Secondary Considerations – Litigation Induced Licenses?

One of the secondary considerations to rebut obviousness is the acquiescence of others in the industry, often shown through licensing the patented invention. Presumably, a competitor does not act against his or her own economic interests (i.e., by paying a licensing fee) unless convinced of the validity of the patent.

Does it matter if the licenses are the result of litigation or the threat of litigation? Recently in the Eastern District of Texas, the district court denied defendants’ motion in limine to exclude litigation induced licenses. The plaintiff intended to introduce them not only for evidence of secondary considerations, but for damages as well. The court stated: “Defendants’ concerns about the reliability of litigation-related licenses are better direct to weight, not admissibility.” See Datatreasury Corporation v. Wells Fargo & Company et al., 2-06-cv-00072 (TXED March 4, 2010, Order) (Folsom, J.), available here.