Contacting The Patent Holder

If a competitor's patent has already issued, and it appears invalid, the question is whether one should contact the competitor early on (to proactively forestall litigation), or just wait to see whether the patent holder issues a cease and desist letter. To a large extent that depends upon the stage of development of the potential infringer's product or service. If the potentially infringing product or service is at a fairly early stage of development, then it may be a very good idea to engage the patent holder in some sort of discussion regarding validity and infringement. If changes need to be made to the product/service it is almost always less expensive to make them earlier rather than later. Another timing factor is cash flow. It may well be that the patent holder has a lot more monetary and other resources than the potential infringer, so that the latter may well want to gain strength in the marketplace, complete another round of funding, or achieve some other milestone before doing something that may trigger the expense of litigation.

Beyond timing one should evaluate broad strategic considerations. It may be, for example, that the potential infringer is looking to sell its own patent portfolio (or market position) to the patent holder, and offering a friendly challenge to the patent holder may assist in the bargaining position. This is especially true if the potential infringer has critical information (such as on-sale bar information) that is not generally accessible to other competitors.