Sign In

Case Alerts

Arbitration not required: 
By George, LLC v. Hurricane Shooters, LLC, No. 8:10-CV-1894-T-27MAP, 2012 WL 50498, *3-*5 (M.D. Fla. Jan. 9, 2012) (Held: Permissive arbitration clauses ("may submit") cannot force binding arbitration upon a resistant party, this despite the Federal Arbitration Act's admonition that arbitration is presumptively compelled on issues "referable" to arbitration; otherwise, the express flexibility of the parties' agreement would be defeated.) The disputants had settled earlier patent litigation with a "look-back" covenant not to sue on existing products, and a "look-forward" royalty-based license for future infringing products. The settlement agreement directed that disputes about the look-back provisions "shall" be submitted to arbitration, while future infringement disputes "may" be submitted to arbitration. (Editor's note: query the value of a permissive clause where the other party can simply refuse and enforce the litigation option already available without the "may" clause.) The district court confirmed this two-pronged approach and denied the mandatory arbitrability of any look-forward infringement disputes under this agreement. (Note: additional cases on the unenforceability of agreements to arbitrate patent disputes may be found at R. Matthews, Annotated Patent Digest 36:147 to 36:147.200. - thank you Robert Matthews for this submission.)
   Key words: permissive arbitration, mandatory arbitration, Federal Arbitration Act, parties’ intent
Vescent, Inc. v. Prosun Intern., LLC, No: 10-cv-01103-WYD-CVS, 2010 WL 4658862, *2-*5 (D. Colo. Nov. 9, 2010) (denying defendant’s motion to stay an action raising claims of breach of contract, patent infringement, trademark infringement, and other claims, based on an alleged arbitration agreement contained in a “Letter of Mutual Intent,” the court ruling that the alleged arbitration provision did not show an intent by the parties to submit the asserted claims to arbitration where the agreement was silent as to whether the parties agreed to be bound by arbitration and was silent as to what types of claims would be arbitrated, and appeared more to be an agreement to include an arbitration provision in any license that later issued).
Promega Corp. v. Life Technologies Corp., No. 10-cv-281-bbc, 2010 WL 3121811, *3 (W.D. Wis. Aug. 9, 2010) (in a declaratory judgment brought against a defendant who had previously asserted to the declaratory judgment plaintiff-licensee that the defendant had acquired a certain license agreement that the declaratory judgment plaintiff had with a third party original licensor, who was a subsidiary of the defendant, and that pursuant to that agreement the licensee owed the defendant over 50 million dollars in under reported royalties, ruling that the licensee was not required to arbitrate the disputes relating to the license agreement based on the arbitration clause contained in the license agreement with the defendant since the defendant was not a signatory to that agreement or the valid assignee of the original licensor’s rights in the agreement as the license agreement had an anti-assignment provision, the court not addressing whether the licensee would have to arbitrate the disputes with the original licensor).
 Arbitration required:
Kawasaki Heavy Indus., Ltd. v. Bombardier Recreational Products, Inc., No. 3:10-cv-00641-DRH-DGW, 2011 WL 1706740, *5 (S.D. Ill. May 5, 2011) (denying defendant’s motion to dismiss or stay suit in favor of arbitration over breach of an agreement settling a patent infringement dispute, where defendant was deemed to have waived its right to seek arbitration by not timely asserting an arbitration demand “at the first opportunity” while participating in litigation for two years before first raising arbitrability, including filing supportive briefs to vacate a stipulated dismissal in the trial court, participating in an appeal and the related Federal Circuit mediation, and filing no stay or motion to dismiss while battling over subject matter jurisdiction issues:  "The Court finds that the BRP parties have acted inconsistently with the intent to arbitrate and thus implicitly waived their right to arbitrate.”).
Eprotech Preservation, Inc. v. Engineered Materials, Inc., Civ. No. 10-5097 (DRD), 2011 WL 867542 *1 (D. N.J. March 9, 2011) (in response to a complaint alleging bad faith handling of an exclusive license for an anti-corrosion film and its related trademarks and other intellectual property, HELD that the parties' admittedly valid agreement with a "[less than] artful" arbitration clause covering the "Agreement, and all transactions contemplated thereby" mandated arbitration of one well pled and two other confusingly pled breach of contract counts; however, the remaining counts in consumer fraud and misrepresentation ("confused [and] vague ... to the point of incoherence") and in tortious interference would merely be stayed; no attorney fee award for the winning motion at this early stage given a broad prevailing party clause, and given the involvement of joined parties not subject to the arbitration provisions).
Polymer Technology Sys., Inc. v. Roche Diagnostics Corp., No. 1:10-cv-0061-LJM-TAB, 2010 WL 3782173, *2-*3 (S.D. Ind. Sept. 20, 2010) (in a declaratory judgment action brought by a licensee seeking a declaration on non-infringement and invalidity, granting the patentee’s motion to dismiss the suit and compel arbitration of the infringement issue, under Rule 12(b)(3), and rejecting licensee’s contention that a “carve out” provision in the settlement/license agreement permitted the question of whether a redesigned product infringed to be litigated in court, the court ruling that the question fell within the scope of the agreement to arbitrate).
