Home -> Law Blog Directory -> Intellectual Property Law Blogs -> FileWrapper

Intellectual Property Law

: FileWrapper

In license agreement, right to "have made" implicitly granted with right to make

By McKee, Voorhees & Sease, P.L.C.

In a recent decision, the Federal Circuit affirmed a district court's dismissal of a patent licensor's claims for breach of a license agreement and patent infringement. The non-exclusive licensee arranged to have third parties manufacture the licensed product, but the product was sold by the licensee. The patent owner argued this was a breach of the license because the license stated the only rights granted were the rights to "make, use, and sell," with all rights not explicitly granted reserved to the patent owner. The district court held this language did not prevent the licensee from having a third party make the product, because the grant of the right to make implicitly grants the right to "have made."

The Federal Circuit affirmed. The court noted the controlling authority on point was a 1964 Court of Claims case, Carey v. United States. There, the Court of Claims held the right to "make" includes the right to engage others to do all of the work connected with its production absent express language to the contrary. Here, the Federal Circuit held because such a right is implicitly granted, the reservation of rights did not prevent the "have made" rights from being granted. As a result, utilizing a third party manufacturer did not constitute a breach of the license agreement such that the licensee may be subject to an infringement action, and the Federal Circuit affirmed the district court's dismissal of the case.

More detail on Corebrace, LLC v. Star Seismic, LLC after the jump.

[More]

Full post as published by FileWrapper on June 15, 2009 (boomark / email).