Xenon Ruling in the 7th Circuit Places Contract Rights Ahead of Patent Rights

01/08/2010 10:11

The Seventh Circuit U.S. Court of Appeals affirmed the lower court's holding that the law of concurrent patent ownership doesn't apply when the parties have established rights by contract in conflict with the rule.  The claim brought by the Wisconsin Alumni Research Foundation against the drug company Xenon alleged that Xenon breached their contractual agreement to share licensing fees.  In the ruling, the Seventh Circuit concluded that a contract will trump in licensing fee disputes.

Judge Diane Schwerm Sykes wrote, "Xenon argues that nothing in the exclusive license agreement explicitly revokes its statutory right to license its interest freely.  True, but the agreement's provision requiring that Xenon pay the [Wisconsin Alumni Research Foundation] a share of the fees derived from any sublicense plainly undermines Xenon's claim that it retained an unfettered right... to transfer its interest in the technology to third parties."

To read the entire opinion, please go here.