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Written January 23, 2020

The Federal Circuit on January 10, 2020, held that patent infringement claims against Japanese electric motor manufacturer Nidec Corp. were barred by a covenant not to sue, and found that the covenant was not superseded by a later agreement involving the same patent. Molon Motor & Oil Corp. v. Nidec Motor Corp., Fed. Cir., No. 19-1071, 1/10/20.

Molon Motor & Coil Corp., an American gearmotor company, sued Nidec for patent infringement, but the lower court said their claims were barred based on a 2006 covenant not to sue Nidec’s predecessor.

Molon argued the covenant was extinguished by a 2007 settlement agreement that granted Nidec’s predecessor an exclusive license to exploit multiple Molon patents – including the patent in question, noting that the 2007 settlement included a merger clause that invalidated prior agreements “concerning the subject matter hereof.”

The Federal Circuit disagreed, finding that the covenant wasn’t extinguished because the agreements didn’t involve the same subject matter.

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