Lear Doctrine Avoided by Metabolite?

In a post last week, it was reported that U.S. patent 4,940,658, the subject Lab. Corp. of Am. Holdings v. Metabolite Labs., 126 S. Ct. 2921, 2921 (2006) (dismissing the writ of certiorari as improvidently granted) had withstood an ex parte patent reexamination challenge at the USPTO. Specifically, the BPAI reversed the examiner rejection of claims 13, 15-17 and 33 and refused to reconsider their decision in the face of a rare patent examiner request for rehearing (90/008,305).

Aside from the ongoing patent battle raging between Lab Corp. and Metabolite, there is also a contractual dispute before the United States Court of Appeals for the Tenth Circuit involving these same companies. Metabolite is arguing that Lab Corp. unlawfully terminated an earlier licensing agreement. In order to have lawfully terminated their agreement, Metabolite argues that Lab Corp. must prove their products do not infringe the ‘658 Patent, but they have lost this battle at trial. Likewise, Metabolite argues that if Lab Corp is attempting to argue lawful termination based upon patent invalidity (i.e., Lear Doctrine), the BPAI has recently disproven this theory as well.

The Lear doctrine provides that a licensee which successfully challenges the validity of a patent is not obligated to pay royalties accruing from the date of the challenge.

In this case it seems that the license agreement was first breached as far back as 2001 (See Metabolite letter to the court dated 12/17/10).  Yet, the request for ex parte patent reexamination was not filed in October 2006, and the contract was terminated in October 2007. Based on the late filing of the patent reexamination, it may be that the Lear Doctrine was not  much of a real concern as compared to other contractual provisions that may have excused performance.

Nevertheless, a successful patent reexamination may satisfy the Lear Doctrine and excuse licensees from paying royalties. For example, the Fifth Circuit recently concluded in DuVal Wiedmann, LLC v. InfoRocket.com, Inc. that a licensee did not owe royalties for any activity after the licensee requested inter partes reexamination where the “validity challenge” ultimately proved to be successful.