Crisis Management

Responding to IP Infringement Warning Letters

"Your product infringes our patent. Cease manufacture and sale immediately and compensate our losses." A warning letter that arrives out of the blue is a serious management issue that can affect sales of key products and business relationships. But receiving a warning does not mean that infringement is established — both infringement and the validity of the asserted right may need close examination. What matters is neither halting the business in panic nor ignoring the letter, but setting a response strategy based on accurate analysis.

Last updated: August 17, 2026

Checklist upon Receiving a Warning Letter

Identify the sender, the patent or other right asserted, the accused products or acts, the demands and the deadline
Do not rush into replying, admitting infringement or halting sales
Preserve the products, design and development records, sales and profit data, and contracts
Check indemnity and notice clauses with suppliers and contract manufacturers
Assemble a review team of attorneys, patent attorneys and technical staff

How we can helpAnalysis of the warning letter / reply and negotiation / business continuity and litigation strategy

Contact Form

Contents

1. What Not to Do When a Warning Letter Arrives
2. Initial Response: Team, Deadlines and Contracts
3. The Four Pillars of the Legal Analysis
4. The Opponent's Position and the Settlement Strategy
5. Response Options
6. If the Matter Goes to Court
7. Warnings Based on Rights Other Than Patents
8. When the Right Holder Approaches Your Customers
9. How We Support You
FAQ

1. What Not to Do When a Warning Letter Arrives

Ignoring it: missing the sender's deadline does not by itself establish infringement or liability, but the matter may escalate to litigation, preliminary injunction petitions or approaches to your customers. Promptly review the content of the warning and the nature of the deadline.
Replying in a way that concedes infringement: answers such as "we will take appropriate steps" or "we will consider discontinuing," given without legal analysis, can become evidence against you in later negotiations or litigation.
Reflexively halting manufacture and sales: stopping the business despite a real possibility that there is no infringement invites unnecessary losses and unsettles your customers.
Destroying internal records in the name of tidying up: development records and sales data can be the very evidence that protects you, whether in proving prior user rights or in the damages phase.

2. Initial Response: Team, Deadlines and Contracts

(1) Understanding the Warning and Building the Team

First establish precisely who sent the letter (the right holder or its counsel), the right asserted (patent number, etc.), the accused products or acts, the demands (cease manufacture, license, damages) and the response deadline. Then assemble a team from the IP, legal, development and business divisions together with attorneys and patent attorneys. The attorneys handle the overall dispute — replies, negotiations, contracts, preliminary injunctions and litigation — while the patent attorneys conduct the technical review of claim construction, prosecution history, prior art, invalidation trials and corrections. Where product analysis or experiments are needed, we also work with technical experts, and for warnings based on foreign patents — where the scope of rights, procedures and remedies vary by country — with local counsel.

(2) Handling the Response Deadline

A deadline set unilaterally by the sender is not, as such, a statutory deadline. Complete silence, however, increases the risk of litigation or a preliminary injunction. Where the analysis cannot be completed in time, consider acknowledging receipt, stating that the matter is under review and indicating when a substantive reply can be expected, while requesting an extension. The other side may not agree, so keep working with the original deadline in mind.

(3) Reviewing the Contracts

Review the contracts covering the design, manufacture, procurement and sale of the accused product, checking non-infringement warranties, indemnities, dispute notice deadlines, control of the defense, cost allocation and provisions on design changes and returns. Late notice to suppliers can prejudice indemnity claims, so review these in parallel with the reply to the sender.

(4) Preserving the Evidence

Preserve the accused products (including earlier versions), specifications, drawings and source code, development and design records, test records, prior art search results, manufacturing, procurement and sales records (volumes, prices, profits, inventory), contracts, purchase orders, licenses and correspondence with business partners, and materials showing that your business or preparations predate the filing of the asserted patent. If a design change is made, preserve the pre-change product and records first.

3. The Four Pillars of the Legal Analysis

(1) Status of the Right and of the Right Holder

Confirm the registered owner, the term, payment of maintenance fees, the asserted claims and any registered exclusive licenses, and verify that the sender is in a position to enforce the right.

