

Some companies will deliberately continue to infringe a product or process because they don’t believe the other party is in a position to take action against them. This can be particularly true when the infringed party is a public sector group or individual inventor without the market knowledge or resources to take action. Another factor may be where the infringing group feels that the IP is weak and that they would be able to find prior art if a legal route were taken.

Doing a deal

In some markets the IP is so fragmented that it would be impossible to produce any products without first doing a deal. This may be in the form of licence agreements, joint ventures, co-development deals or sharing agreements. If the IP is not concerned with the central business of the company, they may be open to an agreement whereby they receive an income for an asset that is not important to them. Similarly, in some markets, different companies may own key patents which are required to develop a new technology. Individually, none of the companies can develop the technology without infringing another company’s patent, so the companies may come to a joint licensing agreement to resolve this.

Litigate

The last option for dealing with infringement is to litigate. This is a very expensive and time consuming process with an uncertain outcome. For more information on the litigation process, you should either speak to your patent attorney or contact the Chartered Institute of Patent Attorneys (CIPA) (http://www.cipa.org.uk) to find an advisor in your local area.

Intellectual property insurance

Many companies purchase specialised insurance policies to protect against unforeseen issues relating to IP. IP insurance coverage protects companies for copyright, trademark, or patent infringement claims arising out of the company's operation. It is fairly typical for the policy to pay for the defence costs and any judgment up to the limits of the cover. The insurers will want to be assured about the strength of your IP portfolio before they agreeing to insure your IP. This will be performed through an independent IP review. IP insurance is very expensive, and a cost of £100,000 per annum for an IP portfolio containing 5-10 patents is not uncommon. However, compared to the cost of a litigation case, IP insurance is cheap. This is a specialised field so it is important to take advice from a relevant insurance advisor.