You’ve Protected Your Intellectual Property but Someone Rips It Off. What Next?

You've protected your intellectual property, the super product you created that everyone said could be the next big thing. And then someone rips it off anyway. What do you do next?

You’ve Protected Your Intellectual Property but Someone Rips It Off. What Next?

Protecting your intellectual property is worth the investment of hiring an attorney who can guide you through the process and answer questions, along with going after someone who steals your idea. 

Everything checks out legally from top to bottom regarding your intellectual property, a super new product that could be the next big thing. You feel good about being protected. It was a hurdle, or several of them, but nonetheless something that needed to be done. Now it's time to enjoy the fruits of your hard work, promote it to increase sales, and possibly think about the next thing you want to create.

And then someone rips it off anyway.

What can you do about copycats of intellectual property? Within the fishing industry this isn't a small or funny matter. Joseph Teleoglou is an associate at Snell & Wilmer in their Orange County, California, office, and offers some advice about what you can do.

Protection Is Important

Every fishing company has some intellectual property that can be protected. This intellectual property can include brands (eligible for trademark protection) and new and unique product designs and manufacturing methods (eligible for patent protection). Patents and trademarks do not, however, prevent copycats – if your product or service is successful, there is a good chance it will be copied.

However, if you have a patent for your product or a trademark for your brand then you are in a much stronger position to protect them. For example, sending a takedown notice to an online retailer for trademark infringement often results in the online retailer removing the illicit product from their platform, if you provide proof of your protection. Obtaining intellectual property can be relatively easy and budget friendly for the value it provides (legal fees for a medium complexity patent application are in the ballpark of about $10,000, and a trademark can cost approximately $1,200).

Finding Trademark Infringement

Finding infringement can be difficult but there are steps you can take to find these copycats. Most trademarks, including some logos, include a limited amount of specific text which allows you to search for duplicates. You can perform an internet-based search for the exact text of the trademark to see if your mark is being illicitly used.

You can also set up alerts (such as Google Alerts) that will notify you if an exact word or phrase shows up on the internet, alerting you to new product offerings by your competitors who are using your trademarks. There are also companies that provide trademark monitoring services. These companies can monitor both U.S. and international markets to find infringement of trademarks, notifying you if infringement is found.

Joe Teleoglou
Joe Teleoglou

Finding Patent Infringement

Patents are inherently more complicated than trademarks, making them more difficult to police. Fortunately, the fishing tackle industry is relatively tight-knit and there are limited retail outlets for fishing tackle (as compared to a product such as Q-tips® which can be sold at gas stations, grocery stores, pharmacies, etc.).

This allows you to look around tackle shops and the limited number of online retailers to see if your competitors are selling products infringing on your patent. As with trademarks, you can also perform an internet search to find products which may infringe on your patents. For example, if you developed and patented a fishing reel with five drag washers on either side of a drag gear, you could search the phrase “fishing reel five drag washers.”

Once you find a potentially infringing product, it may be helpful to purchase one of the copied products and take it apart to see if it really does infringe your patent. Continuing the five drag washer example above, you could purchase a reel, take it apart to determine whether it does in fact include five drag washers on either side of the drag gear. Your patent attorney can assist with this investigation to determine whether infringement exists.

Enforcement Step 1: Ensure Infringement Is Occurring

An important first step before asserting your patent or trademark against an infringer is to discuss the matter with your intellectual property attorney to ensure that the copycat is infringing your patent or trademark. If your attorney did not obtain the protection for you, provide him with a copy of the patent or trademark, or information he can use to find your patent or trademark. Also provide your attorney with any evidence you have of the infringement including copies of websites, magazines, or flyers with the infringing brand or product.

If possible for patent infringement, provide a sample of the copied product to your attorney so he can analyze the sample with your patent in mind to determine infringement. In addition to providing an opinion as to whether infringement has occurred, your attorney can also investigate the strength of your patent or trademark, discuss your goals to tailor any future actions, and research the infringing company to develop a strategy for stopping the infringement.

Enforcement Step 2: Cease and Desist Letters

After determining that your patent or trademark is infringed, your attorney may recommend sending a cease and desist letter to the infringing company. A cease and desist letter will ask the infringer to stop the unauthorized use of your patent or trademark (cease) and to not use the patent or trademark in the future (desist). The cease and desist letter should inform the copycat of the existence of the patent or trademark, explain the reasons infringement is suspected, and give a deadline for the copycat to respond. The goal of the cease and desist letter is to quickly end the infringement and avoid expensive litigation.

The cease and desist letter can take many tones based on the result that desired. It can be aggressive, which offers the benefit of potentially scaring the infringer into immediately stopping the infringing activities. The letter can also take a softer tone, which offers the benefit of maintaining an open dialogue with the infringer to increase the likelihood of reaching an agreement during negotiations. A thoroughly researched and well-written cease and desist letter can cost a few thousand dollars, which can be of great value if it ends the infringement (and thus reduces your competition) or results in you receiving royalty payments from a license agreement.

