U.S. Federal District Courts can only hear actual “cases or controversies,” meaning that there must be a real dispute before a lawsuit can move forward. If you are infringing my patent and I don’t claim that you are infringing, there is no case or controversy, and you can’t run to federal court to get a declaration of non-infringement. As I point out in the accompanying Innovation Cafe video, when it comes to patents and trademarks, sending letters or making public accusations of infringement can unintentionally create such a dispute—potentially dragging you into litigation. Below, we break down how to avoid that pitfall and what inventors or brand owners need to keep in mind.
1. Understanding “Case or Controversy”
- It’s a Constitutional Requirement
Article III of the U.S. Constitution requires that federal courts may only preside over real, active disputes. Simply having a patent or trademark doesn’t create a “case” on its own. The minute you accuse somebody of infringing, you can create a case or controversy. - Triggering Litigation
If you send a letter to a company implying or claiming that they infringe your patent, you’ve create the case or controversy the company needs to run to federal court seeking a declaratory judgment. This allows them to ask the court to rule on validity or non-infringement. If you don’t have a small fortune ready to wire to a law firm, you are quite likely to lose the case.
2. Patent and Trademark Risks
- Patents
Patent holders may be eager to let others know they have strong IP rights. However, vague or aggressive “cease and desist” letters can provoke the accused party to sue you first. - Trademarks
Similar issues apply if you claim a third party is diluting or infringing your mark. Unclear or threatening notifications can push them to seek a ruling from the court. - Venue
Where the suit is filed can really matter. Some federal districts are backed up and can take years. Others have a “rocket docket”. Some have judges with great familiarity with patent cases, while others have judges with a reputation for invalidating patents. If you give the infringer a basis to sue you first, they get to choose where to sue (subject to the regular rules about where a suit can be brought).
3. Why Copyrights Are Different
- Harder to Invalidate
Copyright protection generally arises automatically when you fix the work in a tangible medium, and there is less risk of invalidity than with patents or trademarks (but watch for this to change — as generative AI takes a greater role in helping authors and other creators, you should expect copyright validity to become a much more important issue). - Lower Likelihood of Case or Controversy
While copyright infringement suits do happen, it’s less common for an accused infringer to proactively seek a declaratory judgment that the copyright is invalid. Copyright owners seldom face the same concerns about “invalidity” as patent or trademark holders.
4. Strategies for Avoiding Unwanted Litigation
- Careful Communication
- Instead of accusing someone of infringement outright, send a polite inquiry or use licensing discussions that don’t directly threaten legal action. We have some intellectual property that might fit well into your intellectual property portfolio” is far a problem than “We have patents and you’re infringing them.” Remember that unlike federal courts, the USPTO can review and invalidate a patent without any case or controversy (that’s an IPR). IPR costs are petty cash for big companies, at around $500,000 per side. For a human being, however, that’s usually something they cannot afford to defend.
- Hire lawyers to help draft language that avoids provoking (or even permitting) a lawsuit.
- Conduct a Thorough Analysis
- Ensure you have strong grounds for infringement claims before contacting the suspected party. Weaker allegations are more likely to trigger a defensive lawsuit. That said, talk to a lawyer before you do anything. Some companies have reputations for challenging any patent, regardless of merits. Others have reputations for settling even weak claims. Know your audience.
- Know How You Want it to End
- Are you interested in licensing? Do you want to partner with a company? Do you want to keep competitors out? Your strategy has to match your goal.
5. Balancing Rights Against Risks
- Enforce or Collaborate?
Enforcing IP rights can be desirable if done right. Overly aggressive or poorly considered tactics can backfire, landing you in federal court. - Potential Consequences
A federal judge could invalidate your patent or trademark in a declaratory judgment action. Keeping disputes out of court might help you retain stronger bargaining positions. It certainly will help you keep some money in the bank. - Fraud, Anti-Trust and State “Non-Practicing Entity” laws:
Claiming patent infringement without a good faith basis to believe in it raises all kinds of liability. Make sure to get a patent litigator to sign off on anything you plan to send.
Want More Details?
Watch the accompanying Innovation Cafe video to hear Gary Shuster’s quick insights on how making or avoiding certain accusations can determine whether you end up in a U.S. District Court.
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