Washington Law Review


The Federal Circuit has been inconsistent in its treatment of patent licensing agreements held by foundries. Recently, the Federal Circuit held that a foundry contract is a sale of goods that severs the right of the patentee with respect to the buyer under the patent exhaustion doctrine. In addition, it held that the applicable license would be construed to allow foundry rights unless the patentee could prove otherwise. This Note analyzes a string of Federal Circuit cases involving foundries and patent licenses. It concludes that a foundry contract should be viewed as a sale of services rather than a sale of goods and that, even if it is a sale of goods, a foundry transaction should not be a "first sale" under the patent exhaustion doctrine. In addition, a patent license should be construed with the presumption that foundry rights were not granted unless the licensee establishes a contrary intent.

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