Results of Cease and Desist Letters

Multiple scenarios may arise after sending the cease and desist letter to the infringer. A great outcome is receiving a response from the infringer informing you they plan to immediately stop the infringement and destroy any remaining inventory (if any exists). Alternatively, the infringer can signal that they are open to negotiations.

Depending on your goals, your attorney can reach a settlement agreement (e.g., allowing the infringer to sell through their inventory but agree to desist from any future infringing sales) or can negotiate a licensing agreement (e.g., allowing the infringer to continue using your patent or trademark in exchange for paying you a royalty fee). A less desirable outcome can occur when the party refuses to comply. In this situation, your best course of action may be to file a civil lawsuit for the infringement.

Enforcement Step 3: File a Lawsuit

Getting involved in a lawsuit can be scary, but it does not have to be. Although avoiding litigation is often advised, filing a lawsuit may be necessary if the infringement will not stop otherwise. It is ultimately a business decision as to whether to file a lawsuit, but your attorney can walk you through the costs and benefits of filing suit, the likelihood of success, and what the financial results of the litigation may be. It ultimately may not make sense to file a lawsuit (e.g., if the infringing party is not making much money from the idea because any monetary remedies you receive may be less than it would cost to litigate the infringement matter), but you will have a much better idea after speaking with your lawyer.

You may be able to recover some or all your legal fees from the infringer in “exceptional cases.” Also, in patent cases, you may be able to recover up to three times the calculated damages caused by infringement, if the infringing party was “willful” in their infringement. The definitions of “exceptional case” and “willful” infringement are not clear, but your attorney can help you decide whether you may be able to recover your legal fees or extra damages from the copycat.

In addition to filing a lawsuit, your attorney may recommend filing an injunction or temporary restraining order, requesting a judge to order the infringing party to immediately stop the infringement. This can be especially valuable if the copying is harming your goodwill or reputation in the industry, or seriously affecting sales of your fishing tackle. Additional steps may be taken for particularly egregious infringement, such as notifying law enforcement (which may bring a criminal action) or the International Trade Commission (which may prevent importation of infringing goods from overseas, an especially valuable result if the infringing products are manufactured overseas).

Failure to Enforce Intellectual Property Rights Can Be Fatal

If you do find instances of infringement of your trademark or patent and fail to take any actions, then you may lose the ability to sue the specific infringer, as well as potentially lose your trademark rights. A statute of limitations can prevent you from filing a patent lawsuit more than six years after infringement of your patent. No federal statute of limitations exists for trademark infringement, but states have their own limits (many are four years after infringement) which may also be applied to federal cases.

In addition to losing your rights to sue a specific copycat, allowing the offending company to continue to infringe your trademark can result in a reduction in strength of the trademark, or the trademark becoming abandoned altogether. Note that it is unlikely for a trademark to become abandoned for not enforcing it against a single infringer, but the more copying that occurs, the more likely abandonment becomes.

Rights Without Formal Protection?

The most effective remedies to infringement is to have formal patent or trademark protection to cover your brands and products, however, you may still have some ability to stop the copycat. This protection includes “common law” trademark rights. In addition to federally-registered trademarks, states provide trademark protection to words, phrases, or symbols that meet the requirements of trademark protection and have been used to sell your fishing tackle or fishing services. State trademark protection is not as powerful as federal trademark protection, but it does provide an avenue of protection against trademark infringement if you failed to federally register your trademark.

Another less known element of intellectual property is trade dress. As with trademarks, trade dress can be protected federally or by “common law” state trade dress laws. Trade dress protects the “overall image and appearance” of a company or a product, and can include things such as shape, color or design. Occasionally, if a product has been directly copied, your attorney can pursue an action (either using cease and desist letters or a lawsuit) alleging that the other party is infringing the trade dress of your product. It is important to remember; however, it is much easier to prevail if you have a formal patent than if you are alleging infringement of your trade dress.

Intellectual property can be among your company’s most valuable assets. Although it may seem like a daunting task to protect and enforce your patents and trademarks, the benefits of doing so are immense. Protection and enforcement of your intellectual property can carve out a large market share for your products and reduce your competition. Also, by enforcing your intellectual property, you may set yourself up for a licensing agreement that can generate additional revenue for your company. Because of the many factors that should be considered when protecting and enforcing your intellectual property, it is always a good idea to speak to your lawyer before taking any action.

About the Author

Joseph Teleoglou is an associate at Snell & Wilmer in their Orange County, California, office. He focuses his practice on intellectual property and has experience preparing and prosecuting patent applications (both U.S. and foreign) in a variety of industries. He may be reached at jteleoglou@swlaw.com or (714) 427-7511.



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