United States: Effective Management of U.S. Patent Litigation

Patent litigation in the U.S. has always been a very difficult type of litigation. Not only are the underlying facts generally more complex compared to other types of litigation, but the application of those facts to U.S. Patent Law typically does not allow certainty as to the probable outcome of the litigation. Most patents that are litigated involve "cutting edge" technology for which even the terminology is not yet firmly established or even understood. Further, U.S. patent law is filled with legal tests like "one of ordinary skill in the art" or "clear and convincing evidence" or .case-by-case determination,. all of which can be ultimately decided in any of a number of ways depending on the underlying facts available and on the respective skill and expertise of the advocates. The business context in which the patent is being litigated adds to the overall complexity of the entire situation. Some product or company is frequently .at risk. of being shut down in the litigation.

Despite the well-founded reasons for why U.S. patent litigation is uncertain and expensive, clients still want certainty. They want to know what the probability of success might be, how much it is going to cost, and they want the dispute settled satisfactorily.

Because of the inherent uncertainty and general unpleasantness with the U.S. litigation process, many clients delegate most of or the entire process to outside U.S. counsel. It is sometimes easier for a client to just keep as much of the process out of mind rather than to deal with the onslaught of the entire process.

However, there is a better way. The better way is to remain involved with the process and to be continually updated on the developments. Managing a litigation well can be as much an art as science. There are a number of ways where careful planning and decisions can make involvement earlier and more effective. Japanese corporations may vary widely in their sophistication with U.S. patent litigation. Some larger Japanese corporations even have U.S.-trained lawyers in-house to navigate process involved, but most do not.

To achieve a well-managed litigation, outside counsel, in-house corporate IP people, in-house technical people, and in-house business people should stay involved by participating in key decisions. To assure the best outcome for a corporation, inhouse counsel (if any) and the business people responsible for the case should stay very involved. By participating in key decisions occurring in the litigation, the corporation can stay in charge and can assure that its business interests are pursued in the most effective manner possible. It is also recommended that a person within the company be appointed and a person within the U.S. litigation team at the outside counsel be appointed, to serve as the "window persons" in coordinating the activities of all of the litigation participants.

Remaining involved with the litigation process results in several important advantages. First, the business people, not the U.S. lawyers, remain in charge. Second, better decisions will be made. Third, involvement tends to make people more at ease with the process as it unfolds. Fourth, continued involvement in the litigation can assure that less opportunities for good advocacy get missed. Fifth, some work that can be done in-house can generally be done more cheaply than if done by outside counsel.

This article sets forth several ideas and thoughts for how to more effectively manage U.S. litigation.

Intellectual property litigation is becoming an important part of business operations in the United States. The explanation for why this is so relates to the changing nature of patent litigation.

First, the increasing volume of intellectual property litigation reflects the rise of businesses that are significantly based on or rely on intellectual property. While patent protection is somewhat important even to the "old school" steel and textile industries (for example to protect their manufacturing processes), generally speaking, intellectual property is the very life-blood of the new U.S. economy. Many businesses are started with, and defined by, an idea such as a business model or a particularly novel technological product. As intellectual property becomes the defining aspect of a corporation, the importance and likelihood of copying grow, as does the impossibility of "ignoring the infringement by a competitor" when a competitor moves in.

Second, there is an increasing acceptance of patent litigation in the business community and increased perception of the likelihood of success by patent owners. The U.S. Court of Appeals for the Federal Circuit was established in the early 1980s to (among other things) decide all patent appeals. Over the last twenty years, the Federal Circuit has demonstrated that patents have meaning and value. As the reputation and attention given to intellectual property suits has grown, the corresponding willingness to bring suit has grown as well.

Third, there is a growing appreciation of the value of an intellectual property lawsuit as a business tool. Intellectual property is focused toward the ability to define business markets (e.g., exclusive rights to sell a certain kind of product or provide a certain service on the Internet). Intellectual property rights can be, therefore, an important component of defining, preserving and enforcing a company.s business plan and goals.

Fourth, patent litigation can be profitable. As is known, all of the following remedies may be available to a successful patent-holder:

• Damages, including even "lost profits." This can include not only lost sales but also price erosion for sales the plaintiff did make and lost sales on collateral goods.

• Doubling or trebling of those damages.

• An award of attorneys’ fees and litigation.

• An injunction barring future infringing activity.

