Tuesday, January 7, 2014

Aggregate Enforcement of Individually Unlicensable or Unassertable Patents is not Misuse

The court granted plaintiff's motion to dismiss defendant's patent misuse defense that was based on plaintiff's conduct as a "patent assertion entity" with over 80,000 patents and 2,000 "shell companies." "[Defendant's] theory of patent misuse is not that [plaintiff] has demanded concessions beyond the monopoly power created by an enforceable patent, such as demanding illegal product tying arrangements in unpatented goods or requiring licensing fees after the expiration date of its patents. . . . Rather, [defendant] is claiming that [plaintiff] is engaging in patent misuse by attempting to enforce, in the aggregate, patents that individually, or in limited numbers, would not likely be asserted or licensed. But even were [plaintiff] requiring, by way of settlement, the licensing of its entire portfolio of patents, as [defendant] seems to allege, that policy would not appear to constitute patent misuse. . . . Although [defendant] stresses that [plaintiff's] actions must be viewed in the aggregate, its patent misuse defense . . . essentially rests on its allegation that [plaintiff] credibly threatens to enforce, in piecemeal fashion, 'thousands of patents in a never-ending series of costly and disruptive patent infringement law suits.' That allegation, however, even were it supported by facts, does not establish that [plaintiff] has or will attempt to enforce its patents beyond their temporal or physical scope."

Intellectual Ventures I LLC et. al. v. Capital One Financial Corporation et. al., 1-13-cv-00740 (VAED December 18, 2013, Order) (Trenga, J.)

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