Intel Corp v. Negotiated Data Solutions, No. 2011–1448 (Fed. Cir., December 17, 2012).
In June, 1976, Intel and National Semiconductor entered into a patent cross-licensing agreement that gave Intel “non-exclusive, non-transferrable, royalty-free, world-wide licenses under National’s patents and applications for the life or lives of the patents.” In 1998, National assigned several of the patents listed in the cross-licensing agreement to Vertical Networks, Inc. (“Vertical”), a corporation formed by former National engineers. Between 1998 and 1999 Vertical filed broadening reissue applications with the USPTO for three of the originally licensed patents. Vertical later assigned its originally licensed patents and reissue applications to Negotiated Data. In 2005 and 2006, after the original agreement between Intel and National had expired, the three reissue applications matured into patents.
In December, 2006, Negotiated Data sued Dell, Inc. (“Dell”), one of Intel's customers, in the United States District Court for the Eastern District of Texas, alleging infringement of several patents, including its three reissue patents. Intel intervened, and in August, 2008, filed a complaint seeking a declaratory judgment that Intel and its customers are licensed to the National Patents and all reissue patents owned by Negotiated Data that are derived from any of the National Patents. The district court agreed with Intel, finding that the intent of the originally contracting parties was “to grant broad rights to all patents owned or controlled by the other party for the life of the patents and avoid future infringement suits.” The district court found that Negotiated Data’s assertion with respect to its reissued patents “would allow a party to effectively revoke the Agreement by putting a patent into broadening reissue.”
The Fed. Circuit affirmed the district court decision, concluding that “the original cross-license agreement evinces an intent on the part of the parties that reissue patents should be treated as National Patents under the Agreement.” In support of this conclusion, the court pointed to two critical factors. First, the license agreement is without limitation and without reference to any specific patent 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.
Second, the language of the reissue statute, Section 251, reads in part that “the Commissioner shall, on the surrender of such [defective] patent, reissue the patent for the invention disclosed in the original patent, and in accordance with a new and amended application, for the unexpired part of the term of the original patent.” Thus, the text of § 251 suggests that—in the absence of contrary language in a licensing agreement—a license under the patent that is not directed to any specific claims, field of use, or other limited right will extend to the invention disclosed in the licensed patents.