Your competitor's new product just came out and is said to be "patent-pending." Or, you've just discovered a competitor's pending patent application, for instance, by finding it online or by being told by your competitor. What does this mean, and what can you do about it?
Your competitor's pending patent application represents a risk that should be managed. The fact that your competitor has filed a patent application means that it is seeking to get a patent, which would give it a right to exclude you and others from commercializing products covered by the patent for a certain period of time (i.e., about 20 years). In other words, your competitor is trying to get a limited monopoly on a particular product.
A patent application is not a patent. At least, not yet. Your competitor therefore does not yet have the exclusive right or limited monopoly it is seeking to obtain with its patent application. Consequently, your competitor cannot sue for patent infringement based on its patent application.
However, since it might (and statistically is likely to) eventually mature into a patent, your competitor's patent application represents a risk that should be understood and dealt with as soon as possible to avoid potential problems in the future, if it actually becomes a patent. This may help to prevent getting into a situation where you have invested in developing a product that infringes your competitor's eventual patent. Also, while your competitor will obtain its exclusive right or limited monopoly only if and when a patent is actually granted, your competitor could be entitled in some cases to a reasonable compensation for any of your products that would have infringed its patent between the publication of the patent application and the grant of the patent.
It is therefore important to address the risk represented by your competitor's pending patent application. Examples of certain steps that can be taken in this regard are discussed below. Professional advice from your patent advisers can and normally should be obtained to assist you in this risk management approach. This is particularly true if you were informed of the existence of your competitor's patent application by your competitor itself or its legal counsel, since your response and behavior may have an impact on any eventual litigation that may ensue.
1. Identifying the patent application. Your competitor's patent application must first be clearly identified. If you already know a patent application number, this can be used to obtain a copy of the patent application. If, however, you are not aware of any patent application number (e.g., you are only aware of a "patent-pending" marking on your competitor's new product), a search can be conducted to find your competitor's patent application. The search can be based on your competitor's name, the name of an employee of your competitor who is likely an inventor, keywords likely to be used in describing the product, etc.
Once your competitor's patent application is identified, a verification can be conducted to see whether your competitor filed related patent applications in the same country and/or in other countries in order to get a more complete view of what and where your competitor is seeking to patent its product.
2. Assessing the relevance of the patent application to your business. Your competitor's patent application should be studied to assess its relevance to your commercial activities. In particular, the patent application should be carefully read to see if what it describes and claims actually covers any of your current products or could cover any upcoming products you are working on or considering developing.
The claims of the patent application (i.e., those numbered sentences or clauses at the end of the patent application) define the scope of patent coverage (i.e., the limited monopoly) sought by your competitor. In other words, the technical description and the drawings of the patent application do not define the scope of exclusivity that your competitor is trying to get; in fact, the scope of legal rights sought to be obtained is probably broader and more encompassing than what is shown in the drawings or described in the technical description of the patent application.
The claims of the patent application must therefore be compared to your products to see whether any one of these claims covers any one of your products. While this analysis can be relatively complex given how patents are written, it should be done thoroughly to ensure that the correct conclusions are drawn. If one or more claims of the patent application clearly cover or could possibly cover any of your products, the patent application should be considered very relevant to your business and certain actions should be taken to deal with it.
When reading the patent application, it is also useful to keep in mind what other aspects of the product that are described or shown in the patent application your competitor may eventually seek to patent. This can be another indicator of the relevance of your competitor's patent application to your business. Generally speaking, unless your competitor's patent application pertains to something significantly different than what you are currently doing or could ever envisage doing in the future, it is unlikely that the patent application can be discarded as being totally irrelevant to your business.
If more than one pending patent application belonging to your competitor has been identified, each must be considered individually.
3. Monitoring the patent application. A periodic verification of Patent Office records can be conducted to monitor the evolution of your competitor's pending patent application. This can track the status of the patent application and reveal how the scope of patent coverage sought by your competitor may change during the patent examination process.
Since the examination of pending patent applications typically evolves in an unpredictable manner, it is difficult if not impossible to predict, based on a snapshot analysis of your competitor's patent application, whether or not any ensuing patent will actually be problematic. Indeed, the claims appearing in the patent application are normally those submitted by your competitor at the time the application was filed. These claims reflect the scope of patent protection sought by your competitor, not the scope of patent protection that will actually be granted by the Patent Office, if any. The claims of your competitor's patent application may (and are likely to) change during the course of the Patent Office's examination of the patent application. It is only if and when a patent is actually granted that the scope of patent rights becomes clear.
Monitoring your competitor's patent application by periodically checking its status and how it changes can help to deal with the unpredictability of the patent examination process.
4. Designing around to avoid potential problems. In some situations, to avoid problems in the future, you may consider modifying your product if there is a strong likelihood that your competitor's pending patent application will mature into a patent that would cover your product if unmodified. For example, this may be the case if you are early in the development of your product and it is easy to make a modification that would clearly "design around" your competitor's eventual patent.
5. Preparing to challenge the validity of any eventual patent. It may be useful to prepare to challenge the validity of any patent your competitor may obtain based on its pending patent application. This can be done, for instance, by establishing that what your competitor is seeking to patent is "prior art," i.e., was previously known or used by others before your competitor filed its patent application.
For example, if you are aware of prior products (your own or others' products) that were previously commercialized, presented at tradeshows or otherwise made public and that correspond to what your competitor is seeking to patent, it would be useful to prepare a proof of this (e.g., dated pictures, brochures, technical manuals or other documentation). As another example, a search can be performed in an attempt to uncover prior patents, journals, magazines, websites or other publications that describe what your competitor is seeking to patent.
The uncovered prior art can be assessed to evaluate the likelihood that it could invalidate your competitor's eventual patent. If a strong invalidity argument exists (i.e., there is a "smoking gun"), the uncovered prior art can be used to attack the validity of a patent your competitor may obtain based on its patent application. For instance, it may be possible to intervene at the Patent Office during examination of the patent application before a patent is definitively granted. Alternatively, the uncovered prior art could be kept as ammunition to attack the validity of the patent after it is granted if your competitor takes legal action. Both approaches have advantages and disadvantages that should be carefully considered before deciding what to do.
The risk represented by your competitor's pending patent application should therefore be considered as soon as possible upon learning of its existence in order to avoid potential problems if and when the patent application becomes an issued patent.
The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.