In my practice, I counsel small and midsize business clients, many of which are astute with regard to securing their intellectual property rights. They have federally registered their trademarks with the U.S. Patent and Trademark Office, secured a portfolio of patents both domestically and internationally, and registered their copyrights with the U.S. Copyright Office.

However, when they discover an infringement of their intellectual property rights, they are somewhat at a loss about how to protect themselves. They often are concerned that enforcing their rights would be financially detrimental to their businesses. I therefore work with my clients not only on a legal strategy, but sometimes, and more importantly, on an economic strategy for protecting and enforcing their rights in a cost-effective manner.

First, we look at the harm to the business that the infringer is causing. Oftentimes clients may not like that a business with a similar trademark is in its marketplace or that a competitor has come out with a similar product. However, if they are not losing sales (current or projected), suffering product price erosion, or experiencing a loss of goodwill, it likely does not make much sense to bring a lawsuit against the infringer. Instead, other less costly mechanisms should be explored to bring the client’s rights to the attention of the infringer and work out an amicable resolution.

If the business is being harmed, we need to quantify the damages directly attributable to the harm. The enforcement strategy will be driven in large part by the amount of damages that have been incurred and/or can be recovered. If a client’s damages are less than $100,000.00, it usually is not prudent to spend an equivalent amount in attorneys’ fees to stop the infringement. Ideally, a client recovers more in damages than it spends in fees and derives a significant benefit in driving the infringer out of the marketplace.

Next, we evaluate all options. Often it makes sense to first have the business owner contact the infringer directly to see if the two might be able to reach a business resolution without attorneys. It is usually simpler for the CEOs to arrive at a solution without getting their attorneys involved. If this option is not available, the intellectual property owner’s attorney could send a “cease and desist” letter to the infringer. In some trademark and copyright cases, the infringers are unaware of their infringement. Sometimes sending a firm and informative letter (rather than a threatening letter) gets the attention of the infringer and a favorable response. The infringer may only need counsel from an intellectual property attorney to understand that what it is doing violates the law and to prompt a product redesign or rebranding.

For some large companies that are infringing upon a smaller company’s patent rights, it may require filing a lawsuit to garner the infringer’s attention. Once the suit is filed, a courtesy copy of the complaint along with a letter inviting the infringer to discuss settlement options can be sent to see if the parties might reach an amicable resolution short of engaging in the litigation process.

If the less expensive dispute resolution mechanisms discussed above are unavailable and/or ineffective, a client may find itself in litigation to enforce its business’ rights. Intellectual property litigation is a tool available to the small and midsize business. The client just needs to be cost conscious and savvy with regard to how it spends its litigation dollars. Here are some best practices I employ for clients on a tight budget:

1. Understand the Process: Prepare a detailed budget for clients prior to initiating their lawsuit to minimize surprises. Have clients pay set monthly fees toward the budget to help normalize the litigation fees.
2. More is More: Draft detailed litigation initiation documents, such as federal court complaints, with strong jurisdiction and venue facts to discourage early motion challenges.
3. Your Client is the Expert: Let clients take the first pass at creating infringement charts, drafting requests for production, answering interrogatories, etc. Clients are usually the experts on their intellectual property and industries. The more work they can shoulder, the less legal fees they incur.
4. Designate a Single Point of Contact: Have the client appoint an individual within its organization that is responsible to assist with the litigation efforts. Litigation counsel can then confer directly with one person who can organize document collection, locate the proper witnesses for depositions, draft interrogatory responses, etc. A single point of contact within the client’s organization will save litigation counsel a significant amount of time tracking down the proper individuals and information during the discovery process.
5. Stay on Point: Focus the litigation process on the tasks that are most important to get to trial. Figure out early exactly what is needed to try the case, and limit the discovery requests and depositions to just the essentials.
6. Motions Cost Money: The more consensus that can be reached with the infringer, the less costs both parties incur. Try to avoid discovery motion practice and instead reach agreement on the scope and timeline for the production of relevant materials. Consider stipulating to claim construction if both sides are amenable to avoiding the costs of Markman briefing.
7. Consider Settlement Early and Often: Parties in litigation should always keep the communication lines open with regard to settlement. While costs increase as a litigation progresses, issues often narrow. Discovery supports or forecloses various claims and defenses. Prior art may surface which causes a patent owner to reevaluate the scope of its rights. Claim construction may make or break an infringement position. Settlement positions are fluid and negotiations should be ongoing.

If you have concerns about enforcing your intellectual property rights, contact an intellectual property litigation attorney. You may want to interview a number of attorneys to make sure that they are proposing a strategy that is economically feasible as well as legally sound. Clients should understand their options, the litigation process, and likely outcomes before deciding upon a course of action. The enforcement of intellectual property rights is a common issue encountered by businesses and can be handled in a cost-effective manner.