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Patent Conflicts: Considerations Before Going to Market

Your company will be bringing a new product to market. To protect your investment, you decide to supplement your branding, marketing and distribution agreements with a patent to cover the innovative aspects of your product. Patents can be useful in limiting copycat products, but contrary to widespread belief, a patent does not give you license to make and sell your innovation.

Your product, even if covered by your patents, can still infringe patents held by others. That is because a patent allows the holder to stop others from making, using, selling, offering for sale and importing the patented subject matter. You can stop them from using your patented innovations, and they can stop you from making their patented features.

Knowing this, how do improvements ever reach the market? An illustrative hypothetical could be useful here. Fermi Motors develops and patents a vehicle, claiming wheels, a gasoline engine and a bucket seat. You want to get in on this newfangled autocar fad, and determine that a vehicle would be more controllable with an airplane joystick replacing its steering wheel, which you patent.

The market responds that Fermi’s vehicle with your joystick is the best combination. Now you and Fermi both have a problem: Fermi cannot make the combination because you have patented the joystick, and you cannot make the combination because Fermi has patented the underlying vehicle. To meet market demand, you have options for addressing the conflict.

  • Design Around: If it will still meet market needs, you can design your own vehicle to not infringe Fermi’s patent by replacing the gasoline engine with a steam engine or replacing the bucket seat with a bench seat. You are generally entitled to use what is in the public domain – subject matter in expired patents or subject matter that was never patented.
  • License: You might be able to obtain a license to Fermi’s patent that allows you to make the combination vehicle by paying Fermi a royalty on each vehicle sold.
  • Cross-License: Alternatively, you can obtain a license to Fermi’s patent by offering Fermi a license to your patent. Both parties can then make the combination vehicle and compete in the market.
  • Purchase: You can purchase the Fermi patent or the Fermi company, thereby eliminating the threat of infringement.
  • Patience: Circumstances might warrant not entering the vehicle market before Fermi’s patent expires; an expired patent cannot be infringed.

As you might expect, there are subtleties to each of these approaches, including finding relevant competitor patents in the first place. At FTI, in addition to patenting the innovative features of our products, we also perform a clearance study to identify potential roadblocks to them. This can be a legally complicated analysis and should be performed by an intellectual property (IP) attorney. Greater complexity can mean greater cost, but it is still far less than the seven-figure cost of a typical infringement lawsuit. To increase confidence and reduce costs, clearance studies can be performed on a preliminary basis early in the product cycle to identify potential IP roadblocks during the design phase rather than once the product is ready for market.

Research into potential market entry barriers should be part of any new product or process effort, with any conflicts addressed using the steps outlined above. The appropriate response to a given situation should be highly fact-specific and is best determined by a coordinated legal, technical and business effort.

Even in today’s speed-to-market environment, it is worthwhile to consult your IP attorney when evaluating a new product to commercialize. Your attorney can help ensure your innovative idea has both clearance and protection before it hits the street.