A license that expressly covers only particular patents may impliedly cover only continuations of those patents.

A patentee brought an action for infringement of patents relating to a pharmaceutical product. Before the patents-in-suit were issued, the patentee had sued the same two parties for infringement of differentearlier patents relating to the same pharmaceutical product. The earlier patents and the patents-in-suit claimed priority to certain provisional applications, and one provisional application was common to all of the patents. To resolve the earlier suit, the patentee granted a license to each party, along with a covenant not to sue. The patentee moved for a preliminary injection of infringement by the parties.

In this action, the district court denied the patentee’s motion for a preliminary injunction. In that court’s view, it would be “highly unfair and unjust” if these new patents could bar the accused infringers from the marketing activity they had already begun to undertake. Accordingly, the court found that the patentee was estopped by the prior license agreement.

The Federal Circuit reversed. To begin, the court held that the patentee had not expressly licensed the new patents. The text of the prior agreements was clear; they only covered patents that claimed priority to a licensed patent. Second, the court held that the patentee had not impliedly licensed the later granted patents. The court distinguished its decisions in TransCore v. Electronic Transaction Consultants and its progeny, which held only that “a license or a covenant not to sue enumerating specific patents may legally estop the patentee from asserting continuations of the licensed patents in the absence of mutual intent to the contrary” (emphasis in original). Because none of the asserted patents were continuations of the licensed patents, they were not covered by the prior agreement and the court was unwilling to “insert [itself] into that bargain and rewrite the contract.”

Judge Dyk dissented in part. He read TransCore and its progeny more broadly, finding “no meaningful distinction” between the provisional patent relationships here and the continuation relationships of the earlier cases. He noted that a patent claiming priority to a provisional application must cover the same inventive subject matter as that provisional application. Because all patents covered the same inventive subject matter, the new patents were presumed to be impliedly licensed. For one accused infringer, however, this presumption was rebutted because the infringer had become aware of the new patent applications, but unsuccessfully sought to include them in the earlier license.

A copy of decision can be found here.