Shenzhen cross-border e-commerce is accused of patent infringement. Lawyer Shen Jinlong discusses how to choose between responding to the lawsuit and settling, and how to estimate the settlement amount range

Conclusion: Don't rush to reconcile after being sued, and don't hold on to it until the end. The core focus is on three things - the stability of the other party's patent, your actual sales and profits, and the cost gap in US litigation. The reasonable settlement amount for most cross-border e-commerce platforms in Shenzhen falls within the range of $8000 to $60000; Cases with pure TRO freezing and low sales volume, often closed for thousands of dollars; Once it reaches the substantive trial of ITC or the local court, it starts at six figures. The selection criteria are: whether the cost of responding to the lawsuit is lower than the loss of the settlement gold processor.

First, clarify which type of paper you received

Many clients encounter it for the first time and mix platform notifications, lawyer letters, and court subpoenas into one thing. The difference is significant. Amazon's infringement complaints go through the platform's internal procedures and do not involve the court; In the District Court lawsuit in the United States, you will receive a summary, and the defense period is usually 21 days after service. If it is a waiver of service, it is extended to 60 days. The biggest headache for sellers is the Temporary Injunction (TRO), which is issued under Rule 65 of the Federal Rules of Civil Procedure. The court can freeze your payment account without you appearing in court, usually for 14 days, and can be extended for another 14 days. The other line is the 337 investigation by the US International Trade Commission (ITC), which does not care about money and prohibits imports. The defense period is even tighter, usually around 20 days. First distinguish which line it is, then talk about money.

The stability of the plaintiff's patent determines your confidence in bargaining

The determination of patent infringement in the United States follows 35 USC § 271, but what can truly defeat the opponent's attack is often the validity of the patent. In practice, we usually recommend that clients do two things first: one is to retrieve the other party's prosecution history to see if they have obtained authorization through restricted claims; The second is to check whether the other party's patent has undergone mutual review (IPR) or post grant review (PGR), and whether the claims have been cut by the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO). If the other party's claims are written in a broad and empty manner, there may be clarity defects in 35 USC § 112. In such cases, the settlement amount can be kept very low because the other party also knows that they may not necessarily win in court. On the other hand, if the other party is a well-known NPE in the industry and the patent has been tested through multiple lawsuits, your bargaining power will be limited. This part of the work usually requires coordinationUS and EU trademark and patent filing page.We will conduct a patent stability search together.

The response period is only 3 months; it can be extended, but it will cost money.

This refers to another type of high-frequency scenario: Office Action for US trademark examination. The most common dead end for cross-border e-commerce is not being sued, but being left unattended after one's trademark application is rejected. The response period for the review opinion issued by USPTO is 3 months, and an extension can be applied for up to 6 months, but the extension fee will be charged according to 37 C.F.R. § 2.62, and the later the extension, the more expensive it will be. If the deadline is missed, the application will be considered abandoned. If you want to revive, you can only reapply, and all previous application dates will be lost. Similarly, the objection procedure of the European Union Intellectual Property Office (EUIPO) has a cooling off period of 2 months, which can be extended to 24 months, but the deadline for objection defense is 2 months and cannot be postponed at will. Many sellers treat trademarks as accessories, resulting in the store being established but the brand being left vacant due to a lack of response. We will monitor these basic programs in our overseas intellectual property services.

How to estimate the settlement amount and provide you with a measurable framework

Don't bargain based on intuition. According to these variables: firstly, your involved sales revenue, not the entire store revenue, is the historical GMV of the link suspected of infringement; Secondly, the profit margin is usually estimated at 15% to 30%; Thirdly, the reasonable royalty fee of the other party, commonly referred to as the Georgia Pacific Fifteen Elements in US courts, is often assumed to be 3% to 8% of sales in practice. Fourth, litigation costs. The US District Court patent case has reached the stage of evidence disclosure, with a median lawyer's fee ranging from $500000 to $2 million, which is the publicly available AIPLA economic investigation caliber. So as long as you show the cost of the other party continuing to fight, they will also have the motivation to accept a reasonable amount of money and leave. A link with pure TRO freeze and monthly sales of several thousand dollars, and a settlement of 8000 to 20000 dollars is a common range; It's not surprising that the monthly sales of a popular product can reach tens of thousands of dollars, with settlement fees ranging from 50000 to 150000 dollars; If the other party has already applied for a Preliminary Injunction, the premium you will have to pay will significantly increase. Note that this interval is the starting point of negotiations, not the verdict.

Under what circumstances should we bear the burden and under what circumstances should we acknowledge compensation

There are three situations worth considering for litigation or even invalidation: first, the other party's patent is clearly unstable, and you have prior art to check; Secondly, there are many sellers who have been sued at the same time, and there is a possibility of joint litigation diluting costs; The third reason is that the other party's asking price is outrageous, exceeding two or three times your involved profits, so there is no economic reason for settlement. On the other hand, if the profit margin of the involved link is already thin and there is not much frozen money in the account, and the other party is a frequent customer of bulk rights protection, quick settlement, account recovery, and store rating preservation are often more cost-effective than a year of litigation. We usually advise clients to calculate a sum of money: settlement fee+new link cost, compared to litigation lawyer fees+risk of cash flow interruption during the freezing period. The latter is often fatal to cross-border e-commerce.

When it comes to reconciliation, don't just talk about money

In the Settlement Agreement, the amount is only a part. The terms to be monitored include: whether the scope of authorization is limited to the patent in question or includes the patent combination of the other party; Does it include a covenant not to sue for the same product in the future; Can the payment schedule be divided into installments; And most importantly, whether the other party cooperates in applying for unfreezing to the platform and court. Many sellers have paid but their accounts are still frozen because the agreement does not clearly state the obligation and timeline for unfreezing. In addition, if the other party is an EU entity, the jurisdiction of the Unified Patent Court (UPC) of the EU should also be considered. The operation of UPC in 2026 is already relatively mature, and if a settlement agreement is only written in the United States, parallel litigation in Europe may still exist. Cross border cases require jurisdiction clauses to be reviewed from one jurisdiction to another.

Can you handle it yourself? When do I have to find a lawyer

Complaints at the platform level can sometimes be resolved by sellers writing their own appeal letters. But as long as there are court documents, TRO, ITC notices, it is not recommended to go to court on your own. The reason is very practical: American litigation has strict procedural deadlines and format requirements, and answering the wrong step may result in a default judgment. At that time, hiring a lawyer would double the cost. When choosing a lawyer, two things to consider: whether you have a registered practicing qualification with the United States Patent and Trademark Office (USPTO), and whether you have experience in handling similar cross-border e-commerce bulk rights protection. There are many local teams in Shenzhen that specialize in this area, but not many can actually handle procedures from both the United States and the European Union at the same time. This is also the reason why we collaborate with multiple jurisdictions in intellectual property legal services in other countries. To understand the specific background of the handling lawyer, you can refer toAttorney Shen Jinlong's Practice Introduction.

Lawyer Shen Jinlong, from Guangdong Zhiming Law Firm's foreign-related intellectual property team, has been handling trademark and patent copyright business in the United States and the European Union for a long time. If you are facing a cross-border e-commerce patent infringement lawsuit, TRO freeze, or platform complaint, you can call the hotline at 0755-25986969 to schedule a communication. We will first help you determine which procedural line the case is on, and then provide advice on whether to respond or settle.

Disclaimer: The content of this article is for general legal information sharing and does not constitute legal advice on any specific case, nor does it establish a lawyer client relationship. The procedural rules and precedents of the United States, the European Union, and various jurisdictions may be adjusted at any time. Please evaluate specific cases separately based on facts and the latest regulations.