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Limiting Exposure: How to Decrease Litigation Risk

Tim Zarley \ April 27, 2017

Simply stated, IP litigation is high stakes and stressful for everyone involved. There are a lot of reasons why avoiding IP litigation is the best course of action for you and your intellectual property portfolio, and choosing to take an infringement case to court is a costly decision that shouldn’t be made lightly. Win or lose, it not only takes a lot of time and money, but can still end up costing you more than it gains (even if you win the case). Despite popular belief, there are ways to avoid IP litigation and keep you on the right track instead of taking a chance in the court system.

TAKE PRECAUTIONS

There are many things you can do long before a problem ever occurs to avoid litigation. You can lay out, unless you’re working alone, how things will be handled between your partners and you. For example, creating an agreement outlining how things will be handled if one partner wants to leave, or God forbid, meets their demise (legal speak for kicks the bucket). The last thing you want is an estate that wants to sell when you want to move forward.

Another thing you can do is to take reasonable measures to maintain confidentiality. Non-disclosure agreements are a good start, but internal precautions are just as important. Employee confidentiality agreements, limiting access to confidential information, maintaining both physical and electronic security, and conducting periodic training are just a few things you can do to avoid headaches down the road.

One more thing is to obtain a freedom to operate opinion before you adopt a new trademark or roll out a new product. The last thing you want is to spend time developing a mark or a product only to find you’re infringing another’s intellectual property. 

LIMIT YOUR COSTS

If, despite your efforts to avoid litigation, you find yourself in the middle of a lawsuit, there are a few ways you can reduce your risk. One way is to negotiate with the other party. Remember, the more you have to offer, the better your position to bargain. It takes a little creativity, but a resolution can be reached when parties are reasonable and willing to work together toward a solution that benefits all.

Another way to avoid IP litigation is through court mediation. In some cases, meeting in a federal courthouse before a judge can help convince the parties to settle. This is less costly than a full-blown litigation trial, effective in helping both parties benefit from the outcome, and can help them both avoid similar experiences in the future.

If you absolutely must pursue a litigation case, there are ways to limit the expenses associated with it. You can work out with your attorneys how much you prepare for the case, including filing motions to eliminate issues before the trial even begins. By focusing on the basics of what needs to be done, a substantial amount of the cost can be avoided.

There’s no question that in litigation nothing is for certain. In most instances the best outcomes will come from avoiding the courtroom, but that doesn’t mean that you won’t be getting anything from your IP case. There are alternatives available that can bring benefits to you and your business via preventative efforts, mediation or settlement. With the right IP attorney on your side, it’s possible to get that big win with a creative solution that lets you avoid IP litigation.

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