Key Takeaways:

  • Non-infringement refers to the assurance that a product or service does not violate existing intellectual property rights, particularly patents.
  • Avoiding patent infringement requires thorough due diligence, including prior art searches and claim comparisons.
  • Non-infringement and invalidity are distinct defenses in patent litigation.
  • Non-infringement clauses in contracts safeguard parties from liability and are often paired with indemnification terms.
  • Non-infringement opinions from legal counsel can shield against willful infringement claims and reduce litigation risk.
  • International IP laws must also be considered when marketing or distributing products globally.

Non infringement is the due diligence all inventors must take to avoid infringing on existing innovations that are already patented. Best practices for non-infringement can help your company avoid extensive, expensive lawsuits.

Avoiding Patent Infringement

To prevent patent infringement, inventors should:

  • Analyze and understand technology, design, and background documents for relevant innovations.
  • Review and study file histories and cited references for patents and prior art.
  • Construct claims with a comparison to previous claims.
  • Analyze target patents to ensure they do not infringe on prior art.

These steps can be taken strictly in the United States or review foreign patents as well.

What Is a Non-Infringement Clause?

A non-infringement clause is a contractual statement that affirms the goods, services, or intellectual property (IP) being transferred do not violate any third-party rights. These clauses are commonly included in technology, software, and intellectual property agreements and serve several purposes:

  • Risk Allocation: The clause helps define liability if a third-party IP claim arises.
  • Warranties and Representations: Sellers or licensors often warrant that their offerings do not infringe on patents, copyrights, trademarks, or trade secrets.
  • Due Diligence Tool: The presence of a non-infringement clause can be a signal to buyers or licensees that the IP has undergone review.

In many cases, the clause is combined with indemnification provisions to ensure that the indemnified party is protected in case of litigation due to infringement.

Patent Invalidity vs. Non-Infringement

Most software license agreements in the United States have two provisions to prevent intellectual property (IP) infringement. First, the licensee is protected from third-party infringement claims by the software owner. In addition, the licensor agrees to disclaim implied warranties that the software infringes on third-party IP rights.

To understand this issue, it's important to understand the Uniform Commercial Code (UCC). This U.S. body of laws provides guidance for many types of commercial transactions. Most states adhere to Article 2 of the UCC to establish laws about the sale of goods. This article is also relevant for software licensing.

Article 2 contains several implied warranties, which apply to transactions without being explicitly stated in the contract. Sellers must explicitly disclaim these warranties clearly in the software licensing contract. Specifically, the item of concern is the implied warranty in UCC that states "Freedom from infringement or third-party intellectual property rights." This must be remedied with an indemnification statement as described above.

U.S. contract law states that contract provisions do not have meaning if they are not read, indicating that every item in a contract is included out of necessity. If the same remedies are included in two separate provisions, it raises questions about which should be followed.

Patent lawsuits are typically defended by claiming either non-infringement or invalidity, two separate legal issues that must be analyzed independently of one another. Because non-infringement is the more common defense, many invalid patents may go unchallenged by the court, thus making innovation of new products and services more difficult.

Reforms for this issue could include:

  • Removing the increased burden of proof for patent invalidity
  • Establishing a bifurcation rule that allows defendants to defer defending infringement issues until after the validity of the patent in question has been determined
  • Creating an incentive for competitors to bring litigation that successfully invalidates a patent

Drafting Strong Non-Infringement and Indemnification Provisions

When drafting or negotiating contracts, it’s essential to carefully construct non-infringement and indemnification provisions. Consider the following best practices:

  • Define the Scope Clearly: Specify whether the non-infringement warranty covers patents, copyrights, trademarks, or all of the above.
  • Limit or Cap Indemnity Obligations: Parties often negotiate caps on indemnification liability to manage financial exposure.
  • Include Procedures for Claims: Detail how the parties will handle third-party claims, including notice, defense, and settlement authority.
  • Carve-Outs for User Modifications: Licensors may exclude liability for infringement caused by modifications made by the licensee.

Such clauses should be aligned with governing law and commercial terms to ensure they are enforceable and practical.

Global Considerations for Non-Infringement

While U.S. patent law provides a strong framework for managing non-infringement, businesses operating internationally must also evaluate foreign IP rights. What constitutes infringement in one jurisdiction may not apply in another due to differences in:

  • Patent claim interpretation
  • Enforcement mechanisms
  • Availability of prior art
  • Filing and disclosure requirements

To address these challenges, companies should:

  • Conduct international patent searches when entering foreign markets.
  • Seek local legal counsel in jurisdictions with complex or aggressive enforcement (e.g., the EU, China).
  • Implement clearance procedures before launching new products globally.

The Role of Non-Infringement Opinions

A non-infringement opinion is a legal document provided by a qualified patent attorney that outlines why a specific product or process does not infringe on a particular patent. These opinions are especially valuable for:

  • Mitigating Risk of Willful Infringement: In patent litigation, if a court finds that infringement was "willful," it can lead to enhanced damages (up to three times the actual damages). A written non-infringement opinion can be used to demonstrate good faith and avoid this designation.
  • Strengthening Defense: Non-infringement opinions provide a structured legal rationale that can be used as evidence in court or settlement negotiations.
  • Investor Assurance: Businesses may seek such opinions to reassure investors or acquirers that the product is free from legal risk related to IP infringement.

For optimal effectiveness, non-infringement opinions should:

  • Be written by independent and experienced counsel.
  • Include claim charts comparing each patent claim with the accused product or process.
  • Be updated regularly if the product evolves or the patent landscape changes.

Frequently Asked Questions

1. What does non-infringement mean in a legal context? Non-infringement means that a product, service, or work does not violate the intellectual property rights of others, such as patents or copyrights.

2. What is the difference between non-infringement and patent invalidity? Non-infringement asserts that a product does not fall within the scope of a valid patent’s claims, while invalidity argues that the patent itself should not have been granted.

3. How can I ensure non-infringement before launching a product? Conduct a freedom-to-operate (FTO) analysis, including patent searches and legal opinions, to identify and mitigate risks of infringement.

4. Are non-infringement clauses legally binding? Yes, they are enforceable contract provisions, often paired with warranties and indemnity clauses to protect against IP litigation.

5. What is the purpose of a non-infringement opinion? A non-infringement opinion provides legal justification that a product does not infringe a specific patent, helping reduce litigation risk and liability for willful infringement.

If you need help with non-infringement, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.