So you’ve come across a competitor copying your brand, design or product. We’ll call them the IP Infringer. Filing legal proceedings in court against the IP Infringer is one path which can be taken to stop their unauthorised conduct. However there are key steps that can and should be taken first to try and avoid this. Following the 5 step guide below, and working with the right legal advisor, will dramatically increase your prospects of favourably resolving your IP dispute earlier.
1. Have a registered right
Having a registered trade mark, a granted patent or a registered design puts you in the box seat. It’s a strong right and often more cost effective than relying solely on reputation-based causes of action. Don’t worry if you don’t have your IP registered right now. Action can still potentially be taken against the competitor now but do take steps to get registered rights for next time.
2. Know the lay of the land
Get a clear assessment of where you stand legally and your prospects of success. There are two aspects you need a clear understanding of. First, do they infringe your IP right? Second, if they do infringe, what is the risk that they might have a defence or counter claim? It is only after you know the answer to both these questions can you then make an informed and sensible business decision about whether you should take action or how far to take your action.
3. Develop a strong legal strategy and know your budget
Once you know the strengths and weaknesses of your legal rights, a tailored legal strategy can and should be mapped out. A well mapped out strategy to the dispute should mean there will be little to no surprises along the way. It should be in line with your business objectives and clearly outline your cost exposure with certainty from start to finish. A good strategy will always keep one eye on settlement opportunities which benefit your business. The strategy itself should create those opportunities.
4. Will it benefit your business to stop the IP Infringer?
This requires you to take a step back and make an objective assessment on whether the IP Infringer is actually damaging your business or, if left unchecked, has the potential to do so in the future. Do you need to send a marketplace signal to your competitors that copying your IP will result in legal action? If the answer is yes and the cost / benefit analysis makes good business sense then step 5 awaits.
5. Put the IP Infringer on notice and show them you mean business
This step starts with a strongly drafted letter of demand which puts the IP infringer on notice of your rights, the consequences of infringing your rights and lists a set of demands which must be complied with in order to avoid legal proceedings. The various strategies mapped out in step 3 above are then implemented to escalate pressure on the infringer to achieve a commercially favourable result for your business. The majority of dispute matters will settle in this phase without the need to file legal proceedings.
What is a good result for your business?
This will differ from business to business and also depend on the motivations for commencing the IP dispute. An example of a typical favourable settlement will be that the IP Infringer ceases the infringing activity, destroys any remaining infringing products / marketing collateral and pays appropriate compensation to you. Depending on the nature of the dispute or nature of the IP Infringer, the compensation obtained can often recoup your legal spend or exceed it.
TAKE AWAY POINTS
- Go into an IP dispute ‘eyes wide open’ – know your legal position, risks and most importantly costs obtain advice and engage in pre-litigation correspondences eg letter of demand and subsequent correspondence
- Before making a decision undertake a careful and objective cost / benefit analysis on whether to start a legal dispute. Put another way, will it benefit your business?
- Take the IP dispute in stages and reassess progress regularly to ensure the IP dispute is still in line with your original strategy and commercial objectives.
- Always keep one eye on achieving a commercially favourable settlement. A strongly run IP dispute (pre-litigation) should still be designed to create potential settlement opportunities along the way and where a possible avoid litigation.