Patent Litigation · Defense Strategy
Patent Infringement Defense
You received a demand letter — or a summons. Here is what those accused of patent infringement actually do: the defenses that work, the first moves that matter, and the cost reality of going through trial vs. settling.
First Steps
What to do in the first 72 hours
Do not respond to the demand letter immediately
A demand letter is a negotiating opening, not a court filing. You generally have time to respond thoughtfully — rushing can undermine your position. However, note whether the letter includes a deadline. If the letter says 'respond within 30 days or we will file suit,' that deadline affects your strategy. Consult patent litigation counsel before sending any response.
Issue a litigation hold immediately
Even before litigation is filed, once you receive a demand letter, you have a duty to preserve potentially relevant documents. Issue an internal litigation hold notice to your engineering, product, legal, and finance teams to stop routine deletion of emails, source code repositories, product development files, and any documents related to the accused product. Failure to preserve evidence can result in spoliation sanctions — an independent source of legal liability.
Evaluate the claim and the patent
Obtain the patent(s) from the USPTO (free at patents.google.com or the USPTO Patent Public Search tool). Read the asserted claims carefully. Understand which specific claims are asserted and what each claim limitation requires. The patent's prosecution history (file wrapper) — the record of the examination at the USPTO — is publicly available and can reveal prior art considered, limitations added by amendment, and arguments made by the applicant that narrow claim scope.
Engage qualified patent litigation counsel
Patent infringement defense requires a registered patent attorney with litigation experience, not just any IP attorney. Look for counsel with experience in your technology area. The case will likely require at least a freedom-to-operate assessment, claim construction analysis, prior art search, and potentially IPR petition preparation. Establish attorney-client privilege from your first communication.
Assess litigation finance and insurance
If you have patent litigation insurance (first-party or third-party), notify your insurer immediately — late notice can void coverage. If you do not have insurance and the case is meritorious from a defense perspective, litigation finance firms provide funding for defendants in some circumstances. Also assess whether your indemnification obligations under commercial agreements require you to notify any upstream suppliers or downstream customers.
Non-Infringement Defenses
Your product does not infringe — here is why
Claim element missing from accused product
Under the all-elements rule, a product or method infringes a patent claim only if it includes every limitation of that claim. If your product lacks even one limitation, it does not literally infringe. Claim construction — the legal interpretation of each claim term — is often the key battleground. If a disputed term is construed narrowly (e.g., requiring a specific physical configuration you don't have), the claim will not read on your product.
Doctrine of equivalents not met
Even if a claim element is missing literally, a patent owner may argue infringement under the doctrine of equivalents (DOE) — that your product performs substantially the same function in substantially the same way to achieve substantially the same result as the patented element. DOE arguments are constrained by prosecution history estoppel (Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., S.Ct. 2002): if the claim was narrowed by amendment during prosecution, equivalents within the surrendered territory are presumptively barred.
Method claim — not all steps performed by one party
Method claims require that all steps be performed by a single party (or by parties acting under that party's direction or control, per Akamai Technologies v. Limelight Networks, Fed. Cir. en banc 2012). If the patent claims a method with multiple steps that are divided between your company and your customers independently, there may be no single-party infringement. Joint infringement liability requires one party to direct or control the other's performance.
Licensed (implied or express)
An express license agreement with the patent holder or its predecessors-in-interest bars infringement claims for licensed conduct. An implied license can arise from course of dealing, a covenant not to sue, or from the exhaustion doctrine: if you purchased a product from the patent holder (or an authorized licensee), patent exhaustion under Impression Products v. Lexmark International (S.Ct. 2017) prevents the patent holder from asserting the patent against your further use of that item.
Invalidity Defenses
Six grounds to challenge the patent itself
§ 101 — Patent-ineligible subject matter
Under Alice Corp. v. CLS Bank International (S.Ct. 2014) and Mayo Collaborative Services v. Prometheus Laboratories (S.Ct. 2012), claims directed to abstract ideas, laws of nature, or natural phenomena without an inventive concept are patent-ineligible. This is a powerful defense for software, fintech, and diagnostic patents. § 101 can be raised at any stage — including a motion to dismiss, summary judgment, or at trial — and does not require expensive prior art searches.
§ 102 — Anticipation by prior art
A patent claim is invalid if a single prior art reference (patent, publication, public use, sale, or public disclosure) disclosed every element of the claim before the asserted patent's priority date. Anticipation requires that the prior art expressly or inherently discloses each element. Prior art includes: patents and patent publications; journal articles; conference proceedings; public uses; and products sold or offered for sale before the critical date.
