What if we are sued or threatened with litigation?

Intellectual property litigation is unique. The cost, increased potential for early injunctive relief, prospect of litigating the case in a far-away forum, and the demand for large damage awards make it imperative for a company to develop a successful response strategy at an early stage.

When a lawsuit has only been threatened, a company should consider the following:

• Does your company have insurance that might cover the costs of defense?
• In what jurisdictions might the threatened lawsuit be brought?
• Should a declaratory judgment action be filed to secure a more convenient forum?
• Does the potential plaintiff have the financial resources to prosecute an intellectual property infringement action?
• Are there any intellectual property rights owned by your company that might be asserted against the potential plaintiff?

When the lawsuit has already been filed, time becomes even more critical. Your company should immediately contact experienced intellectual property litigation counsel to discuss the following issues:

• Where was the complaint filed?
• Can the lawsuit be transferred to a more convenient forum?
• Does the Court have personal jurisdiction over your company?
• Is the plaintiff seeking immediate injunctive relief?
• Is the plaintiff seeking damages?
• Is the accused product or trademark critical to your company's success?
• What is known about the plaintiff?
• Are there any other defendants named in the lawsuit?
• Are there any counterclaims (breach of contract, antitrust, counter-infringement) your company can assert?

After the initial time crunch, the decision-makers must take the time to formulate a litigation strategy that will best meet your company's unique needs. Consideration of the following issues will help determine the most appropriate response:

• What is the potential plaintiff's motivation or goal in filing the lawsuit?
• Is a negotiated settlement likely given the plaintiff's apparent litigation objectives?
• Are there changes that can be made to the accused product or trademark that reduce the risk of infringement?
• Are there former employees who have critical information regarding the plaintiff's allegations?

Based on the answer to these and other questions, trial counsel can help your company develop a litigation strategy focused on obtaining the best outcome in the most efficient manner possible.