Broad Grant of Patent Rights Includes Reissues

The Federal Circuit has upheld Intel’s licensing defense where asserted reissue patents issued after the relevant license agreement was terminated.  Intel Corp v. Negotiated Data Solutions, No. 2011-1448 (Fed. Cir. Dec. 17, 2012).

Intel and National Semiconductor entered into a broad patent cross-licensing agreement in 1976.  Under that agreement, National licensed to Intel patents including the following:

all classes or types of patents and utility models of all countries of the world, applications for which have a first effective filing date in any country prior to the date of expiration or termination of this Agreement, in respect of which, as of the EFFECTIVE DATE, or thereafter during the term of this Agreement, NATIONAL owns or controls . . . [or has] the right to grant licenses of the scope granted herein . . . .

National subsequently assigned certain patents to a third party.  After filing the reissue applications at issue here, the third party in turn assigned the patents, and rights in the reissue applications, to N-Data.  The reissue applications then issued in 2005 and 2006, well after the cross-licensing agreement had expired.

Intel intervened after N-Data sued Intel’s customers.  Among other things, Intel sought a declaratory judgment that it and its customers were licensed to use the reissue patents derived from the originally issued patents.  N-Data argued that that the reissue patents were a separate set of rights that could not be covered by the cross-licensing agreement because the agreement had expired by the time the reissue patents issued.  The District Court agreed with Intel, as did the Federal Circuit.

First considering 35 U.S.C. § 252, which describes the “Effect of Reissue,” the Federal Circuit rejected Intel’s argument that “when a cause of action arises after reissue, § 252 provides that the reissue patent takes the place of the original patent nunc pro tunc, as if the reissued patent had been issued at the time of, and instead of, the original.”  This argument ignored the doctrine of intervening rights, set forth in the statute.  The Court further rejected Intel’s comparison of reissue patents to certificates of correction, which are subject to different standards than reissues.

Therefore, the Court analyzed whether, under California law, the license could be interpreted to extend to the reissue patents.  The Federal Circuit agreed with the District Court that “the key question in this case is not whether the Reissue Patents are National Patents under the definition set forth in the Agreement, but whether the Agreement evinces an intent on the part of the parties that Reissue Patents should be treated as National Patents under the Agreement.”  The Court held that the agreement did evince such an intent.

The reissue statute in effect at the time of the agreement clearly contemplated that reissue patents covered “the invention disclosed in the original patent.”  Given the broad language of the license, a licensee would have reasonably expected that reissues were included in the license grant.  The Court concluded that, although the agreement

does not explicitly discuss reissue patents, . . . the grant of license under the National Patents is without limitation and without reference to any specific claims. The Agreement thus evinces the parties’ intent that the license so granted extend not only to the claims then in existence but also to the full scope of any coverage available by way of reissue for the invention disclosed. To interpret the Agreement otherwise would allow the unilateral act of the licensor to place the licensee, which sought to eliminate any infringement risk and effect a global peace with the licensor for all claims in all patents, in a position of being exposed to further risk relating to the exact same inventions that were subject to the license.

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