Category Archives: Licensing

Court: Patent license extends to continuation patents unless the agreement expressly says otherwise

In another case highlighting why it’s important for license agreements to clearly describe the parties’ intent, the U.S. District Court for the Southern District of New York recently considered a situation where a patent holder granted a third party (licensee) a covenant not to sue under certain patents.  The patent holder later obtained additional patents that were related to the licensed patents as continuations.  In the suit, the patent holder sued the licensee for infringement of the new patents.

The court ruled that the patent holder was not justified in bringing the suit, as the agreement did not expressly exclude continuation patents from the scope of the license.  The court relied on the Federal Circuit’s 2011 decision in Gen. Protecht Group, Inc. v. Leviton Mfg. Co., Inc., which held that “where, as here, continuations issue from parent patents that previously have been licensed as to certain products, it may be presumed that, absent a clear indication of mutual intent to the contrary, those products are impliedly licensed under the continuations as well.”

The S.D.N.Y decision is ICOS Vision Systems N.V. v. Scanner Technologies Corporation, No. 1-10-cv-00604 (S.D.N.Y. Feb. 15, 2012)

Will Twitter’s new “Innovator’s Patent Agreement” be the GPL of patent licensing?

The week Twitter announced a new policy under which it will obtain patent assignments from its employee-inventors.  Unlike most employee invention assignment agreements, in which the employee is required to assign inventions to the employer without restriction as a condition of employment, Twitter’s new policy will restrict what the company can do with the assigned inventions. According to Twitter’s announcement:

It is a commitment from Twitter to our employees that patents can only be used for defensive purposes. We will not use the patents from employees’ inventions in offensive litigation without their permission. What’s more, this control flows with the patents, so if we sold them to others, they could only use them as the inventor intended.

On this basis, Twitter has rolled out what it calls the Innovator’s Patent Agreement (IPA).  Under the IPA,  Twitter agrees that it will not assert Continue reading

Court rules that copyright “first sale” doctrine does not apply to pre-installed software that was licensed to OEMs

In United States copyright law, the “first sale” doctrine allows the purchaser of a lawfully-made copy of a copyrighted work to  transfer the copy by a subsequent sale, rental, or other means.  The first sale doctrine originated in a 1908 Supreme Court decision, and it is codified at 17 U.S.C. 109(d).

In a recent decision from the U.S. District Court for the Northern District of California, the court ruled that the first sale doctrine did not apply to copies of software that are pre-installed on a computer and sold by the original equipment manufacturer with the computer itself.  In Adobe Systems v Hoops Enterprise LLC (N.D. Cal. Feb. 1, 2012), the court considered the case of a company that bought computer hardware from Dell and Hewlett-Packard and resold OEM-installed Adobe software on eBay, separate and apart from the hardware.

The court indicated that the key question was whether the Adobe software was sold or licensed to the OEM computer manufacturers.  If it were a sale, then the first sale doctrine could apply.  However, if it were a license, then the first sale doctrine would not apply based on the precedent of Vernor v. Autodesk, Inc. (9th Cir. 2010).

Adobe did enter into license agreements with the OEMs, but the defendants argued that those agreements did not create significant restrictions on transfer, nor did they impose notable use restrictions, and Adobe did not retain sufficient control over the copies, so the agreements were effectively sale agreements rather than license agreements.  The court disagreed, noting that there were “significant distribution restrictions” in the license agreements.

Penn State University announces IP policy shift; will allow industry ownership of sponsored research

According to a recent report by Keystone Edge,  Penn State University has announced a major shift in its policies relating to research projects that are sponsored by private industry.  Instead of the typical arrangement where the university retains ownership of intellectual property rights resulting from sponsored research, Penn State will entertain proposals in which the industry sponsor will own all intellectual property rights in the research.  The university expects to implement this policy starting in late 2012.

Penn State appears to be the first major research institution to propose such a policy. The university formally considered the proposal in a May 31, 2011 internal memorandum.  Penn State’s Vice President of Research Henry (“Hank”) Foley confirmed the new policy in a recent interview with Keystone Edge.

IAM Licensing 250 Released

Each year Intellectual Asset Management (IAM) magazine publishes the IAM Licensing 250: The World’s Leading Patent and Technology Licensing Practitioners.  This week IAM announced the release of the 2011 edition of the IAM Licensing 250.  According to IAM:

The second edition of a unique guide that names top patent and technology licensing practitioners in 25 key jurisdictions has been released today.  IAM Licensing 250: The World’s Leading Patent and Technology Licensing Practitioners is the only research-based publication that names both lawyers and patent attorneys working in this increasingly important area of legal practice.

In order to find the individuals and firms named today, Intellectual Asset Management (IAM) magazine undertook an extensive four-month research process.  A team of experienced researchers spoke with hundreds of licensing professionals in face-to-face and telephone interviews, as well as via email exchanges. They provided in-depth information on their individual practices, recent work and other firms and individuals that stood out for their expertise in patent and technology licensing in the jurisdictions covered in this publication. The final selection process was based on the comments received.

The IAM Licensing 250 is available on the IAM website via this link.  My law firm (Pepper Hamilton) and I are proud to be profiled in the 2011 edition (available to registered IAM users here.)

Does a patent license include related patents?

According to a recent Federal Circuit decision, the answer is “yes” if the related patent is a continuation of the licensed patent (and so long as the license agreement does not expressly say otherwise).

