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Substantial Risk Factors
Initiating an infringement lawsuit carries with it many important risks. Patent owners should be aware that litigating their patents may have significant negative consequences, especially against well-funded opponents that may hire law firms to aggressively defend them.
- Reexamination Proceedings. To delay the court proceedings and to try to invalidate the patents being asserted, some defendants challenge the patents-in-suit through a reexamination proceeding at the Patent and Trademark Office. The nature of reexamination proceedings has changed recently with the America Invents Act and related rules at the PTO. Nonetheless, these proceedings can be expensive and do put at risk the patents and the ability of their owners to enforce them. The Patent Office may narrow or invalidate claims, results that constrain or defeat the infringement litigation.
- Claims May Be Narrowed Or Invalidated. Although the patents-in-suit may not be thrown into reexam, the judge may construe the claims so narrowly that the accused products no longer infringe. Some or all of claims may also be invalidated, again constraining or eliminating the infringement case.
- Little Or No Damages Awarded. There are occasions when the damages awarded (or an agreed upon settlement) do not approach the sums that patent owners had in mind. In some ways, litigation is a crap shoot: the wrong judge on the wrong day with the wrong jury yields the wrong outcome for patent owners.
- The Distraction Factor. The legal proceedings will frequently entail substantial disruption of business as usual, especially for operating companies. Inventors will be interviewed, asked to give depositions, and if there is a trial, are likely to have to testify. Some C-level executives will have to invest their time as well to manage the project and the litigators. Some CEOs and Boards of Directors understandably shy away from infringement proceedings for these reasons.
Risk vs. Rewards
Successful patent assertion is a team effort requiring substantial patience, persistence, and risk tolerance. It is not for the faint of heart. Nonetheless, owners of US patents succeed often enough to make the effort worth the risks, especially with strong patents, reasonably clear infringement, and the right contingency fee litigation firm.