This article is written by Patent Consultant Maria Laini
It is textbook knowledge that patents are meant to be used to stop others from copying your invention, so the first question that would come to mind is: should I sue?
A very attorney-like answer is, of course, that it depends, although every consideration of infringement action should be threaded very carefully, since costs and risks can quickly escalate, and typically not at the sole expense of the alleged infringer.
With software patents, the path to infringement proceedings can be particularly insidious and risky, since software is, in most cases, enclosed in a black box, whose specifics are often covered by a website with a contact form to book a demo.
In this article, I will look into the main considerations which a software patentee should make, before taking any action. I will then illustrate some lower risk and cost-effective alternatives to infringement proceedings, which can be pursued instead.
Building the infringement case: the dos and don’ts
When we suspect that somebody has copied our product and is profiting from our ideas, the desire to take them to court can be intense. We think about a court room, with a judge and technical experts, and our competitor sitting in front of them with the fear of an imminent injunction that will stop all their sales and marketing activities.
All of this can be tempting – and if we think we have a strong case, it can also be tempting to refuse any compromise.
However, infringement cases are complex, and there are many steps that need to be taken before even being able to request a court hearing. Most cases do not even get to court and are settled before then, partly because of the risks and high costs attached to infringement proceedings.
One of the main issues with building a patent infringement case is that a patentee must, if we are talking about Europe, or should, if we are talking about the US, have very good reasons to trigger infringement proceedings.
Let us go back to the typical scenario already introduced: a competitor with a website advertising an allegedly new and clever software program, with no specific technical documentation in sight, and code in the form of an inaccessible black box. How do we know that they are infringing?
We may suspect it, since they may operate in our same area, claim to solve the same problem solved by our patent, and they may even use some catchy key words which refer to the core inventive concept described in our claims. Is this enough to build a case?
The extent of evidence needed to win the Courts’ time depends on the jurisdiction. A general rule of thumb is that in the US it is easier to trigger court proceedings with little evidence than in at least some European courts, where the patentee must present more concrete evidence. However, it is never wise to avoid some good and thorough preliminary investigation before taking any formal litigation step.
Thus, it is advisable to seek the assistance of a patent attorney to review the competitor. Amongst the things to look at are their current patent portfolio and any active patents or applications in the field. It can also be helpful, if possible, to look at their key inventors and engineers and whether there are any relevant publications in the field. This does not necessarily prove that infringement occurred, but it can be a good starting point to understand whether you are on the right track.
Another very important consideration is the geography of your competitor’s market. Do they operate in the country where you got a patent? This can be challenging to figure out with software companies, since they usually target clients on a global scale and may have servers in different countries and operating across borders, but their website and (when applicable) their patent portfolio can give you some hints on where they operate, and whether you have a case at all.
Even by doing all the above, it is very unlikely that you will have a 100% certainty that infringement has occurred. This is not just because ultimately it is the Court that decides, but also because realistically it would be very difficult for you to access the source code, and thus the ultimate proof needed to claim infringement. What happens then in practice?
For example, if you are reasonably convinced that infringement has occurred against your European patent (with unitary effect), you need to refer to the Unitary Patent Court. When starting infringement proceedings before the UPC, it would not be necessary to have all the technical details of the allegedly infringing product at hand, so you do not need 100% certainty.
It is however necessary to have a strong enough case to convince the judge that there is a concrete risk of infringement worth investigating. If this happens, the UPC court has the authority to force the alleged infringer to provide information relevant to the case. For example, a UPC judge can order a detailed description of the allegedly infringing software, including technical documentation, source code or the like (1). Preservation of digital evidence can also be ordered, so that the alleged infringer cannot delete material that could be relevant to the case (3).
An eye for an eye: the risks of invalidity attacks
The other important aspect which a patentee has to consider, is that infringement claims can (and usually do) attract counter claims of patent invalidity. This means that the alleged infringer accused has the possibility of attacking the patent and try to get it revoked.
Furthermore, by starting infringement procedures, you will make your name and your intentions known to your competitor. This means that they can also consider making more contentious moves against you and your IP portfolio. For example, they may start opposing other patents you own in Europe and/or submitting observations against your pending applications, in an attempt to prevent you from getting more patents. In other words, you may be put on your competitor’s watch list, and this could be something you don’t want.
It goes without saying that, even if your competitor fails to get your patent revoked, this will attract further costs for your business, because your attorney (and I would warmly recommend getting one before this point!) will then need to review the attacks and come up with a defence plan.
Even if none of the above happens, these considerations must be part of the cost-benefit analysis of your IP portfolio, especially when considering taking legal action.
Alternatives to infringement proceedings: surveillance and observations
Infringement can be costly and risky, so it is a weapon that must be used very wisely. Now that you know this, you may wonder what the point of getting the patent in the first place was. There are many reasons why you should not regret it, and one of those reasons is that patents and applications can still be very useful to manage your competitors, in ways that are less risky and cheaper than litigation.
Firstly, your patent portfolio creates prior art for your competitors which should prevent them from getting patents for your same inventions or for trivial modifications of these. With this in mind, an approach is to put your competitor under “surveillance”, to monitor their future filings and verify whether your existing portfolio makes their new applications unpatentable.
For example, you may spot an application from your competitor which is essentially rendered obsolete by an earlier application that you filed. Once a relevant application is flagged, this can be contested through different legal means. For example, if it is a European patent application, it is possible to file anonymous third-party observations, to convince the examiner that the patent should not be granted. In the US there is something similar, although within stricter time limits. If what has been flagged is a European patent granted less than nine months prior, it is also possible to start opposition proceedings.
Even if you do not flag any relevant application, you can still use the outcomes of surveillance to get an understanding of where your competitor’s research is heading and whether this can conflict with your future R&D plans. This is all extremely important for a tech startup, which needs to know where they are stand before being able to present their products to their customers.
Conclusions
Whilst a granted patent can be used to attack alleged infringers, the attached risks and costs can be excessive. However, your patent portfolio can still be used to understand and monitor your competitors, so that you can be always one step ahead.
Bibliographic data
(1) Art. 59 UPCA - https://www.epo.org/en/legal/up-upc/2022/upca_59.html
(2) Art. 60 UPCA - https://www.epo.org/en/legal/up-upc/2022/upca_60.html
(3) Rules of Procedure (RoP) of the Unified Patent Court, Rules 190-192