In General Protecht Group, Inc. v. Leviton Manufacturing Group, Inc. (Fed. Cir. July 8, 2011), the appellants sought to enforce a settlement agreement in which Leviton granted certain companies a covenant not to sue under U.S. Patents 6,246,558 and 6,864,766.  (The patents relate to ground fault circuit interrupters.)  Leviton had filed a complaint with the International Trade Commission (ITC) against the appellants.  The ITC complaint accused the infringers of violating U.S. Patents 7,463,124 and 7,764,151, which are continuations of the patents licensed under the settlement agreement.

The Federal Circuit refused to allow Leviton to proceed, noting that Continue reading

Everyone understands what a “sale” is, right? Well . . .

The shortest contracts often create the largest disputes.  A recent article from Ron Morris of The American Entrepreneur very effectively illustrates what can go awry when two parties rush to sign an agreement.  If the parties have not ensured that the critical terms are clearly defined, costly disagreements can result.  In particular, payment terms – and the conditions that trigger a payment — must be clearly defined to avoid misunderstandings.

For example, in a license agreement the licensor may consider a payment obligation as triggered when the licensee’s customer agrees to purchase a licensed product.   The licensee, however, will want to defer the payment obligation until it actually receives payment from its customer.   Simple terms such as “sale”, “revenues”, or — as Ron notes in his article, “referral” —  can be interpreted very differently depending on what side of the agreement you are on.

Often, contracting parties can avoid issues like this if, before signing, they each ask a third party who is experienced with contracts — a lawyer, a contracts administrator, or another experienced person — to carefully read the agreement and identify terms that can be subject to different interpretations.  The time and expense put into carefully drafting a contract — even a relatively simple one — can avoid much more costly issues down the road.

For the full text of Ron Morris’ article, click here.

US Department of Energy challenge offers energy entrepreneurs $1,000 licenses to national laboratory technology

This week U.S Secretary of Energy Steven Chu announced a new program that is intended to encourage entrepreneurship and new energy technologies.  The Department of Energy owns 17 national laboratories around the country.  Each national laboratory performs research in a broad spectrum of energy-related fields. 

Under the new program, energy entrepreneurs who want access to a DOE national laboratory technology can license up to three national lab patents for $1,000 each.  National laboratory patents are currently available for review in a database that is available on the DOE Technology Transfer Website.   Terms of the license have not yet been released, but the DOE plans to release a streamlined license agreement for all applicants to accept. 

To request a license, applicants must submit a business plan and identify the technology of interest.  The DOE will publish a license application form on its website, and will accept applications May 2 – December 15, 2011.

Update:  Since this post was originally published, the DOE issued a press release clarifying that the $1,000 only covers the up-front fee.  The licensee will still be required to pay royalties based on actual sales.  Royalty amounts and other commercial terms will be determined on a case-by-case basis, although the DOE’s standard license agreement form will simplify the process.  The $1,000 fee represents a discount of $10,000 – $50,000 from the DOE’s typical up-front demand.

Issues to consider when structuring medical device development and license agreements

Physicians often contract with medical device manufacturers to provide services relating to new technologies. For example, the doctor may help the manufacturer develop a new device, or the doctor may help test an existing device.  In the first situation, the physician may assign or license intellectual property to the manufacturer in exhange for payment.  In the second, the physician simply performs consulting services in exchange for a service fee.

In either situation, both parties should ensure that the arrangement complies with applicable laws such as the federal Anti-Kickback Statute and the Stark Act.  My colleague John Jones recently wrote an article on steps that physicans and manufacturers can take to reduce risk in these situations.  As John writes:

The federal Anti-Kickback Statute proscribes . . . remuneration in exchange for a patient referral [in certain situations].  Violations of the Anti-Kickback Statute can result in significant criminal penalties, civil penalties of up to $50,000 for each violation, as well as imprisonment. The primary concern for physician relationships with medical device manufacturers under the Anti-Kickback Statute is whether the compensation paid to the physician constitutes disguised remuneration for referrals.

The article originally appeared in the February 25, 2011 issue of Physicians News Digest, and the full text is also available on the Pepper Hamilton website.

Football and IP

This weekend’s Super Bowl provides an opportunity to review some of the past year’s interesting developments relating to the National Football League and intellectual property:

1.  Titlecraft v. NFL:  wooden Lombardi trophy replicas infringe NFL copyright.

In Titlecraft Inc. v. National Football League (D. Minn. Dec. 20, 2010) the NFL and NFL Properties sued Titlecraft, a manufacturer of custom wooden trophies.  Titlecraft made wooden replicas of the Vince Lombardi trophy.  The Lombardi trophy is a silver statue made by Tiffany & Co. that is awarded to each year’s Super Bowl champion; Titlecraft’s trophies were small wooden replicas that were sold to fantasy football leagues for honoring their own champions. 

Finding that (i) the NFL had a valid copyright registration for the Lombardi trophy; (ii) Titlecraft had access to the Lombardi trophy; and (iii) the two trophies were substantially similar, the court granted summary judgment for copyright infringement in favor of the NFL.  Although Titlecraft pointed to minor differences in size, angles, and texture, the court stated that “‘if it walks like a duck, quacks like a like and looks like a duck, it has got to be a duck’ – or in this case a copy.” 

2.  Who dat say dey gonna own dem trademarks?

When the New Orleans Saints reached the Super Bowl in 2010, the NFL sent cease-and-desist letters to several Louisiana merchants, demanding that they stop selling Continue reading