1. What is a patent demand letter?

A patent demand letter is a notice from a patent owner or their representative claiming that your product or service infringes one or more of their patents. It typically demands that you cease the allegedly infringing activity, pay a licensing fee, or enter negotiations.

2. Why did I receive a patent demand letter?

Businesses receive demand letters for many reasons:

• Your product genuinely may practice a patented feature.

• The patent owner may believe your company is a promising target for licensing.

• Automated or broad enforcement programs may identify you based on publicly available information.

• You may resemble other companies that have already taken licenses.

3. Is receiving a patent demand letter a lawsuit?

No. A demand letter is not a lawsuit, but it sometimes precedes one. Often, the sender is testing whether you will engage in negotiation or settlement before taking more formal action.

4. How seriously should I take a demand letter?

Very seriously. Even if the claim appears weak or generic, failing to respond strategically can increase risk. An ill-considered reply (or no reply at all) can escalate the situation or negatively affect your position if litigation follows.

5. Do I need to respond to a patent demand letter?

In most cases, yes. Responses can take several forms—including formal rebuttals, requests for clarification, or negotiation-oriented replies—but silence can be interpreted as disregard, increasing pressure or risk.  That said, sometimes silence is the best response, but it should be an intentional one, fully aware of the potential dangers.

6. What information should I look for in a demand letter?

Important items include:

• The asserted patent numbers

• Specific products or services alleged to infringe

• Claim charts (if provided)

• Deadlines or demands

• Proof of ownership or licensing authority

• The sender’s identity and legal counsel

If key details are missing, the letter may be part of a broad enforcement approach that warrants caution.

7. What is a non-practicing entity (NPE)?

An NPE is an entity that owns patents but does not manufacture products or provide services covered by those patents. Some NPEs solely license their patent portfolios. NPEs can be associated with Universities, technology transfer laboratories, and can even be affiliated with operating companies.  What primarily differentiates NPEs from operating companies, is that NPE rarely are concerned with taking a license from companies that they target.  As a result the business and legal strategies for responding to NPEs differ from more typical operating companies that manufacture product and wish to license patent that read on those products to third parties.

8. How should I evaluate the strength of the patent claim?

Assessment typically includes:

• Validity of the patent

• Strength of the infringement theory

• Prior art that may undermine the patent

• Whether the asserted claims actually read on your product

• The sender’s litigation history

A patent attorney can conduct this analysis and help determine your best next steps.

9. What are common strategies for responding?

A few standard approaches include:

• Requesting additional information when the claim is vague

• Providing a substantive rebuttal showing non-infringement or invalidity

• Negotiating a license, if appropriate

• Filing for declaratory judgment, in certain circumstances

• Ignoring the letter (rarely advisable and typically strategic only in limited, counsel-guided situations)

10. Should I contact the sender directly?

Only through counsel. Direct communication can inadvertently reveal information, weaken your legal position, or signal willingness to settle.

11. Can responding improperly increase my legal risk?

Yes. Inconsistent statements, accidental admissions, or overly aggressive replies can complicate your defense. Well-structured responses aim to reduce, not increase, exposure.

12. How much time do I have to respond?

The letter may include a deadline, but these are often negotiable. However, ignoring deadlines without counsel’s guidance can be risky—especially if the sender is known for promptly filing lawsuits.

13. Can I challenge the patent?

Often, yes. Options include:

• Ex parte reexamination

• Inter partes review (IPR)

• Post-grant review (PGR) (for newer patents)

Challenging a patent can be an effective strategy when the patent is weak or overly broad.

14. What happens if I do nothing?

Possible outcomes include:

• The sender may escalate to a lawsuit

• They may send additional letters

• They may shift attention to other targets

Because the risks vary, inaction should only be chosen after legal consultation.

15. How can I reduce the risk of receiving demand letters in the future?

Proactive steps include:

• Conducting freedom-to-operate (FTO) analyses

• Monitoring competitor and industry patents

• Implementing design-around strategies

• Establishing internal IP policies

• Keeping accurate documentation of product development

16. Should startups respond differently than large companies?

Startups often have fewer resources and higher vulnerability. This means:

• Assessing financial risk carefully

• Considering business priorities

• Avoiding statements that could impact fundraising or acquisitions

However, the fundamentals of legal strategy remain similar. 

That said, because startups are typically worth less and have fewer resources (i.e., cash at hand) with which to take a license, NPEs are less likely to target startups and can be much more easily made to go away. 

One the other hand demand letters from competitors may signal that the competitor is trying to ward off competition and may warrant a discussion with a competition or anti-trust lawyer.

17. When should I involve a lawyer familiar with patents?

Immediately after receiving the letter. Early counsel can:

• Help evaluate risk

• Draft protective responses

• Avoid strategic missteps

• Manage negotiations

• Prepare defenses or counter-actions

18. What does a strong response typically include?

A well-crafted reply may:

• Challenge vague allegations

• Identify factual inaccuracies

• Request claim charts or technical details

• Present non-infringement positions

• Raise prior art concerns

• Establish a professional tone without making admissions

19. What does a demand letter usually not tell you?

• The actual strength of the patent

• The sender’s settlement flexibility

• Whether litigation is truly imminent

• Whether you are one of many targets

Experienced counsel can help “read between the lines.”

20. What is the ultimate goal in handling a demand letter?

To manage business risk efficiently while preserving the broadest range of legal and commercial options. A good strategy aims for clarity, leverage, and minimization of disruption.