• A seizure order requiring the destruction of infringing goods.

Thus, not only are the damages potentially enormous, but the availability of an injunction can put entire markets at stake. In many cases, the economic value of an injunction exceeds even double or treble damages for past infringement.

This potential economic rewards for one party must be compared to the cost and the risk of losing. Patent litigation is complex and this is reflected in the cost. The cost in attorneys. fees alone can be enormous, as listed in the following table of costs for a medium-sized patent case ($1 to $25 million at risk).¹

Notwithstanding those statistics, however, it should be noted that many, indeed most, patent disputes never make it to trial, but are resolved at an earlier stage of the litigation for a far lower cost.

The "hidden costs" of litigation to the corporation, however, can be even more significant. The distraction from day-to-day corporation business and the effect on business (through customer perception or the impact on financing) are difficult to know until one has lived through it.

In short, the significance and total potential costs of patent litigation necessitate a well-managed case.

Concerning expectations of the result to be achieved from the litigation, certainly every client wants "total victory" — however defined — at minimal cost. But what is a "total victory?" "Total victory" depends on the facts and circumstances of each case.

Indeed, there may be occasions where the corporation.s business objectives in the litigation are met, but where the litigation nevertheless did not constitute a "total victory" in the corporation’s eyes. For example, if outside counsel delivers what it would consider to be a total victory after trial, but at a price that exceeds the corporation’s budget, it may not be a victory in the corporation’s mind at all. The client may have been expecting the same result, but at a fraction of the cost. After a litigation is ended, many corporations look at the "ROI" (return on investment) for the litigation, comparing how much the litigation brought in compared to its costs. Worse yet, the corporation may have expected a result that was impossible to achieve (like a patent owner being "guaranteed" of winning by outside counsel), but failed to appreciate the impossibility because it has not effectively communicated at the outset of the case. Therefore, understanding what the corporation wants, agreeing with the corporation on what the outside counsel will deliver, and clearly setting forth the expected costs of the outside counsel services are the keys to successful representation.

Understanding the corporation’s objectives, agreeing on the litigation strategy and projects, and managing these objectives requires effective, constant communication throughout the entire litigation process. Here are five steps that can be employed to effectively understand the corporation.s goals and to manage the corporation.s expectations throughout the litigation process.

The first step in managing expectations is in understanding what the corporation really wants from the case. Therefore, the most important question to identify is the underlying business objectives. Corporations often have both objective and subjective goals, both of which need to be explored.

A second step in managing expectations is in understanding the corporation’s experience with the litigation process in general² and with patent litigation in particular. If the corporation’s legal matters are managed by an in-house counsel who has litigated patent disputes in the past, then they are more likely to understand that patent law is esoteric, that patent litigation is time consuming and expensive, and that the cost of a mutually agreeable settlement often is more desirable, and certainly more predictable, than going to trial.

If the corporation has been involved with patent litigation in the past, it could be instructive to understand how those cases were resolved. Some cases may have been resolved on summary judgment while others may have been resolved on appeal after trial. Some may have involved money damages, others injunctive relief, others both injunctive relief and money damages. In any event, it is likely that the majority of their cases have settled at some point in the process. With history as

the teacher, these experiences most certainly will inform the client’s perspectives on patent litigation, and particularly the definition of success on any subsequent case.

Obviously, if the corporation has experience with patent litigation (and the law), it will be much easier for the corporation to consider possible outcomes to the case. Conversely, if the corporation has no experience in litigation, then evaluating evidentiary issues, discovery disputes, dispositive motion strategies and trial strategies will be as unfamiliar to them as they are to the layperson.³ The outside counsel, therefore, must take time to explain to the corporation what the applicable key legal principles are, as well as the litigation process and likely results given the facts in the case.

A third, important step in managing expectations is fully understanding the litigation process. It is not only the in-house patent professionals who must understand the process but also at least some of the business decision-makers. Corporations cannot possibly make an informed decision on whether to pursue patent litigation unless they understand the path of litigation itself. One of the best ways of explaining the patent litigation process is to go over a sample scheduling orders in patent cases pending in courts where it is being considered to file suit. Reviewing the standing orders of particular judges where the patent litigation may end up can be instructive in this regard. These orders may provide a relative framework for the critical events that likely will arise in their patent infringement case as well.

