How can a company know if they're taking enforcement of intellectual property too far?
It comes down to cost versus benefit. IP litigation can be very expensive if proceedings are taken all the way to a hearing.
However, a well resourced competitor eating into market share with a cheap copy of your product - or a brand that's very similar to yours - will cost you more in the long run. In fact, it could threaten the existence of your business.
Most litigation can be resolved long before it gets to court and a negotiated settlement is almost always in the best interest of both parties.
You may be going too far if you start proceedings against someone who has infringed your IP, but isn't damaging your business - or if you're suing someone as a matter of principle.
When making your cost benefit analysis, don't forget to factor in the impact of at least one of your senior executives being distracted by the litigation for a year or more - and the fact that money you spend on litigation could be used for things like marketing.
Litigating against the first infringement of your product sends a strong message to the market that incursions of your rights won’t be tolerated and hopefully this will mean spending less on litigation in the long run.
Remember that any infringer doing good business is a potential licensee, and litigation may be the stick required to get them to the negotiating table.
What is the biggest challenge your small business is facing in 2014?Related story: (See story)