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Heightened Due Diligence By Licensees?

Kei Konishi

Nichi-ei International Patent Firm, Partner, Patent Attorney, Tokyo, Japan

Many companies are well aware of the value of patent licensing. The exclusivity of patents requires companies that want to produce or sell their products which are covered by another’s patent to obtain patent licenses from the patentees. It is, however, not surprising for a licensed patent to later be found to be irrelevant to the licensee’s product, which raises a dispute between the licensee and the licensor. What if a licensed patent is invalidated or a licensee’s product is found to be outside the scope of the licensed patent in later years? May a licensee seek monetary relief when a licensed patent is later found useless for operating its business? The Intellectual Property High Court (IP High Court) recently rendered a landmark decision addressing these issues in favor of not licensees but licensors in the “Pebble Bed Bath” Case, 2008 (Ne) o. 10070 (decided on January 28, 2009).

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