During the explanation of the steps in the patent litigation process, it is important to emphasize to your client that civil litigation, including patent litigation, is a slow process. Even in the fastest jurisdictions, your client.s patent litigation likely will not get to trial in much less than one year.⁴ Then, the appellate process typically takes at least another year, or more.

The fourth step is to discuss the potential high overall cost of the patent litigation. Certainly corporations want good value for money. Certainly every corporation wants to know up front how much litigation will cost. This estimate, of course, will vary depending on many factors including the amount in controversy, the technology at issue, the location of the court, your opponent’s litigation strategy and the length of the case. The cost of the case also will vary depending on the client’s business objectives and willingness and ability to invest in the litigation process.

If, on the one hand, a corporation wants to win at all cost, then the case likely will be more expensive because every issue will be fully developed. If the corporation has a limited budget because of its financial resources, outside counsel must understand this at the outset and explain in clear and concise terms what can be delivered at an agreed price. No matter what, the uncertainty of estimating costs associated with litigation must be understood by the corporation. There are many unanticipated events that occur during the litigation process that require estimates be revised. Anyone with experience with patent property litigation understands that estimating the cost of litigation is highly speculative and is subject to change depending on the facts and circumstances of each case.

The fifth step is to institute a system from the start to foster open and frequent information exchange between the corporation and the outside counsel. Good outside litigation counsel communicate with their corporation clients at every stage of the litigation process. Communicating well not only helps the corporation to understand litigation objectives, but also helps prevent the corporation from being surprised by bad news. A good communications system requires not only hearing what is expressly said, but also understanding that which is unsaid or impliedly said. Listening requires more than simply hearing. It requires follow up on issues that may exist beneath the surface, but that remain unexpressed by either side of the communication.⁵

Because litigation is a dynamic process, assumptions made at the outset of the case, as well as business objectives, may change depending on how the facts develop during discovery. Facts developed during discovery, rulings on dispositive or nondispositive motions, and witness performance during deposition can change the contours of the case dramatically. Therefore, the corporation must be kept up to date on what is happening in every phase of the case. If facts develop during discovery change the assessment of the case, the corporation must understand how and why, as well as how the changes assessment may affect the outcome. If these facts change the estimated budget, then this must be explained as well.

New developments of any sort must be immediately communicated. In particular, bad news should never come as a surprise.⁶ Bad news, in particular, also should be immediately communicated. A corporation’s expectations will never be met if bad news comes as a surprise. One way to eliminate bad news as a surprise is to understand the likelihood of success on various case specific events in advance.

A sixth step in managing expectations is to understand that outside counsel sometimes over promises or over commits what may happen in the litigation. As obvious as it may sound, promising a 100% victory at the beginning of a litigation is a disservice that a corporation should not accept from outside counsel. The corporation should demand that the outside counsel speak in terms of probabilities and possibilities given the facts and circumstances of the underlying case. Surely, most savvy clients will be uncomfortable with "can’t lose" predictions. In the author.s experiences, over promising always leads to expectations that are not met.

These more general comments should help the corporation obtain, in discussions with outside counsel, a frank and realistic vision of what may happen or is happening in the litigation.

The section sets forth some characteristics to look for in choosing U.S. patent litigators.

According to a major survey of large U.S. corporations about U.S. litigations (not patent litigations but including patent litigations) that was conducted by a large U.S. law firm,⁷ The factor most important in this selection of litigation counsel is "case specific experience," not past experience with the corporation. Once litigation counsel is retained, in-house.s counsel’s biggest concern with outside counsel is unpredictable cost. The second largest factor in the selection of outside counsel was "general competence and knowledge." The third most important factor was "reputation and success rate." Other factors identified in the survey were of even more minor significance.

Any attorney chosen also must be competent and skilled in using technology throughout the litigation as well as at trial. Almost every serious litigation uses an array of different technology throughout, including image documents, videotaped depositions, demonstrative exhibits, and re-creations. Also, the use of extranets as a way to cut costs of communication with the corporation is also very important. Extranets are extremely easy way to communicate with clients. An extranet is a secure network that is used to share information from the outside counsel.s central server. All relevant docketing information, case documents and pleadings can be made available to the corporation at all times.

