SPEAK SOFTLY, BUT CARRY A BIG PATENT

How a patent shut down a competitor in only 24 hours.

Nothing more forcefully drives home a lesson you’ve been teaching for years than when what you’ve been telling others for years happens to you.

I’ve been reminding everyone for years that having a patent can provide real competitive benefits, even if you never have to spend a fortune litigating it. I liken it to carrying a pistol for self defense, and probably never having to shoot it – you can usually scare off the muggers just by letting them know you have it and are willing to use it if necessary.

Here’s what happened to me. First, I got an email from a friend who spotted an advertisement for an accessory that reduces the trigger pull on a Steyr AUG rifle (the bullpup with a long, heavy trigger pull that takes a team of monkeys to help you pull it, and the monkeys still complain about how gritty and jerky the pull is!)

As this newsletter some time ago, I had earlier bought an AUG, and found out how bad its trigger pull really was. I dug inside, found almost nothing but plastic parts, and devised a drop-in replacement part that lets the user select a lighter trigger pull.

As you might guess, I filed a patent application for the product, and eventually was granted a patent (to view, just Google: “patent 7165352” – it works for any patent).

It takes the worst aspect of a $2000+ rifle, and makes it a lot better. For $60 (it was $50 until I raised the price, just because I could) it’s a great value to the customer. Never mind that it’s a simple plastic piece the size of a stick of gum, that could probably be made for pennies (I pay more than that to have it machined, but didn’t have to invest in tooling).

This is a small product for a very small market.  So even if had to have hired myself at normal rates, instead of working on the patent in my spare time, hindsight tells me that the investment would have been justified, especially after what happened this week. That’s because adding up the profits this little product will generate over nearly 20 years of the patent term are far more than the investment in getting a patent.

But until that incident, my “Trigger Tamer™” device never had competition. The only benefit that the patent probably gave me was in preventing competition. There may have been others who saw my product, realized they could undercut me on price by a lot, and take over the whole market. But when they saw my product was patented, they didn’t bother to tool up and compete. So for over five years, I’ve set the price where I think the market values the product. I’ll never know how many competitors who would have totally taken away my business but were instead deterred by my patent.

Then, the competitor popped up. He was a hobbyist who had come up with a way that was different from my Trigger Tamer device to reduce the AUG trigger weight. His ads were popping up on the gun boards, asking folks whether they would pay $10 (one sixth of my price) for a device that did the same thing as a Trigger Tamer device. A friend of mine spotted his “market research” and alerted me.

How Your Patent Stops a Stubborn Infringer

The first thing I did was to send an email to the owner of the website where the advertisement appeared (the one with the long and challenging German word that starts with “Sturm” as its name). I gently told the website owner that his website was advertising an infringing product, and that he should pull the advertisement to avoid liability for patent infringement. After all, patents prevent others from selling as well as making or using a patented product. Unsurprisingly, my buddy who ran the board did not go to his lawyers for an opinion, dispute my patent rights, or dispute whether the new product was covered by my patent. He certainly didn’t vow to fight to the end over his right to advertise the product I accused of infringing my patent. Instead, he dropped the ad immediately, and sent me a brief little love note saying: “I hate lawyers!” He didn’t mention what he thought of firearms inventors. Maybe he’ll read this and tell me.

But this point is an important one for many businesses facing knock- offs from overseas. Even if you have only a U.S. patent, you can hamstring manufacturers of the knock-off imports by denying them a place to sell their knockoffs. Suppose your patent product was knocked off in China, and made it through customs without being detected. Now, it sits on the shelves of Cabela’s, right next to yours, at half the price. Sending a “cease and desist” letter (aka “Nastygram”) to the Chinese factory – if you can find it – won’t make a bit of difference. But a polite letter to Cabela’s will probably have them sprinting to the shelves to remove the infringing products. After all, why would they want to face the liability for infringement, when they’re just getting a modest markup on a limited volume? What’s more, they’ll still be able to meet customer demand with your product (and at higher profit margin to boot).  Amazon and eBay are essentially the same, and you can often do it yourself – if you have a patent.

This all works so nicely because a U.S. patent protects the whole market here. They might be able to knock off your product in one foreign country and sell it for use in another foreign country, but they’ll be stopped from entering the U.S. market.

Your U.S. patent protects foreign markets in other ways. Your U.S. patent, along with your reputation as the leading company, will give you an advantage even in nations where you don’t have patent rights. For instance, when the Singapore police department buys a big batch of Crimson Trace Lasergrips™ devices, they’re voluntarily choosing not to buy Chinese knockoffs at a much lower price. Even though the U.S. patent doesn’t cover China or Singapore, the customer wants the best available, for critical reliability.  In fact, there might not even be any reputable makers of knockoffs for the reason that they wouldn’t be able to sell into the large U. S. market, so the patent deters competitors even from entering the business.

I Felt a Little Bad Going After a Small Firearms Innovator. (But Only a Little).

