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Tier 1 Resolution Plan (Patent)

"IP Small Claims Court"

Brief Overview of the Tier 1 Resolution Plan:

Cost = $4,000 to the losing party

Scope = 1 patent claim, 1 accused product, 1 defense 

Timing = About 1 month from Respondent's joinder of issue

Outcome = Confidential (contractual) determination to cease or allow continuation of accused activity, no damages award

Details of Tier 1 Resolution Plan:

Not every IP dispute justifies the time and expense of a full scale litigation campaign.  Tier 1 is a good choice if the potential damages are not the driving force behind the dispute, but the parties still need a resolution.  For example, if potential monetary damages are small, neither party can justify the 7-figure cost of patent litigation in federal district court.  But the parties still need an answer whether there is infringement and the accused activity must stop. 


Tier 1 Resolution provides that answer quickly and at a modest cost. The Patent Owner identifies the accused product, and presents their assertion of infringement of one patent claim -- pick your best claim!  The Respondent then asserts one defense -- pick your best defense (non-infringement or validity challenge)!


Each party is responsible for its own attorney fees, but the proceedings are intentionally focused on each party's best argument, thereby limiting their legal fees. The proceedings are based on relatively short legal briefs, with no live testimony and no discovery.  All deadlines are short -- the objective is to reach a resolution in about a month from the time issue is joined between the parties.


The Umpire renders a quick, inexpensive, basic determination of whether there is infringement or not, with no monetary damages determination or award. If the Patent Owner prevails, the Respondent must stop all sales or use of the infringing product within 30 days of the Umpire's decision (or the parties are free to separately negotiate a license). If the Respondent prevails on a non-infringement defense they are free to continue without further action by the patent owner. If the Respondent prevails on the basis of a validity challenge, they receive a royalty-free non-exclusive license for the term of the patent.

The proceedings are private and confidential. The resolution obtained is enforceable in court, if necessary, under contract law. A successful validity challenge does not result in entry of judgment of invalidity in court -- the patent owner remains free to assert the patent against unrelated third parties (which may also benefit the prevailing Respondent due to reduced competition in the marketplace for its licensed products).


Each party pays $4,000 to initiate the proceeding.

The prevailing party gets their $4,000 back when the proceeding is over. 


1. The Patent Owner submits its initiation fee, identifies the patent-in-suit and the accused product, and provides contact information for the accused infringing party. The Umpire contacts the accused party and invites them to participate in the proceeding. If the accused party accepts, they submit their initiation fee, the parties execute a resolution agreement setting out the terms of the proceeding, and the Umpire sets the schedule. If the accused party declines or fails to respond, the Patent Owner's initiation fee is refunded, less a $250 processing charge.


2. The proceeding begins with the Patent Owner submitting its Claim Initiation Brief (5 page limit) setting out their infringement contention by applying the selected patent claim to the accused product.

3. The Respondent submits its Principal Brief (10 page limit) within 14 days of receiving the Patent Owner's Claim Initiation Brief, setting out one defense to the Patent Owner's claim (non-infringement or validity challenge).

4. Principal Brief (10 page limit) by Patent Owner due 14 days after Respondent's Principal Brief responding to the asserted defense.

5. Respondent's Reply Brief (5 page limit) due 7 days after Patent Owner's Principal Brief. 


6. Umpire's Decision within 7 days after Respondent's Reply Brief.

Notes: The above are typical terms of a standard Tier 1 proceeding for a patent dispute, but may vary in particular cases, or upon agreement of the parties. The roles and timing can be reversed if the accused infringer is the one who first asks for a Tier 1 Resolution. Similar proceedings can be provided for trademark disputes.

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