warning letters (patent and trademark) · pdf file•warning letter (and any admissions...

Warning Letters (Patent and Trademark)

July 20, 2016

Pete Cuomo, Of Counsel

IP Summer Academy 2016


Boston, Massachusetts

July 11 – 22, 2016


© 2016 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

Overview of Discussion

2

•What is a Warning Letter?

• Sending a Patent Warning Letter

– Declaratory Judgment Jurisdiction

•Receiving a Patent Warning Letter

– Willful Infringement

•Avoiding Warning Letters

•Warning Letters – Trademark

•Key Takeaways

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=XZDSCyMkq-kGVM&tbnid=weob1v2ThJSiOM:&ved=0CAUQjRw&url=http://lawinspiring.com/2012/02/24/uspto-warns-about-solicitations/&ei=dS-5U_qnNbOrsQSqqYC4DA&bvm=bv.70138588,d.cWc&psig=AFQjCNFSxa8VesLM4X3PJ9Euhi91TtgaBA&ust=1404731615896033

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=y4nhm7uPKJm4BM&tbnid=XdaRByeoNbTfzM:&ved=0CAUQjRw&url=http://www.celeritystaffing.com/caution-ridiculous-and-real-product-warnings-ahead/&ei=uy-5U__RMeqgsQT-zID4Aw&bvm=bv.70138588,d.cWc&psig=AFQjCNFl3Z2ijoTfSC2gdkwVE3cwLJ88ww&ust=1404731674125787



July 11 – 22, 2016



3

What is a Warning Letter?

•Communication (written, electronic or oral) sent by IP owner informing

recipient that its activities may infringe the owner’s patent rights.

•May also be referred to as a Cease and desist letter

– a demand or request to halt activity, usually accompanied by the threat of legal

action.



July 11 – 22, 2016



Components of a Warning Letter

4

•Parties involved

– IP owner

– Recipient - suspected infringer

•Legal representation

• IP at issue

– Patent number/specific mark

•Basis of alleged infringement

– Specific acts of recipient (e.g. accused product)

•What IP owner wants

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=_5i9pF_AyvjWBM&tbnid=n1cCqJpdfhJ4sM:&ved=0CAUQjRw&url=http://onellp.com/blog/category/patents/&ei=I5O1U4PuJ4vQsATIsYHwBQ&bvm=bv.70138588,d.cWc&psig=AFQjCNEmbedD6VXnYDoQvdKuGlD35XbmcQ&ust=1404494951601105



July 11 – 22, 2016



Purpose of a Warning Letter

5

Start dialogue with suspected infringer

• Invitation to license; facilitate collaboration

– Business decision: consider economics

•Pre-litigation strategy

– Feel out recipient; gauge response

Halt infringement by threatening lawsuit

•Not likely; may work on small companies

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=crvvc3JvYEOO5M&tbnid=wdSHkuXOle83ZM:&ved=0CAUQjRw&url=http://robliano.wordpress.com/2012/05/22/warning-shot/&ei=YpK1U8aCLsqlsAS16oCACg&bvm=bv.70138588,d.cWc&psig=AFQjCNE8VurRgUJJ4AXYDbrTFaaJlSUVbA&ust=1404494815938450

http://www.google.com/url?sa=i&source=images&cd=&cad=rja&uact=8&docid=6o05QUKSLvS-qM&tbnid=KrGp3yBIz3VtUM&ved=0CAgQjRw&url=http://sweetclipart.com/business-handshake-81&ei=s5K1U4L-M9GisASYMA&psig=AFQjCNGuM3HY4QUdpG9rnRsrQrphEfJkRQ&ust=1404494899892408



July 11 – 22, 2016



Purpose of a Warning Letter

6

Starting point for litigation (and damages)

•Provides Notice to alleged infringer

•A warning letter meets the notice requirement “when the recipient is informed of

the identity of the patent and the activity that is believed to be an infringement,

accompanied by a proposal to abate the infringement, whether by license or

otherwise.” SRI Int’l, Inc. v. Advanced Tech. Labs., Inc., 127 F.3d 1462, 1470 (Fed.

Cir. 1997).

