2nd Circ. Says Licensing Deals Can't Bar Patent Challenges

Law360, New York (July 10, 2012, 8:37 PM ET) -- The Second Circuit said Tuesday that patent licensing agreements reached before litigation cannot be used to bar a licensee from later challenging the validity of a patent, even if the deal is called a legal settlement.

The appeals panel affirmed a New York federal judge's dismissal of Rates Technology Inc.'s $12 million breach of contract suit against Best Buy Co. Inc., agreeing that a "no-challenge clause" in a previous settlement between the patent licensor and the retailer was void under the U.S. Supreme Court's 1969 ruling...
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