An intellectual property enforcement strategy is essential for many businesses. However, IP registration and enforcement can be complex and expensive. As such, many small- and medium-sized businesses do not enforce IP. However, despite the challenges of IP enforcement, the number of IP infringement lawsuits has more than doubled since 1990. In this article, we will look at the reasons why corporations are enforcing IP to benefit their business.
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When does IP litigation benefit a business?
When protecting IP rights, a company must consider what it wants to achieve through litigation. In many cases, it will seek compensatory damages to offset litigation costs or recoup lost revenue; it may also want to deter competitors with time and cost expenses. Depending on the scale of the infringement, compensation can be lucrative. The potential costs to the party that does not own the patent/trademark may lead them to settle rather than endure the expense of a trial, even if they have a strong case.
Additionally, litigation costs have declined significantly in recent years, according to a report by the American Intellectual Property Law Association. For example, in cases with below $1 million at stake, the median cost fell by 27 percent between 2015 and 2017. In this way, it is more advantageous for businesses to enforce IP, since the risk is usually worth the reward.
Enforcing IP Internationally
A company may enforce IP internationally to expand their business into specific regions or maintain a foothold in certain markets; this hinders competitors from entering the market. However, enforcing IP in multiple regions requires in-depth knowledge of different regional-specific rights, application standards, enforcement procedures, and the impact of other legal influences.
In these cases, a company should consult with IP experts in multi-jurisdictional litigation to ensure the effective assertion of ownership over an IP asset in different regions, so it can tackle potential locale-specific enforcement issues. A business that foresees international expansion should also consider this when budgeting for potential IP services.
For international litigation, there are many considerations when deciding on the venue, such as the location of the IP registration, favorability of local laws, ease of access to legal resources, local norms and procedures, and the potential extent of a favorable or unfavorable outcome. In a recent case, a suit was brought against Sony, a Japan-based technology company, by WiLAN, a Canadian patent licensing firm, it chose to pursue the case in China, which has been a preferred litigation location for many companies in recent years. The main goal when selecting a litigation venue is to achieve a favorable outcome for your business while ensuring the maximum amount of damage to your competitor.
How else can a business enforce IP?
There are many reasons to litigate IP enforcement. However, there are other potential options through alternative dispute resolution (ADR), i.e., without litigation. ADR solutions seek to resolve conflicts in a cost-effective manner that suits both parties. Depending on the adversity between the conflicting parties, they may choose to deal directly with each other (negotiation), negotiate through an intermediary (mediation) or present the case to a neutral third party who decides the outcome (arbitration). A case resolved through ADR remains private, since it does not take place in a court.
Depending on the conflict, two parties may choose to settle a dispute through mediation or arbitration. Mediation is an informal, confidential, and cost-effective as it usually only involves a neutral, experienced third party who mediates the negotiation of two conflicting parties. The resolution is usually amicable; however, litigation or arbitration is still possible, if the outcome is not satisfactory. Arbitration is more formal, where the case is presented to a neutral third party or parties (arbitrators) and they will decide the outcome. In comparison with mediation, the outcome of an arbitration is more difficult to appeal.
There are many ways in which IP enforcement can benefit a business strategy. However, before a company decides to enforce IP, it is crucial to determine the best method to achieve their desired outcome. Whilst litigation can be viewed as a profitable route to follow for a patent holder, many businesses find it advantageous to pursue ADR, since it can be speedier, more cost effective, and the proceedings remain private. If you need advice about enforcing IP or developing an IP strategy, contact our IP experts and we can advise you on the best course of action for your business.