License drafters beware – patents may be subject to implied license if grandparents and uncles are expressly licensed

Cheetah v AT&T, Appeal No. 2019-1264, Fed. Cir., February 6, 2020.

Cheetah Omni LLC (“Cheetah”) sued AT&T for patent infringement, and Ciena Communications intervened, as a manufacturer and supplier of allegedly infringing parts to AT&T.  AT&T and Ciena filed for summary judgement based on the allegation that the patent allegedly infringed was part of a license agreement between the parties, though not expressly listed in the agreement.  The license in dispute included a definition of licensed patents that recited “all parents, provisionals, substitutes, renewals, continuations, continuations-in-part, divisionals, foreign counterparts, reissues, oppositions, continued examinations, reexaminations and extensions.”  The patent at issue was a continuation of a continuation of a patent that was expressly covered by the definition provided in the license.

Cheetah argued the grandchild was not covered.  Specifically, Cheetah argued that since all parties were aware of the granchild, if they had intended to include it within the terms of the license, it would have been expressly named.  For their part, AT&T and Ciena argued the exact opposite – that the license agreement(s) at issue did not expressly list all included patents, but that the parties did specifically exclude other patents.  And so, if the parties had intended to exclude the patent-at-issue, they would have done so.

The Federal Circuit agreed with AT&T and Ciena and affirmed the district court, holding:

The naming of certain patents expressly, however, does not evince a clear mutual intent to exclude other patents falling within the general definitions in an agreement.