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les Nouvelles - December 2008


Recent U.S. Decisions And Developments Affecting Licensing - December 2008

Brian Brunsvold

Finnegan, Henderson, Farabow, Garrett & Dunner, LL, Attorney, Washington, D.C., USA

John Paul

Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, Attorney, Washington, D.C., USA

LICENSEE CONTI NUES TO ENJOY LICENSE EVEN AFTER SPLIT FROM PARENT CORPORATION BECAUSE LICENSE CONTAINED NO TERMINATION PROVISION

In some circumstances, a licensor may intend for a license to continue for the life of the patent. Nonetheless, when writing a license agreement, it is important to consider other changes in circumstances in which a licensor ma wish to terminate the license agreement earlier. In Orion IP, LLC. V. Mercedes-Benz USA, LLC., Civil No. 607-451 (E.D. Tex. May 30, 2008), the United States District Court for the Eastern District of Texas found in favor of the licensee, Mercedes-Benz USA (“MBUSA”), holding that it was still entitled to a license even after splitting from the patent corporation that originally signed the license agreement.

This case involves a settlement agreement signed to end litigation between Orion, LLC. and DaimlerChrysler Corporation. When the agreement was signed, DaimlerChrysler Corporation was the parent corporation of Mercedes-Benz USA. In the settlement agreement, Orion granted a nonexclusive, nontransferable, royalty-free, fully paid-up, worldwide license to DaimlerChrysler Corporation (“DCC”) and all DCC Related Companies. The agreement specifically stated that “DCC Related companies shall include, by way of example but not limitation, Mercedes-Benz USA, LLC.”

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