In the Internet world, you don’t always really know who your infringer is. The Internet discussion boards use nicknames, so it’s tough to tell the real identities of the people who post there. But for my infringer, I had a first name, a last initial, and an email address. That was enough to send, via email, the formal letter I drafted up the day I learned of his plans for infringement.

The letter is fairly standard, but calculated to be alarming. It informed him of our patent rights and the fact that now that he knows of our patent, his liability triples from this point forward. He was facing liability not just for the tiny profits he might make on his $10 device, but for triple our lost profits on our $60 device. Depending on our (confidential) profit margin, after the tripling of liability, he could be liable for something like $150 in damages for each $10 part he sold.

We also asked for a full recall, names and addresses of any purchasers, and any other information pertaining to all units already sold. We also asked that all his Internet posts regarding his proposed device be deleted. But what we really wanted was just for him to stop. We also didn’t want to suffer a PR problem of appearing to be the “bad guy” among our customer base of enthusiasts, so we were delicate and friendly where we posted notices on the discussion boards, and focused on being a small innovative business ourselves, instead of blustering like legal bullies.

It worked. In 24 hours!

Our letter to the infringer included the reminder that the profits from his $10 product probably wouldn’t pay him to consult a patent attorney even to get an opinion of whether he infringed our patent.

He pretty much agreed with that when he wrote back, and everything proceeded truly amicably from there. I offered to send him a free sample of the Trigger Tamer, and he offered to send me an instructional article that would be useful to some of our customers. Within 24 hours of my learning of the infringement, all the posts and ads about the infringing product were removed from the Internet, and our product was once again the only option out there. Faster than FedEx, the problem was resolved!

His Big Mistake

First, you should know that the infringer wasn’t any local yokel who was naïve about patents and business. He’s a lawyer who actually owns patents himself, and is a serious firearms hobbyist. Our infringer’s big mistake was in proceeding without advice even when he knew of our Trigger Tamer patent. Basically, he knew he was going head-to-head with a patented product, and relied on his own amateur assumptions about interpreting patent claims, instead of getting reliable advice.

Now, he still thinks that his product really didn’t infringe our patent, but he knew we had a good enough case (one we sincerely believe was plenty strong) to put up a serious fight. He backed down just because we believed he infringed. Doesn’t that make you wonder why he went up against a patent product, when he was going to back down at the first accusation? Why bother?

That’s why he should have (assuming the anticipated profits in the product justified it) gotten an opinion from a patent attorney before making plans to market a competing product. For a modest investment, he would have learned that we had at least a solid argument to make, and he wasn’t in the clear just because his product looked different from ours. Mine was a replacement product, and his was a little part that connected to the existing product, yielding the same result that we laid out in our patent claims.

And if all he expected was to sell a couple hundred of these to friends over the years, then that level of business isn’t worth trying to knock off a patented product. The infringer didn’t get a patent analysis he needed. There’s another kind of patent search that people usually think is needed but often isn’t.

But I get calls from our clients all the time asking if they should worry and do a patent search to make sure that their new product doesn’t infringe on someone else’s patent rights. I appreciate this level of responsible caution, but it’s rarely justified. In fact, it’s very rare to conduct a “right to use” patent search to ensure that you have the right to use (and make and sell) your own new product. Such a search is a long and involved process that is rarely justified.

The time when you should be worried about patent infringement is when you know that there’s a patent out there, and you wonder if the design of your new product infringes on it. You might see a patent number or the phrase “patent pending” in the competitor’s advertisement. The product or packaging might be marked with these phrases. Or, you may just know that you’re planning a close copy, or even a knockoff, of a tough competitor’s product, in which case, we can search for all that company’s recent patents and published applications, looking for any landmines to be avoided. These kinds of searches are usually quick and inexpensive.

One other reason to invest in an expensive “right to use” patent search is if you are investing a fortune in tooling or marketing, and simply can’t afford to risk withdrawing your product if it were later found to infringe. In that case, an expensive insurance policy in the form of an extensive patent search makes sense, but the rare cases that justify it are major new technology investments by corporate technology giants larger than any companies in our industry.

Lessons Confirmed

In the end, I was reminded that most patents don’t need to be litigated to have a beneficial effect, that most infringers will surrender when faced by a legitimate accusation of infringement, and that a patent infringement analysis should be requested when you are launching a new product against a patented product that may have similarities.

I also learned that it feels good to win a battle without getting dirty, and it’s just as satisfying for ourselves as when we succeed on behalf of our clients.

Finally, I was reminded that a legal dispute that concludes with the parties still on friendly and respectful terms is always welcome.  You might be surprised how many former adversaries of my clients later went on to hire us to help protect their own inventions and brand names.

I look forward to reporting on SHOT 2023, and hearing from you with your questions and ideas.

By Ben Langlotz | January 10, 2023 | Firearms, Firearms Industry Advice, Patent | 0 Comments