Patent License Agreements Research Articles

Seventh Circuit's Sunbeam Decision Offers Long-Awaited Response to Fourth Circuit's Lubrizol: Why the Time Is Right to Revamp Section 365 of the Bankruptcy Code

Nearly four thousand Americans file for bankruptcy every day. Further, for every one person who goes bankrupt, countless others face the inevitable and sometimes devastating reality that the money or obligations they were duly owed by the debtor will never be repaid. These “others,” known as creditors, must look to the Bankruptcy Code (“the Code”) to ascertain what rights they can assert, if any, in an attempt to minimize their damages. Thus, given the indisputable prevalence of bankruptcy in our capitalist system, interpreting the Code is an integral task with widespread implications. This has become abundantly clear in cases dealing with insolvent intellectual property (“IP”) licensors. At the onset of bankruptcy, § 365(a) of the Code permits a trustee to assume or reject any of the debtor’s preexisting executory contracts, subject to court approval. However, courts have become increasingly confused about the effect of rejection when the contract in question is a trademark license agreement, and two questions have emerged: (1) whether these agreements are “executory contracts,” and thus subject to § 365(a) rejection, and (2) if so, whether the rejection of a license agreement constitutes the revocation of the licensee’s continued right to use the license. In 1985, the Fourth Circuit infamously addressed this issue in Lubrizol Enterprises, Inc. v. Richmond Metal Finishers, holding that a licensor-debtor’s rejection of an executory patent license agreement meant the revocation of the licensee’s rights to continue using it. In response to the potentially chilling effects of this interpretation, Congress enacted § 365(n) to the Code as a part of the Intellectual Property Bankruptcy Protection Act of 1988 (“IPBPA”), giving intellectual property licensees the right to continue using their licenses despite rejection. However, the Code’s definition of “intellectual property” did not include trademarks, leading the bankruptcy courts into a state of perplexity regarding the effect of trademark license rejection. Twenty-five years later, the Third Circuit addressed the matter in In re Exide Technologies. There, the majority avoided the effect-of-rejection question by holding that the trademark license at hand was not “executory,” and thus not subject to § 365(a) rejection. In 2012, the Seventh Circuit, in Sunbeam Products, Inc. v. Chicago American Manufacturing, LLC, confronted Lubrizol’s analysis in a trademark license rejection case and held that rejection did not revoke a licensee’s continued rights to use the license, creating a circuit split. By thoroughly examining the reasoning and results in Sunbeam, In re Exide and Lubrizol, as well as the function of § 365(n), two things become clear: rejection should not mean contractual revocation (the Seventh Circuit got this right), and executoriness is irrelevant for the purposes of license rejection analysis. This article proposes that Congress resolve the confusion surrounding the meaning of rejection by eliminating the requirement that contracts be executory in order to be rejected, and making adjustments to the Code that clarify the meaning of rejection. Finally, it proposes that with the implementation of these changes, section 365(n) serves no purpose in the Code, and should be removed.

A Proposal for a License on Transfer (LOT) Agreement

This paper proposes a standardized, networked, royalty-free License-On-Transfer (LOT) patent license agreement. Under the terms of the LOT license, every LOT User agrees that when it transfers a patent, the transferred patent automatically becomes licensed to the other LOT Users existing at the time of the transfer, except (i) transfers that are part of a legitimate spin out or of a Change of Control to a Non-Assertion Entity or (ii) transfers to another LOT User. This structure protects LOT Users from being subject to the extraction of patent rents by the entity (e.g., a patent assertion entity) to which the patent is transferred. The licenses are subject to “defensive termination,” e.g., in the event that a LOT User brings an offensive patent suit against a non-assertion entity to which a patent subject to the LOT has been transferred then, at any time after the institution of the offensive patent suit, the non-assertion entity can terminate the license for the subject patent granted to the LOT licensee bringing the offensive action.

LICENSING AGRICULTURAL INTELLECTUAL PROPERTY: HOW SHOULD PUBLIC R&D INSTITUTIONS IN DEVELOPING COUNTRIES RESPOND?

In the 21st century, licensing is the most common vehicle by which Intellectual Property Rights (IPR), especially for agricultural biotechnology, are transferred from inventors to users. In this paper, we argue that due to the strong association between IPR and agricultural biotechnology, technology transfer (e.g., licensing), needs to be conducted differently for agricultural biotechnology products. We examine two important licensing mechanisms: the patent license and material transfer agreements, and their unique features, and issues associated with their use. And yet, it's important to note that these legal instruments for agricultural biotechnology are contextual, case-specific, and may even be country-specific. We hope that this paper can serve as a starting point for discussion, and/or a guide for public research institutions in developing countries to more effectively use these technology transfer tools. We also present a few case examples that highlight the experiences of other national research institutions in handling these legal mechanisms. Learning from these experiences may help other institutions maximize benefits while minimizing cost and risk under the new context of technology transfer for agricultural innovations.

