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No-Challenge Clauses after Rates v. Speakeasy Andrew J. Wu

No-Challenge Clauses after Rates v. Speakeasy Andrew J. Wu. AIPLA Annual Meeting October 26, 2012. Other Possible Fact Patterns . What if patent validity has been extensively addressed in pre-litigation negotiations? What if the patent’s validity has previously been confirmed in litigation?

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No-Challenge Clauses after Rates v. Speakeasy Andrew J. Wu

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  1. No-Challenge Clauses after Rates v. SpeakeasyAndrew J. Wu AIPLA Annual Meeting October 26, 2012

  2. Other Possible Fact Patterns • What if patent validity has been extensively addressed in pre-litigation negotiations? • What if the patent’s validity has previously been confirmed in litigation? • What if patent validity is being litigated against a different infringer at the time of the license?

  3. Implications of Rates • Increased risk of litigation increases license fees required by Licensors • More lawsuits in the court system • Inefficient lawsuits (i.e., lawsuits that could have been avoided by contract provisions) • Lower risk of license fees paid for invalid patents

  4. Other possible license provisions • In exchange for discounted license fee, if Licensee challenges validity, Licensee pays • additional fee • Licensor’s litigation costs • If Licensee intends to challenge validity, Licensee must provide 90-days notice to Licensor, identify prior art, etc. • If Licensee wishes to challenge validity, Licensee must identify prior art and participate in mediation / arbitration • Validity may only challenge validity through reexamination • Licensor may terminate if Licensee challenges validity • Combinations of the above

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