Leveraging Your Patented Invention

By Craig Rogers, Attorney, Marger Johnson & McCollom

In the last article in this series, we discussed the final stages of working with the U.S. Patent and Trademark Office when a patent is allowed. Rather than representing the finish line, your patent issuance is really just a passing of the baton from one stage to another in a relay race. To truly reap the benefits of your patent--and effectively rival your competition--you must go the distance and leverage your patent assets.

Holding an issued patent presents new responsibilities and opportunities depending on how you are planning to use the patented technology.

• Using the technology yourself. If you intend to use the technology yourself, there is a series of administrative requirements you must follow. Although they may seem like busywork, they can have a far-reaching impact on your ability to stake your claim, both now and in the future. This phase includes important notifications to your competitors and the marketplace, as described in this article.

• Enforcing your patent through licensing and litigation. Never overlook the opportunity to generate company revenues through licensing and the need to vigilantly protect the invention you’ve worked so hard to patent. At the time your patent issues, an important decision should be made as to whether you will secure the most value by sharing your technology with others--for the right price--or keeping it to yourself. Licensing the technology to others for a reasonable amount can add value to your bottom line while discouraging competitors from designing-around your technology, or worse, attempting to invalidate your newly acquired patent in court. Unfortunately, when you run up against someone who does not respect your patent rights, you may need to litigate to enforce your rights. We will discuss the complex issues surrounding active enforcement in the next article in this series.

As soon as your patent is issued, you should initiate two processes: marking and direct notification.

Marking
What: Imprint your patent number on your commercial products incorporating the patented invention. In the software world, this can be a little tricky, but can be done by placing the patent number on the software packaging, on the end-user license agreement and in a window appearing during software installation or loading.

Why: You must begin marking your covered products with the patent number to be eligible to collect damages in the future against any company infringing on your patented software without actual notice of your patent. Otherwise, you will be able to collect damages only from the date the alleged infringers received notice of infringement.

Direct Notification
What: Although not required, it is often desirable to alert competitors and companies using your technology that you now have patent protection and thus exclusive rights to reap the revenue rewards of this particular invention.

Why: Notification through general advertising and direct letters helps to stake your claim and make others aware that they need to negotiate with you before using your patented technology.

There are three primary venues for direct notification: news releases, advertisements and letters to competitors. For example, when a patent issues, consider distributing a news release informing the relevant industry segments of your newly granted rights. Also, post the news release prominently on your Web site. When placing advertisements about the patented technology, ensure that the official patent number is included.

Letters to competitors can serve a variety of functions. If competitors want to use your technology, communication can encourage licensing discussion and lead to potential revenues. It can also discourage competitors from introducing an unlicensed competing product. Notification letters should be carefully worded, however, to avoid the risk of being brought to court in an unfavorable location through what is called a “declaratory judgment action.” Therefore, always involve your attorney in preparing and sending your notifications.

There are three basic approaches or tones your attorney can take in your notification letters, depending on your competitive stance.

• Soft approach. In its mildest form, a notification letter will simply inform your competitor that you have received a patent relating to a particular technology and invite them to contact you if they are interested in licensing.

• Medium approach. Under a more direct approach, notification might inform your competitor that you have received a patent relating to a specific technology, identify their potentially affected products and ask them to contact you to discuss licensing opportunities.

• Heavy approach. Under the most direct approach, the notification would inform your competitor of your patent, identify their affected products as “infringing,” and demand that they immediately stop making and selling those products. Before you send such a letter, you must be certain that their product truly infringes on your patented technology and should therefore obtain an opinion letter from your patent counsel. This approach may also expose you to the declaratory judgment action mentioned earlier and should be used only after careful consultation with your attorney.

Through effective notification efforts, you can help ensure that others recognize and respect your rights as a patent holder. In the next article, we will walk through the basics of various patent-enforcement strategies, including licensing agreements and negotiations, as well infringement suits.

About the Author
Craig Rogers is an attorney with Marger Johnson & McCollom, an intellectual-property law firm headquartered in Portland. He specializes in helping technology companies to effectively leverage their patents. You can contact him at 503-222-3613 or craigrogers@techlaw.com