Simple adaptations to the Templeton model for IVF outcome prediction make it current and clinically useful

What is the validity of the Templeton model (TM) in predicting live birth (LB) for a couple starting an IVF/ICSI cycle? A centre-specific model based on the original predictors of the TM may reach a sufficient level of accuracy to be used in every day practice, with a few simple adaptations. The TM seems the best predictive model of LB in IVF. However, previous validations of the TM suggest a lack of discrimination and calibration which means that it is not used in regular practice. We confirm this finding, and argue that such results are predictable, and essentially due to a strong centre effect. We provide evidence that the TM constitutes a useful reference reflecting a high proportion of the patient-mix effect since the parameters of the model remain invariant among centres, but also across various cultures, countries and types of hospitals. The only difference was the intercept value, interpreted as the measurement of the global performance of one centre, in particular, for a population of reference. The validity of the TM was tested by a retrospective analysis all IVF/ICSI cycles (n = 12 901) in our centre since 2000. All IVF/ICSI cycles were included in the analysis. The model discrimination was evaluated by C-statistics, calculated as the area under the curve of an ROC curve. The TM was then adjusted for our data and additional variables were assessed. Poor calibration and discrimination (C = 0.64) was observed in conformity with previous external validations. Fitting the TM to our centre constituted the first substantial improvement in prediction accuracy of discrimination (C = 0.69) and calibration. We identified an important linear time trend effect and the added value of three other predictors (FSH, smoking habits and BMI) that significantly improved the model (C = 0.71). Bias due to missing data handling was assessed through sensitivity analyses. Neither the TM nor any other models based on some centres are directly applicable to other centres. However, the TM constitutes a useful basis to build an accurate centre-specific model. There were no commercial relationships (i.e. consultancies, patent-licensing agreements) that might pose a conflict of interest in connection with the submitted manuscript. The objective of this research was not directed toward any treatment effects.

Samsung mobile display, universal display announce entry into OLED patent license and supplemental material purchase agreements

Samsung mobile display, universal display announce entry into OLED patent license and supplemental material purchase agreements

Royalty licensing

Most patent licensing agreements observed empirically include either per-unit or ad valorem royalties. The theoretical literature generally focuses on per-unit royalties. We provide a simple justification for the presence of ad valorem royalties in licensing contracts.

Federal Circuit rejects proposition that arbitration agreement 'runs with the patent'

The US Court of Appeals for the Federal Circuit rejected the proposition that an arbitration clause ‘runs with the patent’ when it affirmed the district court's order denying the defendant/licensees' motion to dismiss or stay litigation pending arbitration where the assignee plaintiff was not a signatory to the patent license agreement containing the arbitration clause.

Conflict of interest policy

There has been increased recent attention directed to conflicts of interests and disclosures related to scientific publication in both the medical and lay press. The intention of our AASLD journals is that readers have full access to any potential conflicts of interest that may in theory bias results reported within the journals. Conflict of interest is almost inevitable given the many influences that individual investigators will feel from a variety of funding sources and regulatory bodies. A policy that excluded publication of any works in which a potential conflict existed would unnecessarily limit development in the field and would preclude the readers from being exposed to important new discoveries. Our intent is to provide transparency for the reader so that they can best decide for themselves whether meaningful conflict of interest exists. In cases in which there is patent conflict of interest in presentation of biased results, the editors will reserve the right to exclude such papers from being published. The Journals of the American Association for the Study of Liver Disease, HEPATOLOGY and Liver Transplantation, have developed a joint policy of conflict of interest and disclosures for these publications. Our policies which are comparable to those recently published in the Journal of the American Medical Association, required that all authors of all manuscripts report complete disclosures within the past 5 years and those that may potentially become conflicts such as employment, consultancy, honoraria, stock ownership, grants or royalties; report detailed information regarding financial and material support for the specific research and work being published including grant support and funding sources, or other contributions; report in the acknowledgment section writers, statisticians, or any others involved in data management; all authors complete and sign an authorship responsibility form; and that in industry supported studies, authors must attest that they had full access to all the data and take responsibility for the integrity and accuracy of the data analysis. Studies analyzed by statisticians employed by the company must have independent confirmation of the validity of the results by independent statisticians. Authors submitting to the AASLD journals must provide this information. The information must appear on the title page with full disclosure of funding sources and all potential conflicts must be disclosed. The following statements occur in the Instruction to Authors: Please disclose all financial arrangements within the past two years, including consultancies, stock ownership, equity interest, patent-licensing agreements, research support, major honoraria, etc. you have with a company whose product figures prominently in the manuscript you are submitting, sending a letter to the editor, or providing an editorial. Please provide the same information for similar relationships with a company making a competing product to that which is featured in the manuscript. If the Editor finds that such activities raise the appearance of a conflict, he may recommend disclosure in a footnote. Otherwise, the information will remain confidential. A description of any commercial affiliation or consultancy of an author that could be construed as a conflict of interest (this information will be kept confidential unless the Editor recommends disclosure in a footnote if an appearance of a conflict is perceived). An author agreement signed by every contributing author. It is assumed, however, that the corresponding author speaks for his or her coauthors and certifies that all listed authors participated meaningfully in the study and that they have seen and approved the final manuscript. It is our intent that this policy will help clarify conflict of interest policy for these journals, which is in alignment with other major medical journals and to help ensure that the potential conflict of interest for work published in these journals is transparently accessible to the reader.

