JOHN W. SCHLICHER

PATENTS, PATENT LITIGATION, PATENT DISPUTE RESOLUTION AND

SETTLEMENT, LICENSING, ANTITRUST, LAW AND ECONOMICS

 

 

John W. Schlicher, “Patent Licensing, What to Do After MedImmune v. Genentech,” 89 Journal of the Patent and Trademark Office Society 341 (2007)

Table of Contents (partial)

I.         Introduction

II.        Summary

III.      The Decision In MedImmune v. Genentech

IV.       How to Decide Whether to License under Lear and MedImmune, and for What Royalty

A.       Summary of Licensing under Lear and MedImmune

B.        Licensing Unconstrained by Lear

C.        Licensing Constrained by Lear

D. Licensing Constrained by MedImmune

 

A. V.   What Licensees Should Do After MedImmune

B. A.   Define Royalty Obligations Based on Validity

C. B.   Check Existing Licenses for Royalty Obligations Dependent on Validity

D. C.   Decide Whether It Makes Economic Sense to Pursue a MedImmune Claim and Try to Have the Patent Declared Invalid

E. If It Does Make Economic Sense, Pay, Send a Protest Letter, Hope the Patent Owner Responds, and Sue or Negotiate a Royalty Reduction

 

A. VI.           What Patent Owners Should Do After MedImmune

B. What to do if MedImmune Applies Only to Licenses that Create the Contract Issue

1.        Do Not Respond or Respond Carefully to Protest Letters

2.        Define the Payment Obligation without Reference to Validity

3.        Define the Payment Obligation without Reference to the Patent

4.        Deal with Eviction Separately

5.        Define the Products on which Royalties are Payable

B.        What to do if MedImmune Applies to All Licenses

1.        Agreement Not to Challenge Validity

2.        Termination Rights

a.        Patent Owner Termination for Challenge

b.        Patent Owner Cancellation for Challenge

c.        Patent Owner Termination if the Licensee Challenges and Loses

d.        Patent Owner Termination at Will

e.        Licensee Termination before Challenge

3.        Royalty Obligations

a.        License at a Rate Appropriate For a Patent That Is Valid as Between the Parties

b.        License at the Rate Appropriate for a Patent That Is Valid as Between the Parties, and Reimburse a Portion of those Payments so Long as there Is No Challenge

c.        Increase Royalties if the Licensee Challenges and Loses

d.        Increase Royalties if the Licensee Challenges Validity

e.        License at the Rate Appropriate for a Patent That is Valid and Spread Payments over a Specified Period

4.        Litigation Cost Provisions

a.        Require the Licensee to Pay Validity Litigation Costs in All Situations

b.        Require the Licensee to Pay the Patent Owner’s Litigation Costs, Including Attorneys Fees, If the Licensee Challenges and Loses

5.        Other Approaches

a.        License only after Litigation and Settlement

b.        License in Exchange for Products or Licenses rather than Royalties

c.        License Patents only with Know-how or Other Things of Value

d.        Sell the Licensee a Product and Do Not Grant an Express License

e.        Resolve Validity Disputes by Arbitration and After Other Dispute Resolution Procedures

f.         Require the Potential Licensee to Disclose Prior Art before Licensing, and Limit Validity Challenges to Other and Closer Prior Art the Licensee Learns of Later

g.        Grant Licenses only to Companies that Do Not Play This Game

Do Not License, Litigate Infringement Actions

 

VII.     Legislation