§ 103 — Obviousness
A patent claim is invalid if the differences between the claimed invention and the prior art would have been obvious to a person having ordinary skill in the art (POSITA) at the time of the invention. Obviousness can be proven by combining multiple prior art references. The KSR International v. Teleflex (S.Ct. 2007) flexible standard allows hindsight-protected combinations of known elements with known methods for known purposes. Secondary considerations (commercial success, long-felt need, industry praise, failure by others) can rebut prima facie obviousness.
§ 112(a) — Enablement and written description failures
A patent claim is invalid if the specification does not enable a POSITA to make and use the full scope of the claimed invention without undue experimentation (enablement), or does not show that the inventor possessed the claimed invention at the time of filing (written description). After Amgen Inc. v. Sanofi (S.Ct. 2023), broad functional genus claims that cover more than the specification enables are vulnerable — a claim covering all antibodies that perform a function, where only a few specific antibodies are disclosed, fails enablement.
§ 112(b) — Indefiniteness
A patent claim is invalid if it fails to particularly point out and distinctly claim the invention — meaning that a POSITA reading the claim in light of the specification and prosecution history would not understand the claim's scope with reasonable certainty (Nautilus v. Biosig Instruments, S.Ct. 2014). Means-plus-function claims under § 112(f) that lack adequate corresponding structure in the specification are invalid for indefiniteness — a common vulnerability in software patents using nonce words like 'module,' 'unit,' or 'mechanism.'
Double patenting
Statutory double patenting bars two patents with the same claims. Obviousness-type double patenting (ODP) bars claims in a later patent that are obvious variants of claims in an earlier patent by the same inventive entity or assignee — unless a terminal disclaimer has been filed, which dedicates the extended term of the later patent and requires common ownership. ODP is a powerful defense when the patentee has a large family of related patents where later-expiring patents have obvious variations on earlier claims.
Equitable Defenses
When the patent is valid but unenforceable or exhausted
Patent exhaustion
When a patent holder (or its licensee) makes an authorized sale of a product, the patent rights in that product are exhausted. The patent holder cannot use patent law to control what the purchaser does with the item after an authorized sale. Impression Products v. Lexmark International (S.Ct. 2017) confirmed this rule applies even to sales with explicit post-sale restrictions — those must be enforced through contract, not patent law.
Inequitable conduct
A patent is unenforceable (not just invalid) if the patent applicant engaged in inequitable conduct before the USPTO — specifically, if a person involved in prosecution withheld material information or made material misrepresentations with specific intent to deceive the USPTO. Therasense, Inc. v. Becton, Dickinson & Co. (Fed. Cir. en banc 2011) set the current standard: materiality requires 'but-for' materiality (the USPTO would not have allowed the claim but for the misconduct), and specific intent must be proven directly or by inference. Inequitable conduct is difficult to prove and is described as the 'atomic bomb' of patent law — it renders the entire patent unenforceable, not just individual claims.
Patent laches
Laches is an equitable defense that may limit the damages period if the patent holder delayed unreasonably in filing suit and that delay prejudiced the accused infringer. After SCA Hygiene Products v. First Quality Baby Products (S.Ct. 2017), laches does not bar damages within the six-year statutory damages period under 35 U.S.C. § 286, but it can still limit pre-suit damages and may be relevant to injunctive relief in some circumstances.
Prosecution history estoppel
Arguments made or amendments made during patent prosecution to overcome rejections can limit the scope of what the patent holder can claim via the doctrine of equivalents. If the applicant argued that the invention differs from prior art in a specific way, the patent holder is estopped from claiming equivalents that would cover the territory surrendered by that argument or amendment.
PTAB Challenge
IPR and other post-grant proceedings as defense tools
IPR (Inter Partes Review) at the PTAB
An IPR petition filed with the USPTO's Patent Trial and Appeal Board (PTAB) challenges a patent's claims on § 102 (anticipation) and § 103 (obviousness) grounds, using only patents and printed publications as prior art. If instituted, the PTAB conducts a full adversarial trial. IPR uses a preponderance-of-evidence standard (lower burden than district court's clear-and-convincing standard). Cost: $50,000–$200,000 for the petition + trial. Time: institution decision within 6 months; final written decision within 12 months of institution. CRITICAL: a petition must generally be filed within 1 year of being served with a complaint alleging infringement of the patent.
PGR (Post-Grant Review) — broad grounds within 9 months of grant
Available only for first-inventor-to-file (AIA) patents within 9 months of grant. PGR allows any invalidity ground — including § 101, § 112, and public-use prior art — not just §§ 102/103 from printed publications. The 9-month window typically closes before litigation begins for most defendants.