Choosing Intellectual Protection: Imitation, Patent Strength and Licensing

Patents are probabilistic rights. We set up a multi-stage model in which choosing between patent and trade secrecy is affected by three parameters : the patent strength defined as the probability that the right is upheld by the court, the cost of imitating a patented innovation relative to the cost of imitating a secret innovation, and the innovation size defined as the magnitude of the cost reduction. The choice of the protection regime is the result of two effects: the damage effect evaluated under the unjust enrichment doctrine and the effect of market competition that occurs under the shadow of infringement. We find that large innovations are likely to be kept secret whereas small innovations are always patented. Furthermore, medium innovations are patented only when patent strength is sufficiently high. Finally, we investigate a class of patent licensing agreements used to settle patent disputes between patent holders and their competitors.

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

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).

Document: Commission Regulation (EEC) No. 2349/84 of 23 July 1984 on the application of Article 85 (3) of the Treaty to certain categories of patent licensing agreements

<i>Document</i>: Commission Regulation (EEC) No. 2349/84 of 23 July 1984 on the application of Article 85 (3) of the Treaty to certain categories of patent licensing agreements

Persuasion or Information? The Economics of Prescription Drug Advertising

THE economic and welfare effects of advertising have been extensively studied over the last half-century. However, these efforts have not led to a consensus either as to the effects or the value of advertising. Economists continue to reach polar conclusions that appear to be derived mainly from preconceptions of the social desirability of advertising. On the one hand is research that emphasizes promotion's ability to create "artificial" product differentiation and thereby produce informational confusion.1 This line of research stresses the empirical association of extensive advertising with high concentration and high accounting profits-evidence judged to support increased market power and entry barrier effects.2 A contrary body of research emphasizes the value of advertising in providing information and, hence, in promoting competition.3 The empirical findings most consistent with this view are that prices paid by consumers in (selected) markets are lower with advertising than without it.4

The Validity of Grant-Back Clauses in Patent Licensing Agreements

The Validity of Grant-Back Clauses in Patent Licensing Agreements

The Present Status of Exclusive Patent Licensing Agreements in Relation to the Rules of Competition of the Eec, As Indicated by Four Recent Decisions of the Eec Commission

The Present Status of Exclusive Patent Licensing Agreements in Relation to the Rules of Competition of the Eec, As Indicated by Four Recent Decisions of the Eec Commission

Justice attacks wording in patent license agreements

Justice attacks wording in patent license agreements

Article 36 in Relation to Article 85 and Patent Licensing Agreements

Article 36 in Relation to Article 85 and Patent Licensing Agreements

European Economic Community Communiqués on Exclusive Representation Contracts and Patent License Agreements

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Communiques of the Commission of the European Economic Community Relating to Exclusive Dealership Agreements and Patent License Agreements, November 9, 1962

Communiques of the Commission of the European Economic Community Relating to Exclusive Dealership Agreements and Patent License Agreements, November 9, 1962

Taxation. Taxability to Non-Domiciliary of Income Arising from Patent License Agreement

Taxation. Taxability to Non-Domiciliary of Income Arising from Patent License Agreement

International Relations in the Sound Picture Field

The motion picture industry has passed through approximately three decades of growth—the first twenty years represented a period of continuous litigation over patent rights and licensing agreements. The next ten years, which would take us up to the entrance of sound pictures, was a period of tremendous expansion and growth unfettered by injunctions or restrictions.