Monday, April 22, 2013

Invalidity Counterclaims Not Barred by Prior (Non-Settlement) Agreement Not to Challenge Validity

The court denied plaintiff's motion for summary judgment that defendant was estopped from asserting its invalidity counterclaims by the parties' prior agreements. "[Plaintiff] contends that [defendant] is contractually estopped from asserting the invalidity claims because [it] explicitly promised not to challenge the validity of [plaintiff's] patents in both the Development Agreement and the License Agreement. . . . In Lear, Inc. v. Adkins, 395 U.S. 653, 670 (1969), the Supreme Court held that a licensee was not estopped, by virtue of the license, from challenging the validity of a related patent. . . . [B]ecause the concerns about enforcing settlement agreements are not present in this case, the Court finds that [defendant] is not contractually estopped from challenging the validity of the [plaintiff's] patents. Indeed, if avoiding the effect of Lear were so simple, all but an incompetent patent lawyer would draft a contractual waiver, thus eviscerating the policy considerations under Lear with a few key strokes."

Biocell Technology LLC v. Arthro-7 Inc., et. al., 8-12-cv-00516 (CACD April 18, 2013, Order) (Selna, J.).

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