Halliburton Energy Services, Inc. v. BJ Services Co., No. 2:08-cv-475-TJW, 2010 WL 2991031, *3 (E.D. Tex. Jul. 28, 2010) (where, after 18 months of litigating the infringement case, the accused infringer was acquired by an entity who had an enforceable arbitration agreement with the patentee, which agreement applied to later acquired companies, granting the accused infringer’s motion to stay the case pending arbitration and ruling that based on the agreement’s incorporation of the arbitration rules of the AAA, the question of whether the dispute was subject to the arbitration agreement was in the first instance a question for the arbitrator, further ruling in the alternative that the court found that the agreement applied to the dispute, and that the application of the agreement was not limited to later-acquired companies that were acquired before the commencement of a law suit but extended to companies already in litigation when they were acquired, also ruling that the accused infringer did not waive the right to arbitrate by not requesting arbitration when the merger with its new parent was announced in 2009 since the accused infringer did not have access to the arbitration agreement until after the merger closing in May of 2010, and promptly moved for a stay shortly thereafter).
Abbott Lab .v. Qiagen Gaithersburg, Inc., No. 10 CV 712, 2010 WL 1539952, *2 (N.D. Ill. Apr. 15, 2010) (where U.S. subsidiary and its German parent were licensees under a patent, granting U.S. subsidiary’s motion to compel arbitration of a dispute the patentee had raised and finding that the license agreement had a broad scope of coverage and could apply to post-expiration disputes, but denying motion to compel with respect to the German parent since the parent had waived its right to arbitrate by not timely asserting that right in response to a suit brought by the patentee in Germany).
F. Hoffmann-La Roche LTD. v. Qiagen Gaithersburg, Inc., No. 09 Civ. 7326 (WHP), 2010 WL 3187644 (S.D.N.Y. Aug. 11, 2010) (confirming, under 9 U.S.C. §§ 201-208, an international arbitration award regarding a dispute over a patent cross licensing agreement covering certain HPV patents registered in the Europe, Asia, and the United States).
Molten Metal Equip. Innovations, Inc. v. Pyrotek Inc., No. 1:10cv388, 2010 WL 2639912 (N.D. Ohio June 29, 2010) (confirming arbitrator’s award that found the claims infringed, not proven invalid, and awarded almost one and one half million dollars in lost profit damages, and rejecting the accused infringer’s argument that the award had been procured by fraud based on alleged perjury of the patentee allegedly uncovered during the arbitration, the court ruling that the evidence had been submitted to the arbitrator, the arbitrator had ruled on the issue, and the accused infringer presented no new evidence to show additional fraud, and therefore the court would not substitute its view of the evidence for the ruling made by the arbitrator, further rejecting the accused infringer’s argument that the patentee committed fraud by seeking to rescind a prior stipulation that a prior patent of the inventor was prior art to the claimed invention and that the arbitrator showed partiality by raising that issue sua sponte, the court finding that the arbitrator had properly applied Federal Circuit law, and even if its had not, such a legal error would not be reviewable, also rejecting the contention that the arbitrator had partiality because he failed to disclose that his law firm was adverse to the law firm representing the accused infringer in another unrelated matter, the court noting that since neither the arbitrator, nor any of the accused infringer’s counsel were involved in that other litigation, the failure to disclose the involvement did not show partiality that required vacating the award, and finally, rejecting the argument that the arbitrator erred by refusing to permit the accused infringer to raise an inequitable conduct defense first presented two days before the hearing).

Kimberly-Clark Worldwide, Inc. v. First Quality Baby Products, LLC, No. 957, 2011 WL 63986, *1 (Fed. Cir. Jan. 10, 2011) (nonprecedential, out of M.D. Pa..) (granting permission for an interlocutory appeal of district court’s order compelling patentee to produce documents related to an arbitration where the patentee alleged the documents were protected from discovery under a mediation-type privilege – “First Quality sought discovery of certain documents produced by Kimberly-Clark during several alternative dispute resolution proceedings between Kimberly-Clark and a third party. Kimberly-Clark objected, asserting that the documents were privileged under the ‘federal mediation privilege.’ First Quality sought an order compelling discovery of those documents. The District Court recognized the federal mediation privilege, but held that although documents arising from ‘mediation’ proceedings were privileged, other documents arising from ‘arbitration’ proceedings were discoverable. In a separate order, the District Court certified its discovery ruling for permissive appeal pursuant to 28 U.S.C. § 1292(b). Ultimately, this court must exercise its own discretion in deciding whether it will grant permission to appeal interlocutory orders certified by a trial court. We determine that granting the petition in these circumstances is warranted.” – citation omitted).  

Please send any corrections as well as additional case summaries to Greg Whitehair at