Received a Patent Demand Letter in Texas? Do Not Ignore It

Receiving a patent demand letter is alarming. Someone is claiming your product, process, or technology infringes their patent and they want money, a license, or both. The letter may feel like a threat, and in many cases it is one. But how you respond in the first hours and days after receiving that letter can significantly affect the outcome of the dispute. Baker Law Group, PLLC represents Texas businesses facing patent demand letters and patent infringement claims in federal courts throughout Texas and provides direct legal counsel from the moment the letter arrives.

This page explains what a patent demand letter means, what to do immediately after receiving one, what your response options are, and why the decisions you make right now matter more than you might realize.

What Is a Patent Demand Letter?

A patent demand letter is a written communication from a patent holder or their representative asserting that your business is infringing one or more of their patents. The letter typically identifies the patent being asserted, describes the alleged infringing product or process, and demands a response, which may include paying a licensing fee, entering a licensing agreement, ceasing the allegedly infringing activity, or some combination of these.

Demand letters vary significantly in their seriousness. Some come from large technology companies with substantial patent portfolios and strong infringement cases. Others come from patent assertion entities, sometimes called patent trolls, that acquire patents primarily to generate licensing revenue through demand letters rather than to protect an actual product or business. Both types require a careful and strategic response because ignoring either one carries real risk.

A demand letter is not a lawsuit. It does not mean you have already lost. It is the beginning of a dispute that may resolve through licensing, negotiation, or if necessary litigation. The path the dispute takes depends heavily on how you respond from the start. For a detailed explanation of what patent infringement involves and what the legal standard requires, what is patent infringement in Texas covers the elements the patent holder must prove to succeed in court.

What to Do Immediately After Receiving a Patent Demand Letter

The steps you take in the first hours and days after receiving a demand letter lay the foundation for everything that follows. These five immediate actions protect your legal position before you have had the chance to fully evaluate the claim.

Do not ignore the letter.
A patent demand letter that goes unanswered does not go away. Ignoring it signals to the sender that you are not taking the claim seriously and increases the likelihood they will escalate to filing a lawsuit in federal court. Demand letters often include deadlines for response. Missing those deadlines without explanation can also limit your negotiating options later. You do not need to respond immediately, but you do need to acknowledge receipt internally and begin the process of responding strategically.

Issue a litigation hold immediately.
A litigation hold is an internal instruction to stop the routine deletion of documents, emails, files, and records that may be relevant to the patent dispute. This includes emails discussing the accused product or process, design files, source code, sales records, financial data, and communications with suppliers or customers about the relevant technology. Destroying or altering potential evidence after receiving notice of a potential claim creates separate and serious legal liability that goes beyond the underlying patent dispute itself. Issue the litigation hold in writing to every person in your organization who may have relevant documents.

Do not contact the sender informally.
Calling or emailing the sender to discuss the claim before consulting an attorney is one of the most damaging mistakes Texas businesses make after receiving a demand letter. Early statements, even casual ones, can be characterized as admissions and used against you in subsequent litigation. Everything you say in an informal conversation can become evidence. Let your attorney handle all communication with the sender from the first moment of contact.

Forward the complete letter to a patent litigation attorney.
The demand letter should go to a qualified patent attorney immediately and in its entirety. Do not send a summary. Do not respond to the sender while waiting for your attorney’s review. A patent litigation attorney evaluates the strength of the infringement claim, identifies potential defenses, assesses the patent’s validity, and advises on the strategic options available to your business before any response goes out. The quality of that initial evaluation shapes everything that follows.

Review your insurance policies.
Many Texas businesses do not realize that existing commercial liability policies, umbrella policies, or errors and omissions policies may provide coverage or a defense duty for patent infringement claims. Review your policies immediately and notify your insurance carrier of the demand letter. If coverage applies, your carrier may be required to provide a defense, which can significantly reduce the cost of responding to the claim. Do not delay this step because insurance policies often have notice requirements that can affect coverage if not met promptly.

Evaluating the Demand Letter: What Your Attorney Will Look at First

Once a patent litigation attorney reviews the demand letter, the evaluation focuses on several key questions that determine your response strategy.

Is the patent valid?
Not every patent that appears in a demand letter is actually valid. Patents can be challenged on the grounds that the invention was previously known, previously patented, or obvious in light of existing technology. A patent that would not have been granted had the examiner been aware of certain prior art may be challenged through inter partes review before the USPTO’s Patent Trial and Appeal Board, which is often a faster and less expensive path than full district court litigation.

