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The Secret to Navigating Complex IP Disputes

Robust intellectual property enforcement can be part of a good IP strategy, though most businesses want to navigate IP issues without a full-blown dispute.

Intellectual property disputes can be costly, and not just financially. They can swallow up time at the highest levels and impact opportunities.  

Plus, they’re complex – involving different rules for different types of IP and the rules vary between countries.  

The good news is the IP system is well set-up to avoid disputes and patent attorneys are hard-wired to take precautions.

But if a dispute can’t be avoided the next best thing is a solid strategy based on good info about your business, the IP at stake, and your options for sorting things out.

Let’s take a look at some common issues that crop up in IP disputes to paint a picture of their complexity and show how to avoid them.

Navigating joint ownership disputes

One of the biggest headaches in IP disputes revolves around ownership rights. And joint ownership disputes can be particularly thorny.

Say you invent something and then collaborate with someone else to take the product to market. The other person suggests an improvement. Who owns the invention behind the improved product? What rights or limitations does joint ownership give?

While the answers to these questions may be different for different markets, typically both parties own the improved invention. Although, in some places, each owner can make the product but not licence it. In others, either owner can licence the improved product without needing the others’ consent.

Without even considering the details of the invention and improvement, this dispute can be tricky and the stakes can be high.  

When looking after a technology licence on behalf of a university a patent attorney at the multi-national licensee threw up a saying they used: “A jointly owned patent is worth a dollar because the other owner will licence it for a dollar less than you.” Unfortunately, this can be a pitfall to technology development through collaboration.

Secure agreements, dodge disputes

Luckily, this type of dispute is easily avoided with an agreement, made before collaboration begins.

A simple version can stop either or both parties commercialising IP until a formal agreement is made.

Another simple agreement you can make is that you own all IP, even in the output of a collaboration.

Although, even a simple agreement needs to ensure that each type of relevant IP right is properly covered.

In practice, you can avoid this type of dispute by picking up the phone to a patent attorney when considering any dealings that might involve intellectual property. The agreement can be turned around relatively quickly (usually a few days) and might become a valuable template for future collaborations by your business.

How to avoid accidental IP infringement

Accidental infringement can be another issue businesses face when it comes to IP.

Often, a business will develop its own invention, trademark or design and expect that means they have the right to commercialise it. They may not realise it could infringe someone else’s IP rights, or that IP rights can mean monopoly rights (E.g. exclusive to a patent owner) that can be enforced to stop someone else selling that invention even though they may have developed it independently.

And even though a business may have traded smoothly in one market, they may run into a dispute when moving to another market.

A trademark, for example, may have been developed by the business, be owned and registered by the business in their home market, used without any issues for some time but would infringe trademarks registered in another market.

How does the business resolve this dispute? Are they liable to damages or a product recall? Is a rebranding exercise needed after launch into the new market?

It’s complex. But here’s the good news…

This dispute can be easily avoided by carrying out a trademark search in advance. A clearance search would flag any trademarks that might cause trouble in specific markets. It can also tell you whether you can register your trademark there.

If a search does discover issues, you have a wider range of options to avoid a dispute. These could range from rebranding before the launch, adjusting the trademark or negotiating with the owner of the conflicting trademark to find a way to co-exist.

The cost of the search is a small fraction of what you could end up spending – in money and time- in a legal dispute. And it doesn’t take long – generally around two weeks.

Get strategic to protect your turf            

Sometimes a threat of dispute can be part of an IP strategy.

Here’s a common scenario: You’ve got a successful product, maybe even cornering a foreign market. But then competitors start popping up with their own versions.

If you’ve been proactive and registered your intellectual property, you’ve got options. You could go the litigation route against those competitors. Even if their product is a bit different, having a solid patent in your pocket can still put them at risk of infringing.