(2) Does Your Product Fall within the Technical Scope? (Infringement Analysis)

The technical scope of a patented invention is determined on the basis of the claims. Break the claims into their elements and examine whether your product satisfies all of them, in light of the specification and the prosecution history (estoppel). Where the claims are not literally satisfied, consider infringement under the doctrine of equivalents; where components are supplied, consider indirect infringement.

(3) Is the Right Valid? (Invalidity Analysis)

Even a granted patent may be invalid for lack of novelty or inventive step or for defects in the description. A strong piece of prior art found through a search can materially change the negotiating position. The possibility of the patentee correcting the claims should also be factored in.

(4) Other Defenses and Rights to Practice

Consider prior user rights — where, before the patent application, you had independently begun the business practicing the invention in Japan, or preparations for it — as well as exhaustion for products lawfully sold, existing licenses and abuse of rights.

4. The Opponent's Position and the Settlement Strategy

The dynamics of negotiation differ depending on whether the opponent is an operating company or an entity that does not practice the patents itself but holds and licenses them (an NPE — see Q4). Investigate the opponent's enforcement track record and warnings to other companies, combine this with the legal analysis, and form a working hypothesis for resolution.

5. Response Options

Reasoned rebuttal: send a reply setting out your position on non-infringement or invalidity based on the analysis.
Design-around: examine whether future infringement risk can be reduced or avoided in relation to the asserted claims; verify the revised design separately, and treat past liability for the pre-change product as a distinct issue.
License negotiations: prioritize business continuity and seek a license on reasonable terms; royalty rate, scope and the treatment of past use are the main negotiating points.
Invalidity defense and invalidation trial: in infringement litigation, argue that the patent should be invalidated in an invalidation trial and that the right therefore cannot be enforced (Article 104-3 of the Patent Act); separately, an invalidation trial can be filed with the Japan Patent Office seeking a final decision that renders the patent invalid, in principle retroactively.
Declaratory action: after examining the procedural requirements, such as the interest in declaratory relief, consider seeking a court declaration of non-liability where the dispute is likely to be prolonged or escalate.

These options are not mutually exclusive: in practice they are combined — exploring license terms in parallel with a rebuttal, or pursuing settlement talks while an invalidation trial is pending.

6. If the Matter Goes to Court

First-instance patent infringement actions fall, in principle, under the exclusive jurisdiction of the Tokyo District Court for cases whose ordinary venue lies in eastern Japan, and the Osaka District Court for western Japan. The Tokyo District Court's IP divisions generally hear cases in two phases, addressing infringement and invalidity first and damages second. Patent litigation also involves procedures specific to the field, such as the statutory presumptions on damages (Article 102 of the Patent Act) and the inspection ("sashō") system — under which, on a party's motion and under strict requirements, the court orders an inspection by a neutral court-appointed expert at the opponent's plant (available only after a patent or exclusive-license infringement action has been filed, not before). Infringement litigation and JPO invalidation trials may run in parallel (the "double track"), and the arguments and evidence in the two proceedings must be kept consistent. Once litigation risk becomes concrete, decisions on inventory, orders and continued sales (see Q2) should be considered together.

7. Warnings Based on Rights Other Than Patents

The elements and defenses to examine differ by right. For trademarks: whether the sign is used as a trademark, similarity of marks and of goods or services, validity, non-use cancellation trials and prior use. For designs: the scope of the registered design, similarity, validity and prior use. For copyright: copyrightability, ownership, access and similarity, licenses and statutory limitations. For unfair competition claims: the statutory elements of each type, such as dead-copy imitation of product configurations and confusion with well-known indications. We advise on warnings based on trademarks, designs, copyright and the Unfair Competition Prevention Act as well as patents.

8. When the Right Holder Approaches Your Customers

A right holder sometimes notifies your customers of alleged infringement. Where the sender competes with you and the statements to your customers are objectively false and damage your business reputation, the conduct may constitute unfair competition in the form of injurious falsehood (Article 2(1)(xxi) of the Unfair Competition Prevention Act). However, the fact that infringement is ultimately denied does not automatically make the notification unlawful: the truthfulness of the statements, the scope of legitimate enforcement by a right holder, and the purpose, necessity and manner of the notification must be examined case by case. In parallel, it is important to explain your position and the status of the dispute carefully to your customers to contain any loss of confidence.