Does your product actually infringe?
The demand letter makes an assertion of infringement, but assertions are not proof. A proper infringement analysis compares every element of the patent’s claims to your product or process. If even one element of the asserted claim is absent from your product, that claim is not infringed. Your attorney conducts a freedom-to-operate analysis to evaluate whether the accused product falls within the scope of the asserted claims.

Who is sending the letter?
The identity and business model of the sender affects the likely resolution path. A competitor asserting a patent may want you to stop selling a competing product. A patent assertion entity may primarily want a licensing payment. Understanding the sender’s motivation helps your attorney structure a response that addresses the actual goal of the demand rather than simply reacting to its surface-level claims.

What is the realistic litigation risk?
Texas is home to some of the most active patent litigation venues in the country, including the Western District of Texas. An attorney familiar with how patent cases move through Texas federal courts can give you a realistic assessment of what litigation would look like, how long it would take, and what it would cost compared to a negotiated resolution.

Your Response Options After a Patent Demand Letter

After the initial evaluation, Texas businesses typically have several response options, each with different cost, risk, and timeline implications.

Negotiate a license.
If the patent is valid and your product likely infringes, negotiating a licensing agreement may be the most cost-effective resolution. A license allows you to continue using the technology in exchange for a royalty payment. Your attorney negotiates the license terms, including the royalty rate, the scope of the license, and any representations and warranties the patent holder must make about the patent’s validity and ownership.

Challenge the patent’s validity.
If the patent appears weak, your attorney may recommend filing an inter partes review petition with the USPTO’s Patent Trial and Appeal Board to challenge the patent’s validity before litigation begins or in parallel with it. A successful IPR proceeding can invalidate the patent entirely, eliminating the infringement claim without the cost of full federal court litigation.

Design around the patent.
If your product or process can be modified to avoid the asserted claims while still functioning as intended, designing around the patent is a business solution that eliminates the infringement rather than litigating it. Your attorney evaluates whether design-around options exist and whether they are practical given your product development timeline.

Litigate the claim.
If the infringement claim is weak, the patent is invalid, or the sender’s demands are unreasonable, litigation in federal court may be the right path. Texas federal courts, particularly the Western District of Texas, have experienced patent benches and well-developed procedures for managing patent disputes efficiently. 

An Austin patent litigation lawyer at Baker Law Group, PLLC handles patent infringement defense in the Western District of Texas and throughout Texas federal courts, representing businesses on both sides of patent disputes.

What Not to Do After Receiving a Patent Demand Letter

Several common mistakes made by Texas businesses after receiving a demand letter can seriously damage their legal position before the dispute is even properly evaluated.

Do not make any public statements about the claim. Statements in press releases, social media posts, or public communications about the demand letter can create evidentiary problems and affect investor, customer, and partner relationships. All public communications should be reviewed by counsel before release.

Do not destroy or alter any documents. Once you receive a demand letter you are on notice of potential litigation. Deleting emails, modifying files, or making any changes to potentially relevant records after that point can constitute spoliation of evidence, which carries serious legal consequences separate from the underlying patent claim.

Do not assume the claim is frivolous without an analysis. Even demand letters from patent assertion entities with weak-looking claims can result in expensive litigation if not handled strategically. An informal assessment that the claim seems baseless is not the same as a proper legal analysis of the patent’s validity and the scope of the asserted claims.

Do not negotiate without counsel. Discussing settlement figures, making informal offers, or agreeing to any terms before a proper patent analysis is complete can lock your business into a worse position than you would have been in with proper legal guidance from the start.

A Patent Demand Letter Is a Legal Problem. Treat It Like One From Day One.

The businesses that fare best after receiving a patent demand letter are the ones that treat it seriously from the moment it arrives, preserve their evidence, engage qualified patent litigation counsel immediately, and respond strategically rather than reactively. The businesses that fare worst are the ones that ignore the letter, respond informally, or attempt to handle it without legal guidance.

Baker Law Group, PLLC represents Texas businesses facing patent demand letters and patent infringement claims throughout the state. Our attorneys evaluate the demand, assess the patent, identify your defenses, and develop a response strategy that protects your business and your bottom line.

For patent litigation matters in Texas federal courts nationwide, a patent litigation lawyer at Baker Law Group, PLLC handles patent infringement defense and enforcement for businesses across every federal jurisdiction.

Contact Baker Law Group, PLLC today to schedule a confidential consultation and find out exactly what your options are after receiving a patent demand letter in Texas.