•Start the clock on damages - 35 U.S.C. § 287(a)

– Provisional Rights for published, pending patent

– Requires proof that infringer was notified of infringement

– Allows for damages even where patentee failed to mark its products



July 11 – 22, 2016



7

Sending a Patent Warning Letter



July 11 – 22, 2016



Determine Goals and Position

8

• Importance of the patent to

overall business

•Protection and outcome desired

• Investigate allegedly infringing

entity

– Nature of recipient's business

– Prior relationship with allegedly

infringing entity?

– How important is recipient’s

activities to its overall business?

– How much has already been

invested?



July 11 – 22, 2016



Anticipate the Response

9

•Be certain you can prevail

– Put case together before sending warning letter

– Confirm your rights in the patent

•Patent misuse claim

•Consider and prepare for all scenarios

– Ready for recipient’s response?

– Economic considerations and Market analysis

– Litigation budget



July 11 – 22, 2016



Counsel Should Draft the Warning Letter

10

•Use an attorney with drafting experience

– Set tone depending on strategy

•Warning letter (and any admissions therein) may become part of litigation

pleadings

– Signer may be called as witness

– Recipient - may also become a witness

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=f_eQGudb2AXRsM&tbnid=LU13i7dRVuq6fM:&ved=0CAUQjRw&url=http://www.mdjonline.com/view/full_story/24507305/article-Barnes--Jury-stacked-against-former-Cobb-EMC-CEO&ei=BrG1U4mvFs7IsATZoICADg&psig=AFQjCNGP7wjElSFxxiusRH2PzY84TuVoaA&ust=1404502647387108



July 11 – 22, 2016



Act in Good Faith

11

•Ensure good-faith basis to send warning letter

•Liability for False Statements

– Recipient may bring claims based on false allegations if recipient can show, by

clear and convincing evidence, that the allegations in the letter were

“objectively false” and that the patent owner made those false allegations in

“bad faith” (knowing they were false)

•Liability for Unfair Competition or Tortious Interference with Business Relations claim

– Can send warning letter to third parties other than alleged infringer (infringer’s

customers/vendors), but consult attorney and use extreme caution



July 11 – 22, 2016



Establish Time Frame for Plan of Action

12

• If recipient does not respond right away, don’t wait to file suit

•Avoid laches defense

– Unreasonable delay after IP owner knew or should have known of infringing

activity = no infringement damages prior to lawsuit

– No suit within 6 years = rebuttable presumption of laches

•Avoid equitable estoppel defense

– IP owner sends warning letter, recipient responds, patent owner fails to reply, and

accused infringer continues activities

– If equitable estoppel established, lawsuit barred

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=85Q25yerl810FM&tbnid=5gRdeD-I8JF1ZM:&ved=0CAUQjRw&url=http://funny-pictures.picphotos.net/happy-new-year-2014-fb-cover/fashionzpk.com*funny*wp-content*uploads*2013*10*2014-Happy-New-Year-Photos-New-Year-Funny-Picture-2014-5.jpg/&ei=pjW5U-DdNOqgsQT-zID4Aw&bvm=bv.70138588,d.cWc&psig=AFQjCNEzuByR7i0YjqkVF91D9WVtpXFijg&ust=1404733108869790



July 11 – 22, 2016



KEY CONSIDERATION – Sending Warning Letter

13

DECLARATORY JUDGMENT JURISDICTION

•Declaratory Judgment Act, 28 U.S.C. §§2201-2202: federal courts may declare the

rights and legal relations of parties where an “actual controversy” exists

•DJ jurisdiction gives warning letter recipient standing to file suit to have the patent

declared invalid, not infringed, and/or unenforceable

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=3zrWs7qplpUktM&tbnid=_8I-K9ZOcQVnoM:&ved=0CAUQjRw&url=http://uellibraryscot.blogspot.com/&ei=SFK5U6_2FOvgsASb14G4Ag&bvm=bv.70138588,d.cWc&psig=AFQjCNEA2_c_9uzO4F_0pPpIO2-esRRwPg&ust=1404740542028029



July 11 – 22, 2016



KEY CONSIDERATION – Sending Warning Letter

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•MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007)

– Changed the standard for subject matter jurisdiction

•Avocent Huntsville Corp. v. Aten International Co., Ltd., 552 F.3d 1324, 1334 (Fed. Cir. 2008).

