Patent Law Practice Center

Institute Live Blog: Hidden Risks of Patent License Agreements

Next up is Peter Brown of Baker Hostetler discussing critical pitfalls in Intellectual Property Licenses.

Sublicense v. Valid Exercise of Rights Under License Agreement

• – Licensees may be in violation of the license agreement if they enter into agreements with third parties that effectively equal a sublicense
• – Courts will look at the nature of the relationship between the parties to determine whether a sublicense exists (E.I. du Pont de Nemours and Co. v. Shell Oil Co.,498 A.2d 1108, Court held arrangement equals sublicense).
• – Implied Licenses – parties should explicitly state all of the rights that are included in a license or state those that are not included in the license or disclaim any implied licenses.  Certain rights may be implied by the circumstances, even though not explicitly stated where without the implied right, the license would not benefit the licensee. (Met-Coil Systems Corp v. Korners, Unltd.803 F.2d 684 , Court held that unrestricted sales of a machine useful only in performing the claimed process & producing the claimed product plainly indicates that the grant of a license should be inferred) (more…)