What to do next
Who this affects
Manufacturers and importers, software and hardware companies, distributors and retailers who did not make the product, e-commerce sellers, and startups approached shortly after a funding announcement. Resellers are frequently targeted precisely because they are less equipped to assess the claim than the manufacturer who indemnified them.
Common situations
A competitor's counsel writes alleging infringement. A non-practising entity sends a licensing demand to many companies at once. A former supplier asserts a patent after a relationship ends. A marketplace removes your listing following a patent complaint. Your customer receives the letter and turns to you under an indemnity.
Do not do these three things
Do not reply on the merits before a claim analysis - an admission is hard to unwind. Do not destroy or alter design documents, source code or correspondence; once a dispute is foreseeable that can be treated as spoliation and is worse than the underlying claim. And do not simply ignore it: continued sales after notice can affect the assessment of damages.
Get a non-infringement and validity analysis
Infringement is assessed element by element against the claim wording. If a single element is absent from your product, there may be no literal infringement. Separately, a patent lawyer or agent will search prior art and review the prosecution history for narrowing amendments - what the applicant gave up during examination often defines what they can now assert.
Check your indemnities and insurance
Supplier and manufacturer agreements frequently contain IP indemnities, and the party that designed the product may be obliged to defend you. Notify them promptly and in the form the contract requires. Some commercial policies also respond to IP claims - notice periods are strict, so notify before the claim is formulated.
What to prepare
The letter or complaint and the patent number, your product's design documentation and development history with dates, evidence of independent creation, any prior art you already know of, supply and distribution agreements with their indemnity clauses, and your sales figures for the product. Gather what you hold; your lawyer obtains the rest through proper process.
Possible legal pathways
A reasoned non-infringement response, a design-around where a small change removes an element from the claim, a negotiated licence where the patent is strong, an administrative validity challenge - inter partes review in the United States, re-examination or impeachment elsewhere - or defending proceedings. A declaratory action is also available in some circumstances to resolve the threat on your own terms rather than waiting.
Frequently asked questions
Should I stop selling immediately?
Not automatically, and not before advice. Stopping can damage your business unnecessarily if the claim is weak, while continuing after notice can affect damages if it is strong. That trade-off is exactly what the claim analysis resolves.
Can I just ignore the letter?
No. Ignoring an assertion tends to escalate it, and continued sales after notice can increase exposure. A considered response is different from a concession.
What is a non-practising entity?
An entity that holds patents to license or assert rather than to make products. Assertions are often sent to many companies at once with licence demands priced below the cost of defending - which is a commercial calculation as much as a legal one.
Can the patent be invalidated?
Validity challenges are a standard response and administrative routes exist in most jurisdictions. Whether it is worth pursuing depends on the prior art, and that assessment comes before you decide how to respond.
My supplier made the product - am I liable?
Sellers and importers can be liable, which is why supply agreements commonly contain IP indemnities. Check yours and notify the supplier in the form the contract requires.
Which court would hear this?
In Canada, the Federal Court or a provincial superior court. In the United States, a federal district court, with all appeals going to the Court of Appeals for the Federal Circuit.
What kind of lawyer do I need?
A patent litigator, usually with a registered patent agent for the technical claim analysis. Ask about a fixed-fee initial assessment - most of the value is in the first analysis.
This is general information, not legal advice. Laws vary by location and every situation is different — speak with a qualified lawyer about your specific circumstances.