Intellectual property is among the most valuable assets a business can own. As you might imagine, disputes relating to intellectual property in the business world are numerous and often complex. Many involve IP infringement. What is IP infringement? It is a violation of the terms of use for a piece of intellectual property.

However, breach of contract claims may also address intellectual property violations. So what are the material differences between the two, and what are their ramifications?

If you are dealing with intellectual property issues, don’t hesitate to reach out to an experienced intellectual property lawyer for help. Weisblatt Law Firm is ready to find solutions to your problems. Call (713) 666-1981 today.

IP Infringement vs. Breach of Contract

As mentioned, intellectual property infringement deals with the violation of the terms of use of an intellectual property asset. But what is IP breach of contract? IP breach of contract is a claim that typically arises out of licensing deals where one party allows another the use of a particular IP asset by way of a license. The dispute happens when the licensee fails to use the IP asset according to the binding terms of the contract.

The benefit of licensing IP is apparent on its face. Licensors are allowed to benefit from the work of licensees who use the work for their own projects. Licensees get their hands on valuable knowledge, secrets, registered designs, and other types of IP assets that provide them with a great deal of benefit in their business, art, and operational ventures.

Weisblatt Law Firm diligently handles intellectual property disputes with skill, experience, and creative strategizing.

What Are the Key Differences Between the Two?

There are a few key differences between intellectual property infringement and IP breach of contract that all owners of IP assets should be aware of. First, it should be noted that a licensor may, in some cases, have both an IP infringement and an IP breach of contract claim.

How to Determine the Type of IP Dispute You Have

Intellectual property infringement claims are based on actual IP violations, whereas IP breach of contract claims deal with violations of a licensing or other IP agreement. In other words, there need be no contract or license involved for an IP asset’s owner to file an IP infringement claim. But a violation of a licensing agreement may only result in a breach of contract and not IP infringement.

Determining whether a breach of contract, an infringement, or both took place is complicated. The keen and experienced eye of a seasoned attorney is crucial at this stage. Without an attorney, a claimant may not realize the nature of their claim and may unintentionally pass up damages they are entitled to.

Generally speaking, a license infringement case will be considered a breach of contract case if:

  • The license was exclusive.
  • The license breach was the breach of a covenant.
  • The license contract provides a remedy for unauthorized uses of the license.

If the license is non-exclusive and other parties may use the IP asset, the case will likely be treated as an intellectual property infringement case. This treatment occurs because an exclusive license effectively transfers the IP’s ownership rights to the licensee. You can’t infringe upon IP rights that you own.

Covenants are general contract promises, such as a promise to pay. Breaching them is not the same as IP infringement, even though IP infringement by a licensee involves a breach of contract.

Difference in Available Damages and Compensation

One of the most important differences between IP infringement and breach of contract claims is the amount and types of damages that may be sought in a lawsuit. In a breach of contract case, the plaintiff is limited to contractual damages. However, IP infringement plaintiffs have more damages available to pursue.

For example, if a copyright holder grants a license and the licensee infringes on the copyright, the licensor can potentially seek statutory or actual damages. They may also seek to recover attorney’s fees. When trademarks or trade secrets are the IP assets involved, actual damages are on the table as well as exemplary damages. Exemplary damages seek to make an example out of bad business behavior. For plaintiffs seeking redress from patent infringements, three times the actual damages awarded may be available.

Meet With an Experienced Business Contract Lawyer Today

Regardless of whether you’re dealing with infringement or breach, it is strongly suggested that you seek the services of an experienced business contract lawyer with IP experience. They will know which sources of damages to pursue to ensure that you receive the most optimal damages payout for your claim.

Your intellectual property rights matter and deserve protection. For a consultation with an experienced IP lawyer, contact Weisblatt Law Firm today. We offer free phone consultations — call us at (713) 666-1981.

Houston Business Contracts Attorney

Attorney Andrew Weisblatt

Mr. Weisblatt has practiced continuously since becoming licensed in 1992 and has represented businesses ranging in size from one person start-up ventures to multi-national corporations employing hundreds of people in multiple countries. From 2005 through 2009 Mr. Weisblatt was in-house counsel and chief operating officer of a multi-national corporation in the steel products industry. That in-house position provided valuable insight into how businesses work and what they actually need from their lawyers – both in-house and outside counsel. Attorney Bio