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Scope of Licensed Patent Rights

It has been suggested that we include additional statements or warnings in the patent preamble relating to the scope of the patent license grant. For example, such a statement might say:

"Potential licensees are advised to conduct their own due diligence to ensure that they have licensed or bargained for all rights necessary from the patent owner to practice an invention. Licensees should be careful to note that the definition of Licensed Patent Rights does not necessarily include, in addition to the listed patents and patent applications, all other related patents and patent applications necessary to practice the invention, but only certain categories of related patents such as continuations or divisionals of the listed patents and patent applications. Thus, for example, the patent owner may hold other dominant patents which are not included in these rights unless specifically listed."

This statement would warn licensors of the need to conduct due diligence and not to assume that the patent owner has licensed or included all necessary rights to practice an invention. The definition of Licensed Patent Rights generally includes so-called "daughter" or "sister" applications: divisionals, continuations, continuations-in-part (to the extent covering the same inventions), and foreign filings. Some commentators have pointed out that these daughter applications should be included by default because they may be unpublished (and in the process of prosecution). Therefore, a potential licensee may not necessarily be able to discover their existence, even with due diligence. Thus, including these applications, even if not specifically listed, provides greater certainty and fairness. However, the situation is different with parent patents (i.e., prior patents that are dominant to the claims of the subject invention), because daughter applications usually refer to their parent applications and must do so in order to claim priority back to the parent application. Thus, a potential licensee should be able to discover such patents or patent applications by carefully reviewing the listed patent(s) or patent applications(s). Furthermore, the priority rules do not supply an unambiguous criteria for making that connection, because the the claims of a daughter application are entitled to claim priority based on the specifications--but not the claims--of the parent application. Thus, including language that would include some claims of such parent applications by default based on the claims of the daughter application can lead to ambiguities that may later cause disputes. In light of these considerations, the best course suggested to us appears to be to warn potential licensees of the need to conduct due diligence with respect to the existence of parent applications or other dominant patents held by the licensor, rather than to attempt to include them within the scope of the Licensed Patent Rights by default.