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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, in addition to the listed patents and patent applications, 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have pointed out that these daughter and sister applications should be included by default because they may be yet unpublished (in the process of prosecution).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 and grand-parent patents (i.e., prior patent applications to which a patent or patent application may claim priority). In such cases, the daughter application will expressly refer back to the parent or grandparent application, and thus a potential licensee may discover them with reasonable due diligence. Furthermore, attempting to relate directly the claims of the parent or grandparent applications to the claims of the daughter application can generate ambiguity, because the priority rules allow a daughter application to claim back based on the specifications--not the claims--of the parent or grandparent application. Thus, it would be difficult to create a set of clear and unambiguous criteria for including certain claims of the parent or grandparent application by default in the Licensed Patent Rights. In light of these considerations, the best course may be to alert the potential licensee of this issue, and the need to conduct a reasonable degree of diligence prior to entering into a license, rather than attempt to encompass all necessary rights within the definition of the Licensed Patent Rights and thus create the seeds for future disputes.