– Personal jurisdiction based on patentee’s activities in enforcing its patent (or forum of

general jurisdiction)

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=drxzMBsccTtuqM&tbnid=-4ehL2KXWvBjzM:&ved=0CAUQjRw&url=http://www.cityofhewitt.com/index.aspx?NID%3D357&ei=_1S5U-j3H8_IsATDgIKYDA&bvm=bv.70138588,d.cWc&psig=AFQjCNFwTJmpIk2aPJ2Y65jW2zotqpW5Cw&ust=1404741231230042



July 11 – 22, 2016



MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007)

15

•Discarded “reasonable apprehension of suit” test

•Now Totality of the Circumstances analysis

– Whether the facts alleged, under all the circumstances, show that there is a

substantial controversy, between parties having adverse legal interests, of

sufficient immediacy and reality to warrant the issuance of a declaratory

judgment

– Most patent infringement warning letters will create DJ jurisdiction

•Ways to potentially avoid DJ jurisdiction

– No analysis/infringement determination, bland letter merely requesting

information

– Do not offer to license the patent

•Consider whether warning letter is necessary



July 11 – 22, 2016



16

Receiving a Patent Warning Letter



July 11 – 22, 2016



Act Quickly

17

•Respond in some fashion within time requested

– Timing – damages clock running if continue acts alleged

– Timely response sets good tone for negotiations

•Perform First-Level Search, Review and Analysis

– Look up patents and related patents

– Review file histories and ownership

•Does your accused product have all of the elements?

– Review accused product against claims in light of file history

– Make initial determination of infringement

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=4dHtAWbXKy5AKM&tbnid=1Vf1fFFmsmTCKM:&ved=0CAUQjRw&url=http://detective-zaporozhye.com/en/detective-work&ei=JUG5U4XyN6HIsASX4oGIBg&bvm=bv.70138588,d.cWc&psig=AFQjCNFr7nk20aMJxKRfA0_if_peza-AQQ&ust=1404736095132960



July 11 – 22, 2016



Determine Strategy & Respond

18

Evaluate with in-house counsel

• Is sender a patent troll or a competitor?

• If complex, contact outside counsel (for in-

depth analysis

– If weak/lacking, give it due attention and

respond

Responses

•Reply letter requesting additional information

– Ask sender to identify all patents and IP at

issue

– Ask sender for basis of alleged infringement;

asserted claims

•Clarify reasons why you don’t infringe

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=x5h2zJV1uHedVM&tbnid=jqvjmPp0V-vBrM:&ved=&url=http://www.to39.rosreestr.ru/kadastr/about_fgu/newskp/4.html&ei=RFi5U-bUA83jsATI5YKwCg&bvm=bv.70138588,d.cWc&psig=AFQjCNHkKU-eehtCJ_7rXeDfn77mr0e7Wg&ust=1404742084263238



July 11 – 22, 2016



Determine Strategy & Respond

19

Provide a substantive response drafted by counsel

• If you have strong arguments, fight it

– Seek DJ action against asserted patent(s)

• In any event, take action to avoid willful infringement

– On notice but do nothing, may lead to treble damages and attorneys’ fees

Design around

•Depends on the complexity and breadth of the technology

•Offer for royalty or to cross-license

– What do you have in your own patent portfolio?

Cease production (last resort)

•Expensive, disruptive



July 11 – 22, 2016



Willful Infringement - Old Seagate standard

20

OLD STANDARD

•“Objective recklessness” standard with a 2-pronged test:

– 1) “infringer acted despite an objectively high likelihood that its actions constituted

infringement of a valid patent.”

– 2) “If this threshold objective standard is satisfied, the patentee must also demonstrate that

this objectively-defined risk . . . was either known or so obvious that it should have been

known to the accused infringer.”

•Must have been proven by clear and convincing evidence

•State of mind of the accused infringer is irrelevant



July 11 – 22, 2016



Halo Electronics v. Pulse Electronics and Stryker Corp. v. Zimmer

Supreme Court of the United States (2016)

21

•Supreme Court rejected 2-part test from In re Seagate

•“Subjective willfulness of a patent infringer, intentional or knowing, may warrant

enhanced damages, without regard to whether his infringement was objectively

reckless.”

•District Courts now have “the discretion to award enhanced damages against

those guilty of patent infringement.”

– no “precise rule or formula”; but

– Supreme Court indicated it should be for “egregious cases of misconduct

beyond typical infringement.”

