When Is an "Exclusive License" Not an Exclusive License?


As IP Spotlight points out, in ebs-automotive-v-illinois-tool-works (S.D. Cal. 1/4/11), the court explained that plaintiffs in patent infringement suits fall into three categories for standing purposes:  1) those that can sue in their own name alone; 2) those that can sue as long as the patent owner is joined in the suit; and 3) those that cannot even participate as a party to an infringement suit.

In this case, EBS produced an "exclusive" license and sought compensation for what it thought was obvious infringement.  Unfortunately, their license fit #2 above … it received the license from only one of the joint owners of the IPR. In effect, this meant that EBS could not preclude the missing co-owner from using the patent or licensing the patent to others.   Plaintiff had no right to exclude

We’ve written before about IP ownership issues and the importance of sourcing ownership during due diligence.  Now you have another driver:  if it looks and feels like an exclusive license, does that necessarily mean it is one?


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