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I'm a one man startup with a high price, low volume, niche software product that I'm considering selling in the US. However, I'm concerned that it may infringe a US patent without me knowing because US software patents seem to be granted for the most obvious and trivial ideas.

To decide if it's worthwhile persuing, I'd like to get a feel for the risks of being sued, what happens if I am sued, and what the potential costs could be if I was sued. I've got a few specific questions:

  1. What is the process for a US company to sue a UK company for patent infringement?

  2. I don't think I could afford a defence; I've heard it costs at least 7 figures. Do I have to defend myself? Do I have to hire a lawyer? Do I have to travel to the US? Is it acceptable to do nothing and wait and see what the US court decides?

  3. If I do everything to keep costs to a minimum e.g., wait for the verdict and not hire lawyers. How much money will it cost my company? Would I just need to pay the US patent owner the profits on my sales to the US? If so, I could accept that risk.

  4. How likely is it that if I did inadvertently infringe a US patent I would get sued? I'm a one man company, and I don't expect US sales to be more than $200K per year at the very most.

Thank you.

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2 Answers

up vote 3 down vote

Nothing, if it's a software patent you simply ignore the threats, let them take you to court in the US, don't turn up, lose by default and carry on regardless.

We're in exactly the same position and ignore the ridiculous crap that the US confuses for inventions. There are cases of UK companies doing exactly this, nothing they can do to you if you have no US presence or assets.

Only one downside if wanted to sell your company or technology to a US company you'd have a problem.

But just tell to the US company this when they come to sue, they'll probably realize it's pointless.

That said, with sales like that they're not likely to bother you. The majority of US patents are defensive in case someone comes after them, a few are for patent trolling. The patent trolls want you in have big cash in the bank to bother.

Another tactic, check if fully legal before doing so, is to keep the copyright to the software to yourself and license it to your company. If your company goes under, it's basically worthless because it owns nothing.

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Very many thanks for providing your first-hand experience of dealing with this. Much appreciated. – StevenF Mar 14 '11 at 17:56
Yes, I was wondering what would happen if my company went bankrupt. Seems like my creditors would get all my software so I will look at the copyright idea. Thanks again! – StevenF Mar 14 '11 at 18:05
What about having a reseller in US, what happens then? Any idea? – the dictator Mar 20 '11 at 21:09
up vote 0 down vote

If they have a valid US patent it will not be just you at risk, they could also go after your US-based distributors and customers. It will not help your US business if your US customers are getting lawyer's letters from the patent holder.

If you are sued and choose to do nothing and wait, it is very likely that a judgement in default will be entered against you. There are procedures whereby US courts can request UK courts to enforce a judgement, but there are a lot of conditions to satisfy before they could succeed.

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The UK has explicitly stated that software patents are not valid (same for as country in Europe). This isn't like general commercial law, it'd be laughed out of court here. The point about customers and redistributors is a very good one though. Overall, the sooner the corrupt US patent system sorted out, the better. – David Mar 20 '11 at 18:56

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