IPR as a litigation strategy
Filing an IPR does not automatically stay district court litigation, but courts frequently grant stays pending IPR completion. An IPR institution decision strengthens a stay motion significantly. Defendants often file IPRs early to create settlement leverage, attack patent validity through PTAB's more favorable standard, and put pressure on the patent holder. However, IPR estoppel bars the petitioner from later raising in district court any ground raised (or that could have been raised) in the IPR.
Ex parte reexamination
Ex parte reexamination (EPRx) can be requested by anyone (including anonymously) based on patents and printed publications presenting a substantial new question of patentability. No estoppel applies to the requester — a major advantage over IPR. However, the requester cannot participate after filing. Takes 2–4 years but can be used without triggering IPR's 1-year deadline. Useful when you have strong prior art but are outside the 1-year IPR window.
Cost Reality
What patent defense actually costs
Demand letter response
$5K–$30K
Attorney review + response or settlement
Early § 101 motion
$20K–$80K
Motion to dismiss + opposition
IPR petition
$50K–$200K
Petition + trial through FWD
Claim construction (Markman)
$200K–$800K
Briefing + hearing + expert analysis
Summary judgment
$300K–$1.5M
Overlaps with Markman preparation
Full trial
$3M–$10M+
Rare; most cases settle before this stage
Approximately 90–95% of patent cases settle before trial. Settlement most commonly occurs after claim construction, after an IPR institution decision, or after dispositive motions narrow the issues. The best outcome for most defendants is a cost-efficient resolution — through settlement, IPR, or an early dispositive motion — rather than a full trial.
FAQ
Frequently asked questions
What should I do first when I receive a patent infringement demand letter?
When you receive a patent infringement demand letter, take these steps in order: (1) Do not panic and do not respond immediately — a demand letter is an opening negotiating move, not a court judgment. (2) Do not forward the letter throughout your organization or discuss it openly — this can inadvertently waive privilege and create additional documents discoverable in later litigation. (3) Issue a document retention/litigation hold immediately — once you receive a demand letter, you have a duty to preserve evidence. Tell your engineering, legal, product, and finance teams to stop routine deletion of any documents relating to the accused product. Failure to preserve evidence can result in adverse jury instructions or sanctions (spoliation). (4) Obtain the patent (from patents.google.com or the USPTO) and read the asserted claims. Understand what technology the patent purports to cover. (5) Do not contact the patent holder without counsel — anything you say can be used against you in litigation. (6) Engage qualified patent litigation counsel before making any response. The first substantive response to a demand letter is an important strategic decision — counsel will help you evaluate non-infringement, invalidity, and settlement options. (7) Check your insurance — if you have patent litigation insurance (first-party or third-party), notify your insurer immediately. Check your commercial agreements for indemnification obligations that might require you to notify upstream suppliers. Most demand letters do not result in litigation — many are sent by patent assertion entities (NPEs/patent trolls) seeking settlements rather than planning trials. The first response is the most important.
What are the main defenses to patent infringement?
The main defenses to patent infringement are: (1) Non-infringement: your product or method does not include every element of any asserted patent claim (all-elements rule). If even one claim limitation is absent from your product, there is no literal infringement. Claim construction — the legal meaning of each claim term — is often dispositive. Doctrine of equivalents (DOE) may be argued by the plaintiff, but is limited by prosecution history estoppel. (2) Invalidity: even a granted patent can be proven invalid by clear and convincing evidence in district court (or by preponderance in IPR/PTAB proceedings). Grounds: § 101 patent-ineligible subject matter (Alice/Mayo framework — powerful against software and diagnostic patents); § 102 anticipation (single prior art reference discloses every claim element); § 103 obviousness (combination of prior art references KSR); § 112 enablement/written description failure or indefiniteness; and double patenting. (3) License: express or implied license from the patent holder or its predecessors bars infringement claims. (4) Patent exhaustion: if you purchased the product from an authorized source, patent rights are exhausted (Impression Products v. Lexmark, S.Ct. 2017). (5) Inequitable conduct: unenforceable if the patent was obtained by material fraud on the USPTO with specific intent to deceive (Therasense, Fed. Cir. 2011) — renders the entire patent unenforceable. (6) Patent laches/prosecution laches. (7) Prior user rights (§ 273): for patents claiming methods or processes, a party who commercially practiced the claimed subject matter more than 1 year before the patent's effective filing date has a prior user right defense. Most patent defendants raise multiple defenses simultaneously — the goal is to find multiple paths to non-liability.
