Licensing Flashcards
What is an assignment?
The transfer of all rights to another party.
What is a license?
A transfer of some rights to another but not title.
What is ambiguity?
When a word or phrase has two or more possible meanings
What is vagueness?
When the meaning of the word or phrase is unclear.
What is an “exclusive license”?
When a licensor has “all substantial rights” under the patent.
Can an exclusive license holder sue for past infringement before obtaining a license?
No, only infringement that occurs from the effective date of the license.
Who has standing to sue for patent infringement?
- Patent holders
- Original
- Assignees
- Exclusive Licensees
Can the right to sue for past infringement be granted?
Yes,
Express grant to allow a successor in title to sue for past infringement is allowed.
Abraxis
Can an “exclusive licensee” sue someone for infringement on their own?
Yes,
but only if they possess “all substantial rights” to the patent.
What is a non-exclusive license?
A promise by the licensor not to sue the licensee for using the Patent (other IP).
What is rule 19(b) of Federal Civil Procedure?
Persons Required to be joined if feasible
(1) Required Party. A person who is subject to service of process and whose joinder will not depreive the court of subject-matter jurisdiction must be joined as a party if:
(b) that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person’s absence may:
(i) as a practical matter impair or impede the person’s ability to protect the interest: or
(ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.
Is infringement considered a case or controversy to have constitutional standing?
Yes when,
“The patent owner asserts their rights based on certain identified ongoing or planned activity of another party and that party did not have a license”
MedImmune
Is the offer of a license to a third party a trigger for a declaratory judgment action (DJ)?
Possibly,
If the offer places the third party in “reasonable apprehension” of being sued for infringement by identifying infringing activities.
Is an offer to license a possible infringer the same as a settlement negotiation?
No,
Any license discussions prior to a charge of infringement is not a settlement and is admissable in court.
What are the two characteristics of a royalty base?
- directly related to the licensee’s use of the licensed rights
- should be amendable to reliable accounting and auditing.
What are the two main issues in litigation of royalty bases?
- Vagueness in defining the subject matter that bears royalties
- Uncertainty of the metes and bounds of the defined royalty subject matter
Can royalties extend beyond the end of the patent term?
No but,
- accurals and payment plans that extend beyond the patent term are allowed.
- Brulotte*
What is contra preferentum?
Any ambiguities and vagueness will be interpreted against the drafter.
What is infringement?
When someone without authority makes, uses, offers to sell, or sells, induces others to do the same, any patented invention in the US or imports to the US during the term of the patent.
What is a Trade Secret?
Any formula, pattern, device, compilation of information, program, method technique or process used in one’s business which gives an advantage over competitors and is not generally known.
What is the legal action for trade secrets?
- Common law
- Texas - Criminal Offense of Misappropriation
- Federal Law
- 18 USC 1831-39
How does one protect a trade secret?
Makes reasonable efforts to maintain its secrecy.
What is a Trademark?
Words, names, symbols, or device used to identify and distinguish goods
How are trademarks protected?
State Repositories
- Intrastate commerce triggers rights
Federal Law (15 USC, 18 USC 2320)
- Interstate commerce triggers rights
What is the basis for determining if a Trademark has been violated?
If the offending mark creates a liklihood of confusion in the marketplace
How does one infringe on a copyright?
The infringer is substanially similar to the copyrighted work
- 5th Cir - Finder of Fact must compare the two (expert opinion doesn’t count)
What is a copyright?
An original work (Artistic Expression) reduced to tangible medium
How are copyrights protected
- Federal Law (17 USC, 18 USC 2318-2319)
What is a non-assertion clause?
A covenant not to sue, on the basis of whatever rights they have
- Does not run with the patent (private convenant)
- Can offset a DJ action
What is the burden of proof difference between DJ and Infringement Action?
- DJ
- Potential infringer files
- IP Owner must prove infringement
- Infringement Action
- IP owner files
- Potential infringer must prove no infringement
Can an exclusive license be limiting?
- Term
- Geographic Scope
- Field of Uuse
What is the analysis for standing in an infringement action?
- Is the license granted an “exclusive license”
- Constitutional Rights
- Was the grant of all “substantial rights”
- Prudential Rights
What is the key question regarding Constitutional Standing?
Whether the granted licensee have the right to exclude the defendents from engaging in the infringing activity?
How does one determine “substantially all rights”?
- Has the licensee been granted the right to sue for infringment?
- Exclusive right to make, use, sell products or services
- licensee’s right to sublicense
- reversionary rights to licensor
- licensor’s right to money from sublicensing or infringment
- duration
- licensor right of control of the licensee
- limits on right to assign
Can an exclusive licensee compel the patent owner to join an infringement suit.
Yes,
Infringement actions require all indespensible parties including patent owners and exclusive licensors
Why would one want to join the patent owner and exclusive licensee?
To avoid multiple infringment actions
How long can a license last for a trademark or trade secret?
Indefinately
What is the general purpose for granting a license?
The creation of a business relationship that is mutually beneficial to both parties.
What are some long term issues with licenses
- intentions of the parties may change
- identity of the parties may change
- the rememberance of what the terms and intentions were may disappear
what roles do drafters have in the licensing process?
- memorializing the intentions of the parties
- offering advice on how to accomplish the intentions
- directly negotiating between the parties
How does one determine if “all substantial rights” have been granted.
Look at the terms of the agreement
Can an exclusive licensor have standing to sue?
If the have substantially all of the rights, otherwise they must join the patent owner to the suit.
What types of terms indicate substantially all rights have been conveyed?
- right to sue
- generally dispositive
- no need to specifically designate if an assignment
- right to make, use, and sell products or services under the patent
- the scope of the licensee’s right to sublicense
- the reversionary rights to licensor following termination or expiration of the license
- the right of the licensor to receive a portion of the proceeds from litigating or licensing the patent
- the duration of the license rights
- the ability of the licensor to supervise and control the licensee’s activities
- the obligation of the licensor to continue paying patent maintenance fees
- any limits on the licensee’s right to assign its interests in the patent.
How are continuation-in-part or continuation patents issued after the effective date of the license?
Automatically assigned after issuance
How does a future invention get conveyed?
A clause for “a present assignment of expectant interest”
Will the courts enforce a “expectant interest” clause
The current court precedent is to enforce written clauses.
Can “substantially all” of the rights be granted orally
No, the Federal circuit has held that a grant of “substantially all” rights and a right to sue must be in writing and coincide with the infringment.
Whay is a Grantback license?
A license that requires the licensee to license back any improvements or modifications IP back to the licensor.
What is “rule of reason”?
an agreement or business arrangement that on its face appears to conflict with competition law may be treated as legal if its actual effect is to promote competition or the public welfare and the gains thereby outweigh any anti-competitive impact.
What is the three part “Rule of Reason” Analysis?
- does the agreement under examination, prima facie, reduce or restrain some aspect of competition?
- does the agreement have “pro-competitive” (or other) benefits outweighing the harm?
- is the agreement the least restrictive or anticompetitive way to achieve the benefits or it there a “less restrictive alternative”?
Is it possible to avoid patent exhaustion in vertically fragmented markets?
Yes, by a field of use license
Can a right to sublicense by implied?
No, the right to sublicense must be expressly granted.
Does the right to “make, use, or sell” include any other rights?
Includes the inherent right to have other make the product on their behalf.
What is a compulsory license?
One that is compelled by law.
- Clean Air Act
- Intervenor’s Rights
- Failure to grant an injunction in an infringement suit