“Recent” IP Developments that Affect Licensing.doc

Recent IP Developments that Affect Licensing Raymond T. Nimmer Rnimmer@ I. No presumption of permanent injunction; four-part test applies II. Technology Restraints as a Support for License Restrictions III. Lear doctrine and the licensee’s right to challenge validity IV. Federal dilution law revised V. Inducement as indirect liability VI. First sale and ownership of copies and machines VII. Preemption does not preclude “no reverse engineering clauses” VIII. No Contest Clauses and Estoppel - Trademark IX. Quality Control in Trademark License X. Non-rights licensing XI. Linking and the Display Right XII. Work for Hire and Implied License XIII. Degree of copyright protection XIV Visual Arts XV. Publicity right XVI. Trademark use I. No presumption of permanent injunction; four-part test applies Ebay, Inc. v. Merexchange, LLC, 2006 WL 1310670, -- US – (2006) The Court held that injunctions are an appropriate remedy for infringing a patent, but not in all cases. It ruled that a traditional four-factor test applies in patent cases as it does in other cases. That result creates the potentially unfortunate result that an owner of property who proves a defendant is infringing might not receive judicial assistance in ordering the defendant to stop. The Court laid to rest two extreme theories about IP remedies. One theory was what Ebay described as “automatic injunction”– permanent injunctions automatically issue on a finding of infringement except in unusual cases. The Court rejected the automatic injunction rule because it ignores the traditional four-part test which demands an equity analysis to determine if damages alone are an adequate remedy or whether equity requires an injunction too. The “automatic injunction” approach treated patents differently from other property. The other rejected theory, used in the District Court, would categorically preclude injunction in many cases, including where the patent owner does not itself exploit the patent but simply seeks t