Here is where the cost, time and complexity of an IP dispute can work to your advantage. The cost and complexity of taking infringement may be high and going after them might seem like a lot of time and money, but the situation is worse for the infringer. You get to decide when and how to enforce that patent, while they wonder if they’re about to get dragged into litigation.

The possibility of being dragged into a complex and costly dispute represents a significant risk if the competing company were to lose.

They might be ordered to pay damages, give over their profits, recall products and more. If the competitor is likely to defend litigation, they will still need to set aside resources to defend a complex and costly dispute and the court orders that might follow – it’s a risk on their balance sheet.

Even if the legal team is OK with the risk, the CFO probably isn’t, and sometimes simply getting the issue in front of the CFO resolves the matter.

Competitor as customer

With a good IP position, you might just be able to turn your competitor into your customer. This is more common than you might think. Your competitor may be able to seek clarification from courts or challenge the intellectual property rights, but often the best risk mitigation is a licence agreement with the owner of the IP rights.

Often the best use of the competitor’s resources is to give your product more space and focus on other products.  

Long story short: having your IP registered can give you a leg up in any potential disputes.

What if you can’t avoid an IP dispute?

When it comes to dealing with an intellectual property dispute, there’s no one-size-fits-all solution. But here’s a breakdown of steps that will help you manage most types of dispute:

1. Proactive IP management

Start by setting up agreements, conducting searches and registering your intellectual property rights ahead of time. This proactive approach can nip most disputes in the bud before they even begin.

2. Assess business activities

Take a close look at what your business is doing and how it relates to specific IP rights owned by others. Or take a look at your competitor’s activities if it is your IP rights that would be enforced in a dispute.  Whether it’s branding, product designs, or technologies, identifying activities that are relevant IP is crucial.

3. Identify existing IP

Next, identify and evaluate any existing IP rights that might come into play. This could involve reviewing your own portfolio or researching potential rights held by others.

4. Assess infringement

Determine whether your business activities might infringe on someone else’s IP rights, or vice versa.

5. Check IP status

Check the current status and enforceability of relevant IP rights. Keep in mind that patents and trademarks can lapse or be challenged.

6. Stress test IP rights

Assess whether the relevant rights are vulnerable to revocation or opposition. Rights that aren’t actively used or are based on weak claims might be at risk. A search for earlier inventions or brands will help get a picture of how robust the rights are. In one famous case the ‘alleged infringer’ was able to show that , if the scope of a patent was broad enough to cover their activities, it was broad enough to cover prior art and be invalid.

7. Evaluate risk

Consider the potential risks for both parties involved in the dispute.

Keep a broad perspective here. You’ll need a patent attorney’s take on whether you’re stepping on someone’s toes with your product, but let’s start simple. Imagine there’s a flip of a coin chance you might be infringing on someone else’s idea when you sell your product in a new place.

Think about what that could mean: cost of litigation (that you can’t pick the timing for), product recall and possibly giving up the money you made. On the flip side, if you win, you keep your earnings, minus the litigation costs and a lot of your time. Is it worth it? What if you knew you had a 75% chance to win? Would that change your game plan, really?

Then chat with your CFO. Tell them to set aside enough money for litigation, plus profits in case they need to be handed over. If they ask how long this could go on, tell them you don’t know because it’s the IP owner that gets to decide.

While this is a back-of-the-envelope answer, you get the point. Get a picture of the risks and what an IP dispute would involve.

8. Develop a strategy

Identify your options for taking action and develop a clear strategy for resolving the dispute. This should involve timelines, milestones and estimating costs. Most important is a clear picture of any the point-of-no-return. When are you committed to litigation?

9. Implementation

Put your strategy into action, probably starting with engaging with the other party to resolve the dispute. This could include sending a cease-and-desist letter or negotiating a settlement.

Moral of the story?

Taking proactive steps and approaching disputes strategically can help avoid almost all intellectual property conflicts. While disputes can be complex, having a solid understanding of your business activities and the relevant IP rights is key.


Leonard Cousins

Patent & Trade Mark Attorney

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