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Patents Court paves the way for greater transparency in patent licensing

1 May 2015

The Patents Court has made an order for pre-action disclosure of patent licences. This is a significant decision which could have broad implications for the patent licensing market.

Ticketogo sent the Big Bus Company letters claiming infringement and offering a licence of its patent, repeatedly referring to similar licences that a number of Big Bus’s competitors had entered into. Big Bus applied for pre-action disclosure of these licences, purportedly to enable it to ascertain the value of Ticketogo’s claim for patent infringement.

The court held that the requirements for pre-action disclosure at CPR 31.16 were fulfilled. Importantly, it found that, although in intellectual property cases disclosure regarding quantum was often delayed until after a decision on liability, the rule was not set in stone.

In considering whether or not pre-action disclosure should be ordered, Mr Justice Arnold stated that he considered that “transparency is a virtue” and further, that the “Availability of price information is one of the key requirements for the proper functioning of any market, and I see no reason why the market for patent licences should be an exception”.

Of course, that is not the way the patent licence market has operated to date. As such, this decision may pave the way for further applications for disclosure of patent licences, creating transparency in a previously opaque marketplace and necessitating a change patent licensors’ business models.

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