For example, in the past, document imaging had been reserved for extremely large cases with high stakes. This was largely due to the higher costs of imaging compared to making paper copies. However, imaging costs have fallen drastically in the last few years. Now, document imaging is a cost-effective way of managing the documents in the case. According to some surveys, imaging can reduce total cost. The cost of imaging is a one-time expense. Imaging can save money by: (1) reducing the total number of copies made; (2) reducing the time spent looking for misplaced documents; (3) making all the documents available at any time and at any time zone through the internet; and (4) easier communication with clients. There are a number of specific actions that must be taken when using document imaging technology, but the advantages of using this technology frequently outweigh the cost.

Another good characteristic is looking to choose outside counsel is the ability of that attorney to communicate with Japanese clients. U.S. patent litigators that work with Japanese corporations generally can do that better than those that have not. There is no substitute for frequent communication with the client. Good litigation counsel communicates with our clients at every stage of the litigation process. This is a way for them to become involved and more comfortable with the process. Communicating frequently and on a regular basis, not only with in-person meetings but also through formalized reports and e-mails, helps better understand the litigation as it develops and also helps the corporation from being surprised by bad news.

According to an advanced litigation seminar that the author recently took, one way to effectively communicate is to expressly restate the overall litigation objectives. Having the corporation restate the understanding of its objectives and concerns to outside counsel, as well as the understanding of the likely outcomes of the case, are effective ways to arrive at a common understanding.

It is certainly true that, in most patent cases, there are a wide variety of potential defendants. The U.S. Patent Laws grant the right to patent owners to prevent others from making, using, selling, offering for sale or importing into the United States a product or process covered by the patent. Infringement can be found on any of these acts. For example, a company infringes if it makes goods in the United States that are covered by a patent, even if those goods are only sold overseas. Similarly, a company that using an infringing article in the United States is an infringer, even if the product was bought from a third-party.

There are even perhaps even more potential targets in a manufacturing stream in the United States. For example, for a car that contains an infringing part, a number of companies could be sued. The automobile supplier can be sued, the original equipment manufacturer (i.e. the car company) could be sued, the car dealership can be sued, as well as the ultimate purchaser or ultimate consumer of the car. For these reasons, a patent holder has a choice of who to sue.

Also, there are a number of strategic and legal concerns involved with the selection of defendants. These concerns can be where the suit might be brought, the likelihood of a successful motion to transfer, or the identity of the opponents. If the potential target is a customer of the patent owner, it rarely makes good sense to sue customers or potential customers, even though the potential customer has poor judgment and purchases goods from the infringing competitor.

Another potential class of defendants could be to include a corporate alleged infringer.s officers, senior managers, board of directors, and/or owners. This class of potential defendants is frequently available. These individual targets frequently are most available when smaller companies are being targeted. The U.S. Patent Laws allow for such individuals to possibly be held personally liable for patent infringement . not just the company . if it can be shown that they were personally responsible for the decisions behind making the infringing product or using the infringing process.

Despite their being a veritable cornucopia of potential defendants in some circumstances, the default "best practice" is to sue the corporation that is most directly allegedly infringing the infringement. For example, it is perhaps better to sue the automobile supplier in our example above, instead of the dealership or the ultimate consumer. It is also perhaps not wise to sue a customer or potential customer, such as the OEM car manufacturer itself in our example. Once the most direct infringer is located, it is then possible to consider other issues such as which jurisdictions it may be possible to bring the lawsuit. Further, it is rarely advisable to include individual defendants as defendants despite being able to do so. This strategy is frequently thought to place more pressure on the individual and on the company to try to settle. However, in the author’s experience, this strategy of including individual defendants rarely works well. Most Federal district court judges personally do not like including such individual defendants and they will take steps within their power to protect those individual defendants.

As mentioned, patent litigation is expensive no matter what the technology, no matter where suit is filed, and no matter how much is at stake. Recent AIPLA statistics confirm that the cost of patent litigation can be staggering.

Litigators typically dislike and often resist preparing litigation budgets. There are several major reasons why. First, some clients treat budgets as fee caps, and therefore sometimes refuse to pay legal fees in excess of budgetary amounts. Second, some clients refuse to pay for the budgeting process. Third, the uncertainties of litigation make any budget estimate inherently speculative.

Nevertheless, corporations need more budget guidance from outside counsel than the conclusory statement: "It is going to be very expensive." Specifically, corporations want and need to know a realistic estimate of the costs associated with achieving their stated business objectives. This is what corporations do in other aspects of their business so why not with patent litigation as well? Corporations need these estimates to determine whether to pursue litigation, or to consider alternative dispute resolution techniques, or to forgo the litigation altogether. Indeed, litigation costs are part and parcel of the potential downside risk a corporation may face, and thus are part and parcel of any risk analysis. Once in litigation, budgets are necessary to prevent "sticker shock" and the incumbent surprise.

