By Matthew C. Phillips and Kevin B. Laurence of Stoel Rives LLP
Kevin Laurence and Matt Phillips teach a multi-day course for the Patent Resources Group on reexamination and review proceedings.
Passage of the Patent Reform Act of 2011 (a.k.a. the Leahy-Smith America Invents Act) transforms the landscape for validity challenges. The new landscape includes ex parte reexamination, inter partes reexamination (until phased out), post-grant review and inter partes review, which will replace inter partes reexamination. This article discusses considerations for license and settlement agreements in relation to these proceedings.
LICENSING PRIOR TO LITIGATION OR POST-GRANT PROCEEDINGS
Under the so-called Lear doctrine, which the Supreme Court originated in Lear, Inc. v. Adkins,1 a patent licensee can challenge the validity of the licensed patent. A licensor seeking to draft around the Lear doctrine can utilize various contractual solutions,2 as summarized below:
- Notice clause: requires that a licensee provide, within a specific time period, the licensor with copies of prior art that will be used to challenge the validity of the patent;
- Forum-selection clause: limits a challenge to a particular district court, the ITC, or the Patent Office;
- Royalty-escalation clause: upwardly adjusts the royalty rate during a challenge and/or if the licensee fails in ...