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  1. #1
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    Mar 2010
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    Default Patents Acquired from Bankruptcy Estate

    I recently acquired some patents from a bankruptcy estate and would like to know if I can cancel or renegotiate any license agreements that were in place by the original inventor or patent owner with licensees? The company that owned the patents actually produced the product and I have found a very large company who appears to be selling the same product and using the trademark name as well. Second question is, if it was a non-exclusive or exclusive agreement am I entitled to royalties fees?

    Thanks

  2. #2
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    Default Re: Patents Acquired from Bankruptcy Estate

    You can renegotiate a license agreement if the current patent owner (who may or may not be the original inventor) and you come to a new agreement. You cannot unilaterally cancel an agreement. If the license requires you to perform, it should have a failure clause in it. For example, a license may require you to produce, sell and pay royalties on a certain number units per year and indicate that failure to do so would carry a penalty, either in dollars or perhaps in cancelling the license. If the license contains no performance requirements, it may not be an issue.

    If the license you hold is exclusive, you may have a case to claim royalties if someone else is producing the product. But, this isn't an automatic thing. You'd have to know under what authority the company is operating. And, there are plenty of ways that it could get very messy if you and the company hold licenses that appear to be in conflict with each other.

  3. #3
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    Default Re: Patents Acquired from Bankruptcy Estate

    Thanks for your response. I actually own the patents and no for a fact that a large company produces the product. The company that invented the product actually produced the product as well. The trustee did not provide me with any licensing agreements so I am trying to figure out the best way to determine what type of license agreement is or was in place or if I can cancel or renegotiate it. The company with the license is GE.

    ML B

  4. #4
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    Default Re: Patents Acquired from Bankruptcy Estate

    OK, I see. I someone how read the arrangement the other way around.

    Assuming that you have the documentation that gives you clear ownership of the patents, I would simply contact the division in the producing company that is doing the producing, identify yourself as the patent holder and request that they provide copies of the documentation that they feel gives them the authority to produce the product. If they fail to respond or refuse, then contact their corporate legal department. You can try these steps on your own if you wish, but you may be better off engaging an attorney to make the contacts. You will probably need one to interpret the license agreements once you have them anyway, and will also need one to handle any renegotiation. They may drag their feet, but since you do not have a copy of the license and have no other way to get one, you might as well get the clock running on their foot-dragging. Ultimately, your threat to them is litigation challenging their right to produce the product for which you own the patent. They certainly will be aware that you can do that. Leave it to your attorney to determine the time and place to make that kind of threat, though.

  5. #5
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    Default Re: Patents Acquired from Bankruptcy Estate

    Scott--

    Thanks again for your response. I happen to know that a company in Taiwan is producing the products and produced them for the original owner's of the patents. The asian company actually reference the patents in their catalog. I know the original patent owners had a license agreement with this company to produce the products but the company has not paid any royalties and in fact has a judgement against them for royalties that was assigned to me(in bankruptcy proceeding) as well. Is there any way I can enforce judgment in Taiwan or put pressure on companies in the US that are buying the products directly from them?

  6. #6
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    Default Re: Patents Acquired from Bankruptcy Estate

    Quote Quoting mlbailey
    View Post
    Is there any way I can enforce judgment in Taiwan or put pressure on companies in the US that are buying the products directly from them?
    Yes, you will need an attorney. You need to provide the attorney with all the info that you have so he can assess the best course of action for you. Expect to have to pay the attorney upfront. I don't see this as a case that one would take on contingency, but you never know. Ultimately, nearly all things are negotiable.

  7. #7
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    Default Re: Patents Acquired from Bankruptcy Estate

    Thanks Scott!!

    ML B

  8. #8
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    Mar 2010
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    Default Re: Patents Acquired from Bankruptcy Estate

    Scott--

    I would like to know if the asian company had a exclusive agreement, and they haven't paid any royalties, can I cancel the agreement? Of course I don't have a copy of the agreement but they must be suppying GE and another fortune 500 company? In essence, I will find another supplier to produce products and try and arrange a licensing agreement directly with GE and other fortune 500 company. Your thoughts.

    ML B

    See post below

  9. #9
    Join Date
    Jan 2006
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    38,867

    Default Re: Patents Acquired from Bankruptcy Estate

    how do you know you are due any licensing fees without a contract that tells you that?

    Maybe they purchased the license with money up front.


    without a contract to refer to, you have no idea what the Taiwanese company is entitled do with the product or owes you.

  10. #10
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    Default Re: Patents Acquired from Bankruptcy Estate

    You REALLY need a law firm that handles intellectual property law.

    If you bought the patents from an estate, in bankruptcy, there must be an attorney or living people that know the details. Will they not answer questions? That is a lot different than buying it from the estate of a deceased person when that person was the only one with the knowledge.

    You need to get copies of any licensing agreements. This may require filing civil trademark infringement actions. They will then have to produce any licensing agreements as the defense.

    You really need to find out what the agreements state. For instance, if there are royalties, who are they paid to. You need to get that changed to you. (Maybe there is a third party, like an attorney.) You need to be able to review their records and see if any payments are due and not paid. You need to see what the agreement says about the death or the licenser/patent holder. Does the agreement apply to agents and assigns?

    You can certainly write the companies and let them know that you now own the patents and would like a copy of the agreement they are operating under. Failure to provide adequate information will result in a patent infringement action in US District Court. Chances are they will not want to go to court when they can easily solve the matter. You certainly need to let them know immediately that any payments should not be made to anyone else.

    If the company in Taiwan is the infringer or not paying royalties, then you would have to sue them. There are ways to block the importation of products that violate a US patent.

    You might be able to hire an attorney in Taiwan and file the current judgment there, and then move against that company's assets in Taiwan. I have no idea what the court's requirements are there, that is one of the things you need an attorney there for.

    If on the other hand the company in Taiwan is simply selling the product to the US companies and the US companies have no licensing agreement (which is generally for manufacture), then the only target is the company manufacturing the product. You will probably have lots of frequent flyer miles, but most things can be handled by an attorney you hire there. It is possible this product is being sold all over the world.

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