Should I file an IPR petition when sued for patent infringement?
Filing an Inter Partes Review (IPR) petition at the PTAB is often one of the first strategic decisions in patent litigation defense, and the answer depends on several factors. Arguments for filing an IPR: (1) The PTAB uses a preponderance of evidence standard — much lower than district court's clear-and-convincing standard for invalidity. Historically, approximately 60–80% of instituted IPR claims have been cancelled or amended. (2) Cost: an IPR typically costs $50,000–$200,000 total — far less than patent trial through verdict ($3–10M+). (3) A pending IPR often results in a litigation stay in district court, halting expensive discovery. (4) The PTAB's decision can be used in parallel to apply pressure toward settlement. Arguments against (or timing considerations): (1) IPR is limited to §§ 102/103 grounds using patents and printed publications — if your best invalidity defense is § 101 (Alice) or § 112, IPR won't help with those specific grounds. (2) IPR estoppel: once an IPR petition is filed, the petitioner is later barred from raising in district court any § 102/103 ground that was raised or could have been raised in the IPR — a significant risk if you file a weak IPR. (3) The 1-year deadline: you must file the IPR petition within 1 year of being served with a complaint alleging infringement of the patent. Missing this deadline (even by a day) permanently bars the accused infringer from filing an IPR on that patent. (4) If the patent is weak on § 101 grounds (Alice/Mayo), a motion to dismiss or early summary judgment may be faster and cheaper than IPR. Strategy: most defendants with a 1-year window evaluate whether the patent has §§ 102/103 invalidity risk using the PTAB process while simultaneously pressing § 101 and non-infringement in district court.
What is an opinion of counsel and do I need one?
An opinion of counsel is a formal written legal opinion from qualified patent counsel (typically a registered patent attorney with relevant technical background) analyzing a patent's validity, enforceability, and whether a specific product or method infringes it. It is typically used as a defense to willful infringement: under Halo Electronics v. Pulse Electronics (S.Ct. 2016), willful infringement supports treble enhanced damages. While an opinion of counsel is no longer required to avoid a willful infringement finding (Read Corp. v. Portec abandoned the old rule; Halo focused on 'wanton and malicious' behavior), obtaining a favorable opinion and relying on it in good faith remains powerful evidence that the defendant did not act with the deliberate and reckless disregard required for willfulness. Cost: $20,000–$100,000 for a thorough written opinion covering validity and non-infringement. Timing: opinions are most effective when obtained before the infringing conduct begins — a post-litigation opinion has much less weight. If your company is using technology that may be covered by an active patent you know about, getting a freedom-to-operate opinion is wise. If you have already received a demand letter, obtaining an opinion may not change the willfulness analysis for past conduct but can affect willfulness for ongoing conduct. Note: opinion of counsel and communications with litigation counsel are kept separately — waiving privilege over opinion counsel communications does not waive privilege over litigation counsel communications (In re Seagate Technology, Fed. Cir. 2007 framework remains instructive post-Halo).
What does it cost to defend a patent infringement lawsuit?
Defending a patent infringement lawsuit through trial is very expensive. According to AIPLA (American Intellectual Property Law Association) surveys, median patent litigation defense costs in the U.S. by amount at risk: cases where less than $1M is at risk: ~$700,000–$1.5M total defense cost. Cases with $1M–$25M at risk: ~$2.5M–$5M total defense cost. Cases with $25M+ at risk: $5M–$10M+, often exceeding $10M for complex technology matters. These costs cover: attorney fees (the dominant cost — patent litigation partners at major firms bill $600–$1,200+/hour); expert witnesses (technical and damages experts typically add $300,000–$1M+); e-discovery (often the largest single cost category for cases with significant electronic document production — can reach $1–3M alone); claim construction (Markman hearing); IPR petition filing and trial (if filed: $50,000–$200,000); and deposition costs. Most patent cases settle before trial — approximately 90–95% reach settlement. Typical settlements occur after claim construction (when both parties have better clarity on claim scope) or after IPR institution decisions. Settlement values vary enormously based on the technology, the damages theory, the validity of the patent, and the relative litigation leverage of each party. Cost management options: IPR as a lower-cost parallel track; letter agreement / covenant not to sue if the defendant has a strong non-infringement position; early § 101 motion to dismiss (low cost if successful); settlement in the demand letter phase (usually cheapest). For defendants without litigation insurance, patent litigation is frequently the most significant legal cost they will face.
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