5 Tips That Can Help Your Business Avoid IP Infringement Lawsuits

Several organisations today, wield IP infringement lawsuits for reasons beyond protecting their inventions and ideas.  Chief among these reasons are – to vanquish competitors, to win a large settlement from an industry behemoth, as a countersuit, etc.  Thus, intellectual property lawsuits have transformed courtrooms into raging battlefields over the years.

Moreover, with complex, ambiguous patent laws that aren’t always equitable across businesses of various scales and sectors, even if you do take utmost precautions and work with the highest integrity, you could still end up erring on the wrong side of IP law, costing your business a crippling lawsuit that it may never be able to recover from! Sounds too dire to be true? Trust us, it’s not!

So, what are the five most fail-proof ways you could avoid the catastrophe of being sued for IP infringement? Read on to know:

1. Create a stringent contract with your agency/ freelancers

Businesses often outsource creative and technical activities that aren’t a part of their core competency to external agencies or freelancers. Such activities include graphic design, content creation, marketing, and coding.

In the absence of watertight contracts with your vendors, which explicitly transfer the rights of their works created for your business to you, the vendor(s) can register those works and sue for copyright infringement, if you reproduce/publish those works without their written consent.

So, do ensure that such a contract is in place if you choose to outsource any business activity.

2. Establish standard operating procedures when onboarding a new employee to avoid IP pitfalls

Interestingly, one of the most common sources of IP violations are the new employees that a company onboards. Especially ones that have previously worked for a competitor. Such employees may be privy to the trade secrets of their former employer, which they could potentially deploy in their new organization (your business). If their former employer gets wind of this violation, it could leave you vulnerable to a lawsuit that could not just damage, but paralyse your entire business.

Hence, it’s a sound practice to get a written declaration from the employee as part of the onboarding process that he/she is not in possession of any entity’s intellectual property, which he/she could unfairly use in your business.

You should also create a clause in their offer letter/ contract that prohibits them from disclosing any trade secret or confidential information of a former employer or third party to you. Such information may include customer and vendor lists, best practices, secret processes, recipes, etc.

3. Conduct rigorous due diligence on existing trademarks before taking branding decisions

Whether you’re launching a new brand from scratch or a new offering under an existing umbrella brand, do ensure that you’ve conducted an exhaustive background check before coming up with the name, logo, and other branding material for your next big thing.

This sort of intellectual property comes under the purview of trademarks, so you have to conduct a comprehensive trademarks search that not only checks for exact matches but also the following:

  • Similarity concerning appearance, sound, connotation and commercial impression
  • Similarity concerning the offerings as described in an application or in connection with a prior mark
  • Similarity of trade channels
  • The terms and conditions and buyers to whom sales are made, i.e. impulse buys vs. premeditated purchases
  • The quantity and type of similar marks deployed on similar goods
  • A valid consent agreement between the applicant and the owner of the previously registered mark
  • Evidence of actual confusion

If at any point, you’re not sure as to whether your chosen brand name/logo/artwork can be confused with that of a competing brand, despite conducting a thorough trademark search, it’s a wise idea to consult a lawyer or IP firm to help you make that crucial decision. 

The cost of a painstaking due diligence process, including hiring a professional, is minuscule compared to that of an impending lawsuit or being compelled to change all your marketing collaterals.

4. Take pre-emptive measures

If you’re the inventor of an innovative new product that could be a game-changer in your industry, firstly ensure that prior patents do not protect the technologies/concepts you used to create the product or a similar product itself is not patented. Since this search can be extremely daunting and time-consuming to conduct on your own, you could outsource it to a reputable IP research provider.

If the road ahead is clear, it makes sense to take a cue from Apple and patent not just your end product but even the ideas, concepts, processes, and technology behind the end product for all-round protection. Essentially, file a patent for every aspect of the invention that you think can be patented.

This pre-emptive action will ensure that another competing firm cannot copy your ideas and then patent them, or worse, file a lawsuit against you post patenting them.

If unfortunately, a firm has already patented technologies or concepts used by you to create your product, you can avail the services of a patent lawyer to negotiate with the firm, instead of risking an IP lawsuit from their end by skipping this step and straight away launching your product.

5. Ask the Experts

If you’re not sure whether a business decision, no matter how big or small, could constitute an IP infringement, it is wise to avail the services of an expert instead of risking a lawsuit that could destroy your business. You can consult a patent lawyer or even an end-to-end IP solutions firm for a more holistic opinion. This may not be as expensive or as complicated as you think. With the evolution that this field has seen in recent years, several IP solution providers (both domestic and overseas), offer cutting-edge services at extremely reasonable pricing – saving your firm from a potentially disastrous IP lawsuit. 

Being faced with an IP infringement lawsuit could have grave repercussions for your business. And even if you do manage to win the case, the humongous legal expenses and hassles itself can cause your business, even if it’s a successful and well-established one, to collapse. So, prevention is key in warding off this legal landmine.

-The Editorial Team

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