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According to a Massachusetts federal court, an arbitrator is the proper authority to determine whether a patent licensee has a right to intervene if there is a dispute between its licensor and a third party regarding the intervention terms of the license agreement.
In Amgen, Inc. v. F. Hoffman-LaRoche, LTD, No. 05-12237-WGY, 2006 WL 2987949 (D. Mass. Oct. 20, 2006), Amgen sued Hoffman for patent infringement. Ortho Biotech Products, L.P. filed a motion to intervene on the side of Amgen because it had signed an exclusive license agreement with Amgen to sell the products at issue. Amgen opposed Ortho’s intervention.
The license agreement between Amgen and Ortho included a broad arbitration provision. It also included a protocol provision for third party infringement actions. Ortho argued that it should be allowed to intervene as an exclusive licensee of the related patents because of the terms of the agreement’s protocol.
The Court recognized a contract exception to the general rule that would allow Ortho to join Amgen’s action against Hoffman. An exclusive licensee may waive its right to join an action for patent infringement by the patentee. “A patentee … [is] able to draft license agreements so as to preclude their exclusive licensees from being deemed necessary parties to any patent infringement actions it may bring.”
Depending on the interpretation of the protocol provision of the license agreement, Ortho may have waived its right to intervene in the action. Accordingly, the Court held that “[t]he dispute over Ortho’s right to intervene, therefore, is, at root, a contract dispute-the type of dispute which must be arbitrated.”
The Court concluded that the arbitrator should determine whether or not Ortho has a right to intervene in Amgen’s action against Hoffman and denied Ortho’s motion to intervene pending arbitration.
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