5 Things Every Retailer Should Consider When Threatened With Patent Infringement: 5-Item Checklist

Introduction

In recent years major Canadian retailers have been named as defendants in patent infringement lawsuits, including Wal-Mart (T-1841-11), Costco (T-1841-11), Canadian Tire (T-1002-12) and Home Depot (T-1112-13).  The common thread linking these and other cases is that the plaintiff is asserting patent rights against a retailer that sells, but does not manufacture, allegedly infringing products in its stores.

Indemnity agreements between retailers and manufacturers who supply product are common.  However, such agreements may not provide retailers with sufficient protection.  Plaintiffs will often pursue retailers because they are more likely to satisfy a judgment than manufacturers.  Sometimes, plaintiffs do not even know the manufacturer's identity.  Even the best indemnities amount only to a contractual right to sue for losses, which may have limited value in the event that the manufacturer cannot cover the retailer's losses or where the manufacturer's