Getting an issued patent is a big accomplishment for a startup or small business.
Just about this time when you start to see success, you may find out that someone is ripping off your product. Now what? How do you stop them?
Getting ripped off
Getting an issued patent is a big accomplishment for a startup or small business. The issued patent represents a lot of time and money. It is rewarding to know that as your business is starting to make money and grow that it is protected. Just about this time when you start to see success, you may find out that someone is ripping off your product. Now what? How do you stop them?
Before you take the nuclear option and file a lawsuit, the first step is to send the competitor a cease and desist letter demanding that the competitor stop ripping off your product, cease all sales, and pay you at least a portion of their sales of the product. Depending on the situation, the cease and desist letter can be a great option.
If the competitor is unaware that they were ripping you off or do not have the ability to fight you, the letter may get them to stop. However, if the cease and desist letter does not work, what are your options? Typically you have two options.
The first option is to file a lawsuit and to enforce your patent in court. This can be a good option to get a court ruling to get the competitor to stop selling the ripped off version of your product. Usually, the lawsuit does not go all the way through the courts and the lawsuit can be settled out of court. However, lawsuits can be expensive. Even if you win, you may face large attorney’s fees, months or years of disruption to your business, and a lot of time spent in court rather than doing what you love.
The other option startups and small businesses have when the cease and desist letter does not work is to approach a larger competitor in the business. For example, let’s say you are a small player in a big industry, but you have a really innovative patented product. The knockoff company may feel that they can get away with pushing you around, but if you sell or license your patent to a larger competitor who may be interested in acquiring it, then two things happen.
You will get a payday for a product that is already be knocked off, and you may not be able to protect yourself.
If a licensing deal is reached, the bigger company will enforce your patent, stop the knockoffs, and you have now established a new relationship with a leader in your industry. This is also a win for the bigger company because they have a new feature for their product and they can have another weapon to fight off their competitors.
While finding out that someone is knocking off your product is never an enjoyable experience, look at all your options to figure out how to turn this into a favorable outcome.