Sun Tzu, in his renowned work “Art of War” said, that “[t]o fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking down the enemy's resistance without fighting.”
Pyrrhus of Epirus, a Greek king who was undone by his costly (yet victorious) battles against the Romans, is quoted to have muttered “if we are victorious in one more battle with the Romans, we shall be utterly ruined” hence the phrase “pyrrhic” victory.
In a world dealing with the impact of a devasting pandemic and global recession, risk mitigation has become more important than ever. Futile “pyrrhic” victories are to be avoided – costly successful battles in the courtroom may ultimately lead to a loss of the “war” against the competitor.
By taking calculated pre-emptive steps, you will not only maximise your (patented) product's market exclusivity, you will also increase your chances of success in future patent litigation and avoid dealing with the consequences of “pyrrhic” victories.
A fundamental first step in mitigating risk and reaching “supreme excellence” in patent litigation, is obtaining insight into your competitors' activities. This may include monitoring their local and foreign regulatory activity and patent activity (such as applications in local and foreign jurisdictions being filed and prosecuted by competitors). Tell-tall signs may also include challenges to your patents in foreign jurisdictions. By monitoring, at least, these aforementioned activities, there is the possibility of anticipating a patent infringement or invalidity litigation. Anticipation provides sufficient time for responsive and strategic tactics – such as obtaining opinion(s) from your patent attorney on the validity of your patents, administrative integrity of your patents, and generally improving your product(s) or marketing ahead of a competitor's launch.
Once the fundamental first step has been taken and patent litigation is anticipated, there are crucial investigations required to adequately prepare for litigation and improve the administrative integrity of your patents. By following the below steps, your chances of success in the anticipated patent litigation can but only increase.
- Determine and review the ownership of the patent to ensure locus standi (standing) to assert patents. This involves determining who may possibly suffer damages should the competitor's product launch; who are the licensees (and should they be party to the anticipated litigation), distributors, possible transfer of ownership and most importantly attending to the recordal of these transactions, alternatively events, against the patent in question. Note that in South Africa any event affecting the right, title and interest to a patent has to be recorded against the patent within six months of the event (extension of time may be requested from the Registrar of Patents);
- Identify key persons who will be involved in the litigation, such as inventors, in-house prosecutors or the prosecuting attorney, possible deponents, and external expert witnesses;
- Collate all relevant documents which will be necessary during the course of the anticipated litigation, albeit for purposes of preparation, discovery or other pre-trial processes;
- Evaluate the patent - obtain and consider prior art; prosecution history of the patent (in all jurisdictions); possible interpretations of the patent; prepare a strategy for possible invalidity actions which may be brought against the patent; file amendments to the “questionable” claims to strengthen validity, and enforcement, of the patent; and utilise the insight gained from parallel proceedings to prepare for the enforcement of the patent; and
- Identify and evaluate the commercial importance and monetary value (past and future) of the product(s) covered by the patent. This is relevant not only with regards to a potential damages' claim against an infringing party but will also determine whether or not settlement should be the principal focus.
The importance of taking the steps outlined at an early stage, and well in advance of litigation, cannot be emphasised enough. The ability to move swiftly with crucial patent enforcement proceedings could be substantially inhibited if your house is not in order. However, if the administrative integrity of the patent is robust, you will be in a relatively stronger position to enforce the patent, not only for instituting a claim for infringement, (urgent) interim interdict (preliminary injunction) proceedings, and/or defending a claim of invalidity, but you also provide yourself with more leverage, thus strengthening your position in settlement negotiations.
Monetising your patent can be achieved in a risk and cost mitigating era by being proactive and closely working with your patent litigation attorney to ensure that should litigation become a reality, you are armed with knowledge and embracing the centuries old adage of “supreme excellence” – albeit in the courtroom or the boardroom during settlement negotiations. To avoid pyrrhic victories, and in some cases litigation altogether, ensure proper housekeeping of patent portfolios across all jurisdictions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
