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Hastings Law Journal

Authors

Edo Royker

Abstract

The primary focus of this Note is to address the impact of the totality of circumstances test, as now adopted by the Federal Circuit, on covenants not to sue. Under the old reasonable apprehension test, promises not to sue were given greater weight than under the new totality of the circumstances test. Part I of this Note will address the new totality of the circumstances test under Medlmmune and SanDisk. Part II of this Note will begin by analyzing the application of promises not to sue prior to the Medlmmune and SanDisk decisions and then compare the weight given to the same promises in a post- MedImmune world. Although the current case law does not indicate an extreme change from the pre-Medlmmune decisions, the dicta in these cases indicates that a more extreme change may be forthcoming. Finally, Part III will respond to a number of scholarly articles that have indicated disapproval of the Federal Circuit's application of the totality of the circumstances test and explain why such criticism may be called for in certain situations but not in others. More specifically, Part III will explore four potential bargaining scenarios between hypothetical licensors and licensees, and will apply a twofold analysis taking into account exposed revenue and burdensome litigation costs. The article concludes that if the primary purpose of a company is to develop technology, rather than to generate revenue through an aggressive licensing plan, then the new declaratory judgment standard will help such companies operate without fear of faulty license demands.

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