November 23, 2014

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November 21, 2014

Patent Licenses Extend to Reissue Patents Unless Specifically Limited

Addressing the scope of a license agreement, the U.S. Court of Appeals for the Federal Circuit affirmed a district court’s grant of summary judgment that a license precluded patent infringement allegations, finding that certain reissued patents fell within the scope of a licensing agreement that did not mention reissue patents.  Intel Corp. v. Negotiated Data Solutions, Case No. 11-1448 (Fed. Cir., Dec. 17, 2012) (Linn, J.).

In 1976 Intel and National Semiconductor Corp. (National) entered into an agreement involving the cross-licensing of various patents relating to semiconductor technology.  By 2006, after the agreement had expired, three of National’s patents falling within the scope of the agreement had reissued and were assigned to National’s successor in interest, Negotiated Data Solutions LLC (N-Data).  N-Data then sued Dell, Inc., one of Intel’s customers, alleging infringement of several patents, including the reissued patents.  Intel intervened in N-Data’s suit against Dell and, in 2008, filed a complaint seeking a declaratory judgment that under the agreement Intel and its customers retained a license not only to the patents defined in the agreement but any reissued patents derived therefrom. 

The issue on appeal was whether the agreement that licensed various National patents to Intel extended to cover any reissue patents derived from the expressly licensed patent.  N-Data argued that the agreement covered only the patents issued directly to National during the term of the agreement and should not extend to the reissued patents since they were issued directly to N-Data after the agreement had expired.  Based on the statutory language of 35 U.S.C. § 251, and the parties’ mutual intent in contracting under the agreement, the Federal Circuit rejected this argument.

The Federal Circuit explained that § 251 does not refer to issuance of “a” reissue patent for “an” invention, but instead refers to reissue of “the” inoperative or invalid patent for “the” invention disclosed in the original patent.  Thus, absent any language to the contrary, the Court concluded that a license for a patent that is not directed to any specific claims, field of use or other limited right will extend to the invention that is the subject of that patent and any reissue patents derived therefrom. 

In the present case, the agreement did not discuss reissue patents nor place any limitations on the patent licenses with reference to any specific claims.  Accordingly, the Federal Circuit concluded that the agreement manifested the parties’ intent that the license extended not only to the claims in existence at the time of the agreement but also to the full scope of any coverage available by way of reissue for the invention disclosed.  Supporting this conclusion, the Court reasoned that “[t]o interpret the [a]greement otherwise would allow the unilateral act of the licensor to place the licensee, which sought to eliminate any infringement risk and effect a global peace with the licensor for all claims in all patents, in a position of being exposed to further risk relating to the exact same inventions that were subject to the license.”

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