What should I do first when I receive a patent demand letter?

Do not respond to the letter yet. Do not contact the sender, acknowledge receipt, or make any admissions. Immediately preserve all documents and communications related to the accused product or process. Then engage a patent litigation attorney before taking any other action. Your response to a patent demand letter — or your silence — can have significant legal consequences, and an attorney needs to evaluate your position before you commit to anything in writing.

Does a patent demand letter mean I will be sued?

Not necessarily. Many patent demand letters are sent by patent assertion entities (PAEs, often called patent trolls) who send hundreds of similar letters hoping for quick settlements. Demand letters frequently overstate the strength of the asserted patent or the breadth of the claims. Many demands never result in litigation — especially when the recipient demonstrates willingness to fight. However, some demand letters are legitimate and come from direct competitors with strong patents. An attorney can assess the credibility of the threat.

What defenses do I have against a patent infringement claim?

The main defenses to patent infringement are: (1) Non-infringement — your product does not actually practice every element of the asserted claim; (2) Invalidity — the patent is invalid because the claims are anticipated by prior art (§ 102), obvious (§ 103), lack written description (§ 112), or cover ineligible subject matter (§ 101); (3) License — you have an express or implied license to practice the patent; (4) Patent exhaustion — the patent owner's authorized sale of a product exhausted their rights; (5) Laches or equitable estoppel — the patent owner unreasonably delayed in asserting the claim. Most successful defenses combine non-infringement and invalidity arguments.

How much does patent litigation cost?

Patent litigation is extraordinarily expensive. According to AIPLA surveys, defending a patent infringement case through trial typically costs $2.5–5 million per side when the amount at stake is $25M+, and $1–2.5 million for smaller matters. Even early-stage defenses (pre-Markman) typically cost $500,000–1 million. For smaller defendants facing aggressive PAEs, the cost of defense often exceeds any reasonable settlement demand — which is precisely the leverage NPEs exploit. Inter partes review (IPR) at the USPTO costs approximately $35,000–100,000 and can be a more cost-effective way to challenge patent validity.

For Founders & Businesses

I Received a Patent Threat. What Do I Do?

Name: PatentBrief
Address: Phoenix, AZ, US
Price range: Free

If you just received a letter

Do not respond. Do not contact the sender. Engage a patent litigation attorney before any communication. Then read this guide.

A patent demand letter is scary. It is usually not the end. Many are sent speculatively, many patents are invalid, and most situations resolve without litigation. Here is exactly what to do, step by step.

Educational guide only — not legal advice. Patent infringement is a serious legal matter. Engage a registered patent attorney for your situation.

Urgent

Do not respond to the letter

This is the most important step. Do not email back, call the sender, write a response, acknowledge receipt in writing, or make any statement about the accused product. Everything you say or write can be used in subsequent litigation. Even an innocent response confirming you received the letter and are looking into it can constitute notice of the patent — which matters for willful infringement damages calculations.

Note — The silence clock: there is generally no legal deadline to respond to a demand letter. You have time to engage an attorney before any response.

Urgent

Preserve all relevant documents immediately

Issue a litigation hold immediately. Instruct everyone who may have documents relevant to the accused product — engineers, product managers, founders, legal — not to delete emails, code commits, Slack messages, design files, or any other documents. Document destruction after receiving a patent threat can constitute spoliation and be used against you in subsequent litigation.

Note — Preserve: (a) all versions of the accused product and its development history; (b) all communications about the accused product; (c) any prior art you are aware of that predates the patent filing; (d) sales and revenue data for the accused product.

Urgent

Get a patent litigation attorney before doing anything else

Patent litigation is a specialized practice. A patent attorney who drafts patents is not the same as a patent litigator who defends them. Ask your startup counsel, investors, or board for referrals to patent litigation counsel. Most patent litigators offer a free initial consultation to assess the situation. The cost of a short attorney engagement to evaluate the demand is almost always worth it.

Note — Even if you ultimately decide to settle or negotiate, you need an attorney involved from the first response. Settlement negotiated by counsel is more favorable and better protected than direct negotiation.

Analyze who sent the letter and why

Once you have counsel, understand the nature of the threat. Is the sender a direct competitor? A patent assertion entity (PAE/troll)? An individual inventor? The strategy differs significantly. PAEs often send hundreds of identical demand letters with low settlement asks (below the cost of defense). Direct competitors may have stronger incentives to litigate. Individual inventors may be more open to licensing on reasonable terms. Your attorney can help identify the sender's litigation history and typical behavior patterns.

Assess your non-infringement position

Does your product actually practice every element of the asserted claim? Patent infringement requires that the accused product or process meet every single limitation of at least one claim. If your product is missing even one element, you do not infringe. Compare the asserted claims (usually specified in the demand letter, or find them in the patent) against your product feature by feature. This analysis is called a 'claim chart' and your attorney will prepare one.

Note — Read the broadest independent claim first. If your product doesn't practice that claim, read the dependent claims. Focus on what the claim actually says, not what the patent's title or abstract implies it covers.

Investigate the patent's validity

Even if you infringe, the patent may be invalid. Prior art that predates the patent's filing date and discloses the same invention can anticipate the claims (§ 102). Prior art showing the claims were obvious can invalidate under § 103. Software patents are frequently vulnerable to § 101 (Alice) challenges. Your attorney will conduct an invalidity search. Strong invalidity evidence significantly strengthens your negotiating position.

Note — Prior art sources to check: Google Patents, IEEE Xplore, ACM Digital Library, open-source code repositories (GitHub commits with dates), academic papers, product launches, trade show presentations, and your own earlier work.

Consider inter partes review (IPR) as an alternative to litigation

IPR is a USPTO proceeding that allows any third party to challenge the validity of an issued patent based on prior art. IPR costs approximately $35,000–100,000 in attorney fees plus USPTO fees — a fraction of full litigation. The PTAB grants institution of roughly 60–70% of IPR petitions. IPR must be filed within one year of being served with a complaint alleging infringement. IPR success rates for petitioners are high: the PTAB cancels or amends a significant portion of challenged claims.

Note — IPR is most powerful when you have strong prior-art evidence. It shifts the patent's validity examination out of federal court (where the validity presumption is strong) to the PTAB (where the standard is preponderance of evidence, making invalidity much easier to prove).

Understand your realistic range of outcomes

The spectrum of outcomes, from least to most expensive: (1) ignore / walk away — the PAE stops pursuing you (common with weak threats against small targets); (2) license — negotiate a royalty agreement; (3) settlement — pay a lump sum to resolve all claims; (4) design around — redesign your product to avoid the claims; (5) litigation with invalidity/non-infringement defense — most expensive but sometimes necessary for a direct competitor attack; (6) IPR — challenge validity at the PTAB. Your attorney will help you assess which path fits your situation, budget, and business goals.

Key principle

Receiving a demand letter is not the same as losing a lawsuit. Many patents are invalid. Many products don't actually infringe. Many threats evaporate when met with a professional, informed response. The worst outcome is usually a panicked settlement before understanding your actual position.

Patent infringement explained →Inter partes review (IPR) →How patent litigation works →Common patent myths →