Inc. magazine writer Jeff Haden interviewed Alexander Poltorak for an extensive article on protecting intellectual property, whether by trade secrets or patents. Dr. Poltorak discusses what inventors and business owners can do to enforce their IP - and when it's time to call in the experts. In the snippet below, he speaks about the doctrines of laches and estoppel and how they can derail patent enforcement efforts. ("Best Way to Protect Your Brilliant Ideas" Inc.com - July 26, 2012)
Enforcing the Rules
Jeff: The burden of enforcement lies with the owner of the patent or trade secret. We can't call the "Patent Police." If I think someone is infringing on my IP, is there value to sending cease-and-desist letters? I know entrepreneurs who do that all the time when they feel other companies have infringed on their copyrights. One is the king of writing "Stop now or I will sue!" letters.
Alexander: Patent owners frequently come to us claiming infringement. They already wrote a bunch of letters telling people to cease and desist and threatening to sue. That didn't work and now they want to file a lawsuit.
Often we have to tell them it's too late due to the legal doctrines of laches and estoppel.
Laches comes into play when you sit on and don't enforce your rights. Say you have a patent you know has been infringed upon. For seven years you've done absolutely nothing... and then you finally decide to file a lawsuit.
The defendant says, "Wait - where have you been until now? You just sat on your patent. Clearly you didn't care." Plus, there are practical considerations: Employees that could have testified are gone, documents have been destroyed, memories have faded....
It's very likely the judge will grant the motion for laches and you will not be able to collect past damages. (You may still be able to collect future royalties, though.)
Or say you have a patent you know has been infringed upon and you send a letter and threaten to sue if the other party does not cease and desist. When you threaten to sue and fail to follow through you give the infringing party reason to believe you decided to release your rights.
Then, if years later you decide to sue, the judge could preclude you from recovering past damages and future royalties under the doctrine of estoppel.
Rule No. 1: Vigorously enforce your rights. If you have rights worth protecting, never sit on them.
Rule No. 2: Never bluff. Never threaten anyone with an infringement lawsuit unless you have the intention and wherewithal to follow through on that threat.