Prelitigation Hardball

Abstract:     
In situations where some parties infringe intellectual property (IP) rights only if others do, the former can be thought of as secondary and the latter as primary infringers. This comment considers situations where threats directed to parties such as purchasers of allegedly infringing goods, despite being strategically advantageous to IP owners, can be unfair.

All parties, of course, wish to know of potential liability. Primary infringers obligated to evaluate threats suffer no more than than the expense and annoyance of litigation. But the stakes are raised when threats are aimed at purchasers who lack incentives, for example, to conduct independent inquiries or to credit suppliers' assurances of noninfringement. The potential for unfairness is exacerbated because primary infringers, even when they prevail, are unlikely to recover for lost sales.

This comment, building on an earlier one by the senior author, suggests, for example, that district courts need to better document harm generated by false implications in literally true statements. It also suggests that the Federal Circuit should be more willing to halt practices that may confer the sort of leverage eschewed in eBay.

The paper has been published with few changes in the online Germeshausen Newsletter.

Number of Pages in PDF File: 5

Keywords: patent litigation, rights to petition, commercial speech, secondary infringers

JEL Classification: K10, K20, K41

working papers series