3 October 2012

Eyeing Up The Opposition

So, your best laid plans are suddenly thrown into disarray by the emergence of a competitor’s patent application. They might not get the application granted, but you only have three choices, right? To modify your plans to avoid what your competitor is trying to claim, to try to arrange a licensing agreement, or to keep going regardless and risk the music and expense of a court case should grant occur? Wrong.

As hinted at above, the patent application only sets out what your competitor would like to claim, not what they will necessarily be entitled to claim. In theory, the patent office concerned should force your competitor to limit the scope of the claims to what, if anything, they are entitled to. In practice, this does not always occur, either because the patent office is not aware of all of the facts, or because a mistake is made in the application of the law.

By taking action early you can best defend your rights at minimal cost.

Of course, to defend yourself you must be aware of your competitor’s application. The topic of how to find out what your competitor is up to is best left for another day, but the importance of monitoring their patent filing activity on a regular basis cannot be over-emphasised.   
Once you have become aware of your competitor’s application, the next step is to establish if it could cause a problem. In particular, it is important to establish if any of your plans or actions could result in an infringement of any granted patent, bearing in mind that you could be liable for damages from the pre-grant date of publication of your competitor’s application. The answer may not be clear cut and if you are in any doubt it is important to seek legal advice.

If there is a possibility that you could infringe a granted patent based on your competitor’s application, then you will want to do everything possible to minimise that risk. As stated above, you can modify your plans or seek a settlement, but these are not the only strategies. Instead or in addition, attack may be the best form of defence.

In many jurisdictions, including before the European and UK Patent Offices, it is possible to file observations as a third party whilst the patent office concerned is examining your competitor’s application. Such observations can often be filed anonymously and may be particularly useful if, for instance, it is apparent that the patent office has missed or misunderstood a relevant piece of evidence, or has misinterpreted the law. Whilst third parties do not get to participate further in the proceedings, the submission of such observations can often be a low cost method of ensuring an effective outcome.

If the application proceeds to grant and is still a problem, then in some jurisdictions it is possible to apply to the patent office concerned to oppose the patent for a limited period. For example, before the European Patent Office there is a nine-month window from grant within which anyone can oppose a patent. Opposition procedures typically involve the filing of written arguments and evidence by both the patent proprietor and the opponent, culminating in oral proceedings before a panel of patent office examiners to decide the outcome.

Whilst not necessarily cheap, the opposition procedure can be a very cost effective route through which to seek the revocation or limitation of a competitor’s patent, with costs typically being an order of magnitude less than seeking the equivalent action before a court. The procedure is particularly cost effective in Europe, since on grant a European patent is transformed into a bundle of national patents. Currently, outside of the opposition period each national patent would have to be challenged on a country-by-country basis. So, by seeking revocation or limitation centrally before the European Patent Office, the cost savings can be enormous.

The best action to take will of course depend on the facts of each case. The above discussion merely serves to highlight procedures which are often overlooked by the uninitiated and is by no means a comprehensive summary of all the options available. If you find yourself in a position where you are concerned about a competitor’s patent or application, we would strongly advise seeking the advice of a patent attorney sooner rather than later since, as discussed above, there is often much which can be done without breaking the bank.