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Think again before you sign a patent litigation settlement agreement: Patent litigation settlements may now be evidence of a reasonable royalty and related negotiations may now be discoverable

13 April 2011

IP Alert

In the U.S., patent litigation settlement agreements have usually been discoverable, but inadmissible to establish a reasonable royalty because royalties paid to avoid litigation have generally been viewed as an unreliable indicator of a reasonable royalty. Likewise, as litigation-related licenses have generally been viewed as inadmissible, settlement negotiations have largely not been discoverable, as they would be unlikely to lead to the discovery of admissible evidence or were shielded based on a settlement negotiations privilege recognized in several jurisdictions. The 2010 decision of the U.S. Court of Appeals for the Federal Circuit in ResQNet.com, Inc. v. Lansa, Inc.(ResQNet), however, has caused litigants and courts to reconsider these previously well-settled principals.



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