IP enforcement: A strategic tool for corporations

An intellectual property enforcement strategy is essential for many businesses. However, IP registration and enforcement can be complex and expensive. As such, many small- and medium-sized businesses do not enforce IP. In this article, we explain why businesses should enforce their IP and how to get started.

The number of IP infringement lawsuits has more than doubled in recent decades, and brand owners without an IP enforcement strategy risk coming unstuck. In this article, we will look at the reasons why corporations are enforcing IP to benefit their business and why you should, too.

When does IP litigation benefit a business?

When protecting IP rights, a company must consider what it wants to achieve through litigation. In many cases, it will seek compensatory damages to offset litigation costs or recoup lost revenue; it may also want to deter competitors with time and cost expenses. Depending on the scale of the infringement, compensation can be lucrative. The potential costs to the party that does not own the patent/trademark may lead them to settle rather than endure the expense of a trial, even if they have a strong case.

Can you enforce IP internationally?

A company may register IP internationally to expand its business into specific regions or maintain a foothold in certain markets, since this hinders competitors from entering the market. However, enforcing IP in multiple regions requires in-depth knowledge of different regional-specific rights, application standards, enforcement procedures and the impact of other legal influences.

In such cases, a company should consult with IP experts in multi-jurisdictional litigation to ensure the effective assertion of ownership over an IP asset in different regions and tackle potential locale-specific enforcement issues. A business that foresees international expansion should also consider this when budgeting for potential IP services.

For international litigation, there are many considerations when deciding on the venue, such as the location of the IP registration, the favourability of local laws, ease of access to legal resources, local norms and procedures, and the potential extent of a favourable or unfavourable outcome. For example, a suit was brought against Sony, a Japan-based technology company, by WiLAN, a Canadian patent licensing firm in China, which has been a preferred litigation location for many companies in recent years. The main goal when selecting a litigation venue is to achieve a favourable outcome for your business, while ensuring the maximum amount of damage to your competitor.

How else can a business enforce IP?

There are many reasons to litigate IP enforcement. However, there are other potential options through alternative dispute resolution (ADR), i.e., without litigation. ADR solutions seek to resolve conflicts in a cost-effective manner that suits both parties. Depending on the adversity between the conflicting parties, they may choose to deal directly with each other (negotiation), negotiate through an intermediary (mediation) or present the case to a neutral third party who decides the outcome (arbitration). A case resolved through ADR remains private, since it does not take place in a court.

Depending on the conflict, two parties may choose to settle a dispute through mediation or arbitration. Mediation is an informal, confidential, and cost-effective process, as it usually only involves a neutral, experienced third party who mediates the negotiation of two conflicting parties. The resolution is usually amicable; however, litigation or arbitration is still possible if the outcome is not satisfactory. Arbitration is more formal, where the case is presented to a neutral third party or parties (arbitrators), and they will decide the outcome. In comparison with mediation, the outcome of an arbitration is more difficult to appeal.

There are many ways in which IP enforcement can benefit a business strategy. However, before a company decides to enforce IP, it is crucial to determine the best method to achieve the desired outcome. While litigation can be viewed as a profitable route to follow for a patent holder, many businesses find it advantageous to pursue ADR, since it can be speedier, more cost-effective, and the proceedings remain private.

If you need advice about enforcing IP or developing an IP strategy, contact our IP experts, and we can advise you on the best course of action for your business.