Therefore, once outside counsel understands business objectives and priorities, litigation counsel should prepare a detailed litigation plan and budget. The plan will provide a roadmap of how the outside counsel proposes to reach the corporation’s objectives. If the corporation decides to pursue the case, then the plan and budget also can be used as mileposts to measure progress.

Importantly, any budget must not only address legal fees, but also out-of-pocket expenses, or disbursements. Disbursements can be significant in patent cases because of the expert intensive nature of these litigations, as well as the expenses that may be incurred to simplify the case to educate the judge or jury.

There are as many approaches to budgeting as there are the number of imaginative lawyers and clients. Because many of the costs associated with litigation are beyond the control of litigation counsel once litigation commences, budgets often change because budgeting assumptions are belied by events that develop during discovery. Nonetheless, looking at available cost statistics and developing a phased-based budget can help litigation counsel and clients develop a working budget for a case.

A full and complete discussion on how to prepare a litigation plan is outside the scope of this paper. That said, the scope of any litigation plan will vary depending on the corporation’s business objectives and the nature of the case. Generally speaking, most initial budgets nevertheless will include estimates for preliminary investigation and case analysis, preparation of the discovery plan, preparation of pleadings (including complaints, answers, or counterclaims), written discovery including document production, deposition discovery, non-dispositive motions, dispositive motions, experts, settlement negotiations and trial. However, a sample "litigation plan" is attached hereto as the Exhibit.

Generally, it is helpful from a litigation management perspective to prepare phasebased budgets that break the litigation into its constituent parts based on litigation counsel.s well-defined litigation plan. Breaking a litigation into its constituent phases allows for more cost-effective litigation management to occur.

Patent cases are complex litigations involving substantial document production, electronic discovery, motion practice, demonstrative exhibits and many expert witnesses.

One of the largest factors is the litigation style of opposing counsel and opposing counsel.s client. In fact, in the author.s experiences, this could account for 50% of the entire budget. The more aggressive the opposing counsel, however unreasonable it may be, the more costly the case. If your opposing counsel has a reputation for being overly aggressive, the case almost certainly will be more expensive. An outside counsel’s response to such aggressiveness also is a big factor in cost. If outside counsel feels a need to respond in the same way to every aggressive act then the costs will rise.

Litigation counsel also must factor in the number of patents and the complexity of the technology at issue in estimating the litigation budget. Generally speaking, the more patents there are in suit, the more expensive the case will be (and there will be more documents to review, issues to analyze, etc.). Likewise, the more complex the technology the more costly litigation is to simplify to facilitate judge and jury comprehension (and it becomes more likely that more than one technical expert will be retained).

Another subtle factor is time. The more time is available for the litigation the higher will be its cost. Patent litigations are generally so complex that whatever open time is available will be absorbed in activities that are reasonably connected to litigation. Accordingly, the longer the amount of time available for the litigation the greater the overall cost.

Simple technology can be used to illustrate the budgeting process, and make it more efficient, less painful and more useful. This technology can be used to update budgets as the case progresses, or it can be used to evaluate actual legal fees and expenses incurred with budgetary estimates. Fortunately, commonly available spreadsheet software programs makes the budgeting experience relatively easy to illustrate because it allows information to be organized, manipulated, duplicated and interrelated in a flexible, nearly universally familiar format.

Three important steps could maximize the likelihood of preparing an effective budget with a spreadsheet software program. First, identify who will be working on the matter. Lawyers, paralegals, professional staff and anyone who will bill time to the case should be identified along with their billable rates. Using spreadsheet software, this information can be entered one time and duplicated throughout a budget as necessary. The spreadsheet will also be an opportunity to understand who will be the U.S. litigation team. Knowing who will be working on the matter, as well as each time-biller.s hourly rate, could help build confidence in the team members and what they will be doing on the litigation.

Second, the budget will identify the work that will be done and when it will be done. AS mentioned, budgeting is made easier by breaking the work into logical phases of the litigation as defined by common tasks and anticipated due dates. Spreadsheet software lends itself well to deconstructing complex budgets into such phases of the litigation because separate sheets within a single spreadsheet file can be used to track common tasks that have been grouped into the different phases.

