Is My IP Demand Letter Scary Enough?
Proactive Strategies for Deterring Copycat Competitors
by Kelly Kubasta, Attorney/Shareholder
A “victim of your own success” dilemma arises often in the world of intellectual property. The more popular a product or service becomes, the more likely a slew of copycat competitors will enter the marketplace. As a business owner, an important question arises: How do you minimize unfair competition without letting legal issues divert too much time, money, and attention away from your core business?
While there is no one-size-fits-all answer, the best strategy is often to build your intellectual property portfolio in a multi-layered approach that leads to the most impactful (i.e. “scary”) demand letter possible. Also known as a cease-and-desist letter, a strong multi-layered letter increases the likelihood that the copycat will simply concede without a fight, thus allowing you to promptly return your attention to your core business.
Experience shows that a demand letter is far more effective when the IP owner can legitimately and forcefully assert that more than one right has been infringed/violated by the copycat.
Consider, for example, a demand letter that asserts infringement of a single utility patent. In this instance, the demand letter presents a clear and focused target for the copycat. Knock over that target (or even cause it to tip a little) and the copycat has the advantage. By developing even one good faith basis for non-infringement or invalidity of the single patent, the copycat can force the IP owner to face a difficult decision: Follow through with a very expensive and time-consuming patent infringement litigation that may or may not succeed or allow the copycat to continue unimpeded.
In contrast, a multi-layered demand letter that properly asserts two or more IP rights presents more hurdles for the copycat to clear. The copycat now has multiple targets, all of which need to be knocked down. This forces the copycat into a far more vulnerable position, especially considering that the copycat faces a wider array of remedies and a larger financial liability when multiple rights are asserted.
Of course, the above premise begs the question: How exactly do you build the foundation so that a future multi-layered demand letter can legitimately and forcefully assert that more than one right has been infringed/violated? Glad you asked! The answer is that the IP owner should proactively consider intellectual property issues long before the copycat enters the picture and should not become overly focused on just one form of IP. The IP owner should consider all available forms of intellectual property, including utility patents, design patents, trademarks, trade dress, copyrights, trade secrets, and other tangential rights like domain names, social media profiles, and the like.
How it could work
For example, you may choose to file a utility patent application relating to the core functionality of your product or service. This is an excellent first step, but it often takes multiple years before a patent issues (assuming it ever does issue). You should also consider additional avenues of protection, which may include trademark registrations for your house brand and any related logos; copyright registrations for the source code of any computer software or websites or for product labels or instructions; design patent applications for product configurations or graphical user interfaces; domain name registrations for your brand and variations thereof; and registration of social media accounts for your brand and variations thereof. Be creative in identifying aspects of your product or service that merit protection and provide a potential basis for fighting the future copycat.
And yet it’s complex: All forms of intellectual property are not always available for every product or service you offer. Moreover, each form differs in the subject matter protected, the time and effort necessary to confirm registration/ownership, and the types of remedies available. The right strategy for you requires a careful and thorough review with your IP attorney to ensure you consider all available forms of IP and the respective costs and benefits of each.
By proactively and intentionally implementing the above multi-layered approach, however, you can put yourself in the best position to fend off copycats without the need for litigation.