• Federal Circuit Issues Major Opinion on Patent Misuse Doctrine In Princo Corp.
  • September 8, 2010
  • Law Firm: Kaye Scholer LLP - New York Office
  • On August 30, 2010, in its en banc decision issued in Princo Corp. v. International Trade Commission, the Federal Circuit arguably narrowed the application of the judicially created doctrine of patent misuse in the licensing context. A finding of patent misuse by the patentee makes the patents-at-issue unenforceable, thus immunizing otherwise infringing conduct. Addressing the question -- whether a patentee that offers to license a patent misuses that patent by inducing a third party not to license its own patented, separate, competitive technology -- the Court concluded that such conduct did not constitute patent misuse. At issue was Philips’ licensing of a package of patents held by various entities, including patents to Philips’ disc-writing technology and a Sony patent related to a separate disc-writing technology. Philips and Sony (and other industry entities) had agreed that the industry standard for creating writable CD-R/RW discs would incorporate the Philips technology, Philips would administer the patent pool license that would be restricted to only implement this standard (the “Orange Book” standard), and allegedly agreed that the alternative Sony technology would not be licensed outside the patent pool, thus preventing development of a potentially competing technology to Philips’ patented technology.