More and more these days, sophisticated clients are tracking outside counsel.s work in task-based increments, rather than by the chronological approach to budgeting followed by most lawyers. This is consistent with a phase-based approach to budgeting and is consistent with the American Bar Association.s creation of a set of task-based codes for every phase of a litigation.

Third, the budget will help to determine how much time the outside counsel think it will take their team to accomplish the tasks that have been identified.

Budgets broken into detailed, monthly, task-based estimates can readily be used to identify and evaluate litigation expenses with clients. They can also be used as a cross reference to evaluate — and refine — litigation objectives.

In addition to estimating legal fees, the budget estimate must also address the outof- pocket disbursements outlined that probably would need to be paid during the litigation. Again, these expenses include such things as expert witness fees, expenses for video depositions, expenses for document imaging and fees for demonstrative exhibits and videos to simplify your presentation of the dispositive motion or trial stage can be considerable. Conservatively speaking, these expenses easily can approach, and at times exceed, 25% to 35% of the attorneys. fees in a case.

Outlays, disbursements and other anticipated charges can be budgeted in a similar fashion similar to that of attorneys’ fees. Thus, although document scanning or expert fees could be estimated in a cursory, lump-sum fashion in a summary sheet, spreadsheets allow virtually any anticipated expense to be budgeted in detail, in connection with logically associated tasks and at realistic dates in the litigation. Indeed, given the significance of some of these expenses, they should be outlined in detailed, rather than in lump sum fashion. Moreover, like other data entered in the spreadsheet, disbursements can be linked to summary sheets and automatically calculated into the bottom line.

As should be apparent in the examples above, data in the budget can be readily manipulated, updated and revised. For example, if team members change, billing rates are adjusted, or anticipated work-hours are adjusted, then a few changes can update an entire budget.

How to Send and Respond to Warning Letters⁸

A warning letter (sometimes called a "cease and desist letter." is typically sent to a person or entity that may be liable for patent infringement. Thus, a letter may be sent to any entity in the distribution team who may be doing infringing activities.

A warning letter may be sent by the patent owner (either the individual owner or a corporate representative, by inside counsel for a corporate patent owner, or by outside counsel representing the patent owner. Because the person signing the letter may need to execute an affidavit or have his deposition taken if there is litigation, and the tone of the warning letter may be affected by the center (e.g., a letter from an outside counsel may be perceived as more threatening than a letter from a corporate executive), the patent owner usually gives careful consideration to the person chosen to send the letter.

A warning letter may have one or more of the following components: (1) an introduction that identifies the patent at issue; (2) a statement that products made, use, imported, or sold by the recipient, or a process used by a recipient, infringes the patent; (3) an offer to negotiate a license to the patent, a proposed royalty rate, or a lump sum payment for a fully paid-license; (4) a threat to sue the recipient for patent infringement if the allegedly infringing activities do not see; (5) a deadline for responding to the warning letter; and (6) a copy of the identified patent. Obviously, there are many possible variations of such a letter, the legal consequences of which can also be varied.

Warning letters may affect one or more of the following under U.S. patent law: (1) the recipient.s ability to file a "declaratory judgment suit" against the patent owner to have the patent declared invalid, not infringed and/or unenforceable; (2) notice of infringement under 35 U.S.C. § 287 for purposes of recovering infringement damages accrued prior to suit; (3) notice of infringement for purposes of establishing willful infringement; (4) the recipient.s ability to assert toward or unfair competition claims if the letters have been sent in bad faith; (5) start of the latches; and (6) the first step in establishing equitable estoppel. Therefore, the legal implications of sending warning letters should be carefully thought out. Upon receipt of a warning letter, the recipient can take one of several actions: (1) ignore the letter; (2) delay responding to the warning letter by, for example, advising the patent owner that more time is needed to investigate its allegation; (3) respond that the patent is not valid, non infringed and/or unenforceable after obtaining an opinion of counsel; (4) discontinue sales of the accused infringing product or modify the accused products so that it does not infringe the accused patent; (5) initiate licensing negotiations; (6) settle by paying the lump sum of the royalty demanded in the warning letter; or (7) file late declaratory judgment suit to have the patent declared invalid, not infringed and/or unenforceable, plus assert any tort or antitrust claims based upon the patent owner.s bad faith. Each of these could be individually considered.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.