In a December 11, 2009 decision by Justice Fischer, the court found that the defendants established prima facie that a patent Exclusive License Agreement constituted an assignment, and not a license, based on: (a) provisions defining the transfer as a “sale, assignment, and transfer in full … for any and all current and future rights acquired,” and providing that the agreement “grants transfers and assigns to [defendant], an exclusive and irrevocable right with no restrictions or reservations”; and (b) state law holding that an agreement transferring all substantial rights to a patent qualifies as an assignment, and requiring a contact clear on its face to be enforced a written. The court rejected the plaintiff’s argument that contract provisions entitling the plaintiff to receive perpetual royalties, to inspect the transferee’s books and records to verify monthly payments, and to demand indemnification and defense of infringement claims, rendered the agreement a license. The court was persuaded by law holding that the nomenclature used in a agreement has little impact on whether it constitutes an assignment or license, and that the rights the plaintiff maintained were minimal and provided only a policing mechanism to ensure that amounts owed were being paid. The court then dismissed the plaintiff’s cause of action for rescission, determining that it was premised on misperceiving the agreement as a license, and based on a claim of fraudulent inducement which was supported only by parol evidence.
Ark Patent Int’l, LLC v Tarksol Int’l, LLC, Sup Ct Monroe County, December 11, 2009, Fischer, J, Index No. 11921/07