Patent Assertion Fraud
Recently, some Colorado businesses have received letters demanding licensing fees for the use of patented technology. These demand letters can be very costly for the targeted businesses, which are forced to expend time, money and other valuable resources determining how to best respond to the threat.
This issue led the Colorado General Assembly to create legislation regarding Prohibited Communication Concerning Patents (§6-12-101 - §6-12-104) that governs demand letters related to patents within the State of Colorado.
A communication may violate the statute if it:
- Falsely claims that litigation has been filed.
- Is sent from a person who is not the patent owner.
- Asserts a patent that has been deemed invalid or unenforceable.
- Seeks compensation for activities occurring after the patent has expired.
- Does not identify the patent owner.
- Does not include the patent number.
- Does not explain how your products, services or technology infringe the patent or are covered by the patent claims.
Not all of these conditions are easy to spot. Things to look for include:
- Statements such as the company “believes” you are infringing its patents or claims that you “appear” to be using patented technology without supporting information or documentation.
- Claims that other businesses in your sector have entered into licensing agreements with the patent owner.
- Statements that the patent owner is offering a “special”, “limited” or “one-time” offer to license the patented technology.
- A short response deadline (usually within two weeks).
- Follow-up communications include demands for increased licensing fees and/or threats of legal action, often including a draft Complaint for patent infringement, which the sender claims will be filed within a short time (usually within two weeks) if no response is received.
If you have received a letter similar to these, please consider filing a report, even if you aren’t sure that the communication violates the statute. Reports enable our office to identify and devote our resources to cases involving harm to the Colorado business environment. The information you provide is vital in helping us properly identify potential fraud, document trends, pursue investigations, and ultimately file lawsuits on behalf of the public.
If you believe you have been victimized by patent assertion fraud, please file a report here.
Looking for Additional Resources?
- Check out our Consumer Resource Guide.
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Victim of Fraud?
- Report fraud or suspicious activity.
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