9. How We Support You

Analyzing the warning, setting response strategy, and drafting replies and rebuttals (working with patent attorneys and technical experts)
Prior art searches and invalidity analysis, and support in obtaining non-infringement and invalidity opinions
Reviewing contracts (non-infringement warranties, indemnities) and handling suppliers, contract manufacturers and customers
License and settlement negotiations, and drafting and reviewing license agreements
Invalidation trials, infringement litigation and preliminary injunctions, and declaratory actions (litigation is handled by attorneys, jointly with qualified patent attorney litigators where appropriate)
Countermeasures against improper notifications to your customers (injunctions and damages)
IP risk management in ordinary times (freedom-to-operate clearance, securing evidence for prior user rights, IP due diligence)

FAQ

Q1. The letter demands a reply "within two weeks," which we cannot meet.

A deadline set unilaterally by the sender is not, as such, a statutory deadline, and missing it has no immediate legal effect. In practice, a first reply acknowledging receipt, stating that the matter is under review and indicating when a substantive reply can be expected is common, together with a request for an extension. The other side may not agree, and complete silence raises the risk of litigation, so we recommend responding in some form within the stated period.

Q2. May we continue selling the accused product?

Whether to continue selling should be decided in light of the prospects on infringement, invalidity and defenses, the risk of a preliminary injunction, the additional volumes — and hence potential damages — from continued sales, the feasibility of a design-around, and the impact on customers. Where patent infringement is found, negligence is presumed (Article 103 of the Patent Act), but receipt of a warning letter does not automatically establish willfulness or gross negligence or increase damages. Decide whether to continue, modify or stop with professional advice as needed.

Q3. If a license would settle the matter, should we simply pay?

An early license can be a rational choice for business continuity and dispute costs. At the same time, the prospects of non-infringement, invalidity and prior user rights affect both whether a license is needed and its terms. Beyond the royalty rate, examine the covered products, territory and term, the treatment of past use, the position of affiliates and business partners, audit clauses and post-termination arrangements before deciding.

Q4. We received a warning from a so-called "patent troll." How does this differ from a warning from an operating company?

"Patent troll" has no established legal definition and is generally pejorative; we use the neutral term NPE (non-practicing entity) for entities that hold and license patents without practicing them. NPEs can include universities, research institutions and technology transfer bodies, so being an NPE does not in itself make enforcement improper. Where an NPE seeks licensing revenue, it sells no competing products, so counterclaims based on your own patents and market-based leverage such as design changes work differently than in disputes with operating companies. NPEs can still seek injunctions and damages, so the warning cannot be taken lightly. Do not decide whether to pay based on the sender's profile: examine the right and its status, the correspondence between the claims and your product, invalidity and prior user rights.

Q5. We have been making and selling the same product since before the patent application. Can we still infringe?

Even where your product falls within the technical scope of the patented invention, a prior user right — if established — may allow you to continue practicing the invention within the scope of the business, or the preparations, that existed at the time of the application. However, the mere fact of having handled the same product before the application does not automatically establish the right. It requires, among other things, that you conceived the invention independently (or learned it from an independent inventor) without knowledge of the patentee's invention, and that at the time of the application you were conducting, or had made effective preparations for, a business practicing the invention in Japan. "Preparations" require more than concept or research: an objectively recognizable, imminent intention to implement the business. Preserve development diaries, drawings, prototypes, test records, purchase orders and estimates, manufacturing and sales records, internal approvals, correspondence and file timestamps so that the state of affairs at the filing date can be proven. Note also that if your pre-filing manufacture and sale made the invention publicly known or publicly worked, this may constitute a ground of invalidity defeating the patent's novelty; whereas secret, internal practice may support a prior user right but does not by itself destroy novelty. Prior user rights and invalidity are analyzed separately, each with its own requirements and effects.

Responding to infringement warnings involves technology, law and management judgment in equal measure. When a warning letter arrives, consult us before you reply.

Contact

Contact Us at an Early Stage

Consulting us early helps preserve your options for response.