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The value of promises and estoppel defences

Revision as of 23:35, 24 January 2013 by Ciaran (talk | contribs) (==US courts on promises== According to the US CAFC, a promise is a licence; and they back this up with a ruling from the US Supreme Court. Here's an excerpt from the CAFC's ruling:<ref>{{cit)

This page collects info about the legal situation when a patent holder won't provide a blanket licence but instead makes a "promise".

In summary, in the US, a promise may have the same value as a licence, and "estoppel" could be invoked as a plan B in some situations. For other countries, we're still looking for info.

US courts on promises

According to the US CAFC, a promise is a licence; and they back this up with a ruling from the US Supreme Court. Here's an excerpt from the CAFC's ruling:[1]

"[A] license ... [is] a mere waiver of the right to sue by the patentee." De Forest Radio Tel. & Tel. Co. v. United States, 273 U.S. 236, 242 (1927). A license need not be a formal grant, but is instead a "consent[ ] to [the] use of the patent in making or using it, or selling it ... and a defense to an action for a tort." Id. The Court of Appeals for the Federal Circuit explained that the inquiry focuses on what the agreement authorizes, not whether the language is couched in terms of a license or a covenant not to sue; effectively the two are equivalent. TransCore, LP v. Elec. Transaction Consultants Corp., 563 F.3d 1271 (Fed. Cir. 2009).

Estoppel

Some say that "estoppel", in US law, would make patent promises valid even after sale of the patent to another company.

This question is often asked about Microsoft's patents on .Net and C#. Microsoft gives a promise not to sue, but the promise says: "This is a personal promise directly from Microsoft to you".

The following is a quote from the SFLC audio show. The two lawyers were talking about copyright and the public domain, not patents, so the context might be different for patents. With that said:

Aaron Williamson: ...estoppel is an equitable defence which basically says it would not be fair to assert or to find infringement in this case. ...or to, essentially, find damages or whatever. So it's not... estoppel is typically up to the court to, sort of, weigh the fairness of the situation, and it's not... it, sort of, changes case by case.
Karen Sandler: Yeh, it's not necessarily that... It's just a defence, is the thing. So you don't necessarily want to wind up relying on estoppel, but it is an effective thing to talk about, and we do talk about it a lot, and rely on it somewhat, but it's just a matter of... In part it's just, you can think about it sort of as like a fairness argument...[2]

Laches

Another related equitable defence which exists in some countries is "laches".

If an alleged infringer can show that the patent holder has harmed the alleged infringer by waiting to assert a patent, the patent holder's claims for back damages are estopped by laches, and the alleged infringer is not liable. But unfortunately, this is not easy to show in court, and the patent holder can still seek an injunction.

In the case A.C. Aukerman Co. v. R.L. Chaides Construction Co., heard by the CAFC en banc, the court ruled:[3]

1. Laches is cognizable under 35 U.S.C. 282 (1988) as an equitable defense to a claim for patent infringement.

2. Where the defense of laches is established, the patentee's claim for damages prior to suit may be barred.

3. Two elements underlie the defense of laches: (a) the patentee's delay in bringing suit was unreasonable and inexcusable, and (b) the alleged infringer suffered material prejudice attributable to the delay. The district court should consider these factors and all of the evidence and other circumstances to determine whether equity should intercede to bar pre-filing damages.

4. A presumption of laches arises where a patentee delays bringing suit for more than six years after the date the patentee knew or should have known of the alleged infringer's activity.

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External links

References