Federal Circuit Ruling Underscores the “Future Affiliate” Trap in Licensing Agreements

In an opinion issued December 4, 2023, the U.S. Court of Appeals for the Federal Circuit reversed a lower court’s denial of Intel Corporation’s (“Intel’s”) motion for leave to amend its answer to assert a new license defense in a patent infringement suit brought by VLSI Technology LLC (“VLSI”).

The decision paves the way for Intel to make the case that it received a license to VLSI’s patents when a company that Intel had an existing license with became affiliated with VLSI due to its acquisition by an investment management firm.

VLSI sued Intel for infringement of two patents in April 2019.  Several months prior to trial, in September 2020, Intel filed a motion to stay the litigation due to a new license defense the company wished to assert.  Intel argued it had acquired a license to VLSI’s patents (including the two patents asserted in the litigation) due to a change of control of Finjan, Inc., a company with which Intel had a pre-existing license agreement. 

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