In the US, a patent holder who can prove willful patent infringement can obtain treble damages. This can put dollar signs in the eyes of plaintiffs so, to establish knowledge, patent holders often send letters notifying potential infringers of their patented claims. In turn, this presents a delicate tightrope for defendants to walk by forcing them to decide how, and if, to respond.
A common defense mechanism is to file away any accusation and, while waiting to be sued, prepare an opinion of counsel confirming that a recipient's allegedly infringing activities were done in good faith and do not infringe.
These opinions are expensive and they have some risks, such as waiving privilege with opinion counsel. But a new decision indicates that another possible defense is available when business or cost reasons dictate.
In IP Power Holdings v. Westfield Outdoor, issued in June 2020, the US District Court for the District of Nevada found that a substantive response to a demand letter can demonstrate a good-faith belief of noninfringement, especially when the response explains why the recipient believes it does not infringe.
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