October 28, 2006
Using a chapter 11 plan to circumvent the Patent Act
First published August 18, 2004.
The U.S. District Court for the N. District of California recently held that a chapter 11 plan can separate a patent from the right to sue for infringement of the patent. Morrow v. Microsoft Corporation, 2004 WL 1781010 (Aug. 10, 2004). The debtor's chapter 11 plan had established three liquidating trusts. One received the patent and another the right to bring infringement claims. When one trust sued Microsoft for patent infringment, Microsoft claimed the trustee (Morrow) lacked standing. Despite circuit law that only the title or equitable holder of the patent can bring an infringement claim, the court held the trustee had standing under the terms of the confirmed plan and general trust principles. ¶ 3:28 PM
The U.S. District Court for the N. District of California recently held that a chapter 11 plan can separate a patent from the right to sue for infringement of the patent. Morrow v. Microsoft Corporation, 2004 WL 1781010 (Aug. 10, 2004). The debtor's chapter 11 plan had established three liquidating trusts. One received the patent and another the right to bring infringement claims. When one trust sued Microsoft for patent infringment, Microsoft claimed the trustee (Morrow) lacked standing. Despite circuit law that only the title or equitable holder of the patent can bring an infringement claim, the court held the trustee had standing under the terms of the confirmed plan and general trust principles. ¶ 3:28 PM
