Federal Circuit Holds That Negotiations Underlying Settlement Agreements Can Be Discovered
In ResQNet.com, Inc. v. Lansa, Inc. (Fed. Cir. 2010), the Federal Circuit held that patent litigation settlement agreements can be relevant in a different proceeding to the issue of the reasonable royalties that may be owed by a different infringer of the same patent(s). Last week, in In re MSTG, Inc., the court took that decision one step further by holding that communications underlying such settlement agreements may be discoverable.
My colleagues Jeanne Gills and Barry Grossman wrote about this case in a Foley & Lardner LLP Legal News article. You can read my sysnopsis and analysis of this case on Kluwer Patent Blog.
It will be interesting to see if this case has an impact on settlement negotiations. For example, patent holders may have a particular interest in creating a “record” that will support their position in subsequent litigation, but settling parties also may want to set the tone for whether a subsequent infringer—and likely competitor—will be subject to the same royalty rate.
