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The case of the unwritten patent license

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What happens when one company actively induces another company to spend the money needed to develop and make a new product and then after the product becomes the industry standard, sues that company for patent infringement? Should a court enjoin the second company from making the product? That was the question before the court in the recent case of Wang Laboratories vs. Mitsubishi Electronics. The case goes back to 1983, the dawn of the personal computer age. One of Wang's scientists, James Clayton, invented what was to become the basic memory module, now known as a SIMM (single in-line memory module). The Wang case illustrates that patent licenses do not always have to be written. Sometimes, years after the fact, a court can find that a patent owner granted an implied license through its course of conduct. Although such a finding is the exception rather than the rule, purchasers and suppliers of products can avoid the uncertainty of such a court decision by clearly setting forth their positions regarding patents in writing at the beginning of their relationship.

Published in:

IEEE Engineering in Medicine and Biology Magazine  (Volume:16 ,  Issue: 4 )