Evergreening of patent licence termination

The Australian Patents Act contains a provision that licensees can terminate a patent licence on three months’ notice after the patent has expired.

The recent case of MPEG LA v Regency Media [2014] FCA 180 considered the case of the right to terminate when a patent pool arrangement is in existence and the licence covers multiple pool patents, such as the MPEG patent applications.

It was found that the licensee has no statutory right to terminate until the last of the patents within the pool licence agreement has expired. As a consequence the patent holder enjoys the opportunity of evergreening under the licence agreement by being able to delay the operation of the provision.

This article first appeared in Managing Intellectual Property magazine, 28 March 2014.