On Monday, Kodak and Samsung settled a long-running patent infringement dispute spanning several years and multiple continents. The settlement includes a patent license agreement wherein each side gains a patent license for the other's patents. The license agreement, which provides appreciable benefits to both parties, is royalty bearing to Kodak. Additional financial details were not disclosed. As a Florida patent lawyer that frequently deals with patent infringement disputes, this case illustrates various important aspects surrounding patent litigation.
This case illustrates how a legal dispute can easily escalate into a world-wide battle requiring enormous resources. This disagreement started as a simple request for another party to take a patent license and blossomed into a two-way, 26-month patent infringement litigation that was concurrently being heard in two separate district courts in the U.S., in a federal court in Germany and the U.S. International Trade Commission. The legal bills for both sides are easily calculated to be in the millions of U.S. dollars. The end result - a settlement agreement comprising a cross-license - was not proportional to the extent of the conflict. Tomes can be written about the psychology behind why parties don't settle. But the abject lesson here is that parties should push to settle as early as possible, especially in complex commercial litigation cases, such as a patent infringement case.
This case further illustrates a common settlement outcome in patent infringement cases - a cross-license. As I discussed in an earlier post about the uses of a patent, a savvy company with an intellectual property program will obtain patents on its core technologies not just for the purpose of asserting them against their competitors, but also for the purpose of using them as a shield in the face of a competitor's attack. This is exactly what transpired in the Kodak-Samsung dispute. What started out as a single patent infringement claim, ended up as a two-way fight where each party both asserted patent infringement claims and defended against the same. Counterclaiming for patent infringement can have a chilling effect on a patent plaintiff and can move the parties to settlement, since both parties have much to lose if they are beaten at trial. In this case, it took the parties quite a while to realize this, but ultimately it led to settlement.