•Burden of proof lowered from clear and convincing to preponderance of the

evidence (i.e., more likely than not)



July 11 – 22, 2016



Avoiding Willful Infringement

22

•Opinions of counsel may help defeat willful infringement claims

•District courts will have a more fact-intensive inquiry weighing willfulness under new

standard



July 11 – 22, 2016



23

Avoiding Warning Letters



July 11 – 22, 2016



Maintain your IP and Monitor Field

24

•Obtain opinion for new products to ascertain if others have patent coverage that

might be an impediment to the making, using or selling of your company’s

products

•Search closest competitors

•Develop patent libraries

•Keep good records

•Problem? Consider design change (consult counsel)

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=qnRx0S7VM5TH5M&tbnid=TDGtJtauF3khwM:&ved=0CAUQjRw&url=http://www.epi-global.com/en/tdpa-patents-and-trademarks.php&ei=gFO5U8L7G-atsQSYp4HQDw&bvm=bv.70138588,d.cWc&psig=AFQjCNEu6mtXvNcD03nDDj247rV7ousLgQ&ust=1404740848427701



July 11 – 22, 2016



25

Warning Letters - Trademark



July 11 – 22, 2016



Different from Patent Infringement Warning Letters

26

•Cease and desist letters mean what they say - IP owner wants recipient to

immediately stop use of their IP

•Can be more aggressive

– Potentially less at stake: less time and money spent developing TM than patent

•Conversely, the trademark might be far more valuable

•May work better

– Different types of companies using trademarks; smaller companies



July 11 – 22, 2016



Similar to Patent Infringement Warning Letters

27

When you receive a cease and desist letter, follow the same steps:

• Investigate and evaluate claims

– Search federal and state trademark databases

• Involve U.S. counsel at the outset if U.S. based companies or registrations involved

• If U.S. based subsidiary is allegedly infringing party, review insurance coverage to

determine if notification required (to avoid waiving coverage)

•Weigh pros and cons of declaratory judgment action

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=4dHtAWbXKy5AKM&tbnid=1Vf1fFFmsmTCKM:&ved=0CAUQjRw&url=http://detective-zaporozhye.com/en/detective-work&ei=JUG5U4XyN6HIsASX4oGIBg&bvm=bv.70138588,d.cWc&psig=AFQjCNFr7nk20aMJxKRfA0_if_peza-AQQ&ust=1404736095132960



July 11 – 22, 2016



Potential Resolutions

28

• Similar to resolutions for patent warning letters

•Discontinue infringing use

•Negotiate license and continue use of IP

– Fee for prior use and future use

– Negotiate other terms like any other license (territory, term, approvals, ownership, etc.)

•Possible litigation

– Injunctions

– Damages

– Relief from declaratory judgment (defendant)

http://www.google.com/url?sa=i&source=images&cd=&cad=rja&uact=8&docid=6o05QUKSLvS-qM&tbnid=KrGp3yBIz3VtUM&ved=0CAgQjRw&url=http://sweetclipart.com/business-handshake-81&ei=s5K1U4L-M9GisASYMA&psig=AFQjCNGuM3HY4QUdpG9rnRsrQrphEfJkRQ&ust=1404494899892408



July 11 – 22, 2016



Avoiding Cease & Desist Letters

29

•Preliminary search for proposed trademarks, service marks and domain names in

jurisdictions that matter to the business

– uspto.gov or third-party site

•When creating materials that feature photos, graphics or images, purchase such

works

•Avoid comparative advertising unless you consult with counsel first

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=JVMCjZgcpwoZyM&tbnid=RYlAtY12bXTkPM:&ved=0CAUQjRw&url=http://blog.legalsolutions.thomsonreuters.com/law-and-techology/managing-trademarks-in-online-search/&ei=x0u5U7fcDLa1sASr9YH4AQ&bvm=bv.70138588,d.cWc&psig=AFQjCNGcCc2U-bj8MAybDTd79fNukXUXQg&ust=1404738647722216



July 11 – 22, 2016



30

Key Takeaways



July 11 – 22, 2016



Key Takeaways

31

•Warning letters are valuable tools but come with some risks

– Must have legal strategy for all scenarios

– Warning letters not always prudent

•Don’t ignore or delay response to warning letters, tackle head on

•First contact with alleged infringer is important – can set tone for resolution or litigation


Thank you!

Email: [email protected]

32

warning letters (patent and trademark) · pdf file•warning letter (and any admissions...

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