Nonexclusive Patent Licensees Unite: Use Bankruptcy Committees to Sue for Patent Infringement

Abstract

2. See Stuart P. Meyer, Exploiting Intellectual Property Assets Through Licensing: Strategic Considerations, in PROTECTING YOUR INTELLECTUAL PROPERTY: HOW TO VALUE, MAXIMIZE AND ENHANCE YOUR ASSETS 29, 34 (PLI Patents Series No. 468, 1997) (noting that most common type of license is a non-exclusive license). 3. For example, in 1994, IBM earned $640 million from patent and technology licensing agreements. See Peter C. Grindley & David J. Teece, Managing Intellectual Capital: Licensing and Cross-Licensing in Semiconductors and Electronics, CAL. MGMT. REV., Winter 1997, at 8, 14. An active licensing strategy instituted in 1985 by Texas Instruments resulted in cumulative royalty earnings of over $1.8 billion between 1986 and 1993. See id. at 20. Hoping to offset skyrocketing R&D and technology development costs, Dow Chemical, a company known for its reluctance to license new technology, recently decided to pursue an active licensing strategy. David Rotman & Alex Scott, Turning Process Know-How into Profits, CHEMICAL WK., July 23, 1997, at 45, 45. Dow hopes that this licensing business will generate annual revenues of $100 million by the year 2000. See id. Chemical giants Monsanto and DuPont also have begun to reconsider their aversion to licensing. See id. In fact, DuPont has set a licensing revenue target of $100 million by the year 2005. See id. Even chemical companies with well-established licensing programs have decided to increase their emphasis on licensing. See id. at 45-46. It is relatively safe to assume that the licenses underlying these royalty streams are nonexclusive since the licensor-companies would want to maintain the ability to utilize their licensed technology. See George E. Frost, General Motors' Approach to Licensing, in 2 THE LAW AND BUSINESS OF LICENSING 734.663, 734.665 (Marcus B. Finnegan & Robert Goldscheider eds., 1980) (noting that General Motors employs a nonexclusive licensing strategy because it simply cannot afford to license away [its] own right to use [its] own invention).