The challenge

As Baseclick started to take off, the story took an unexpected and crucial turn with the granting of the patent in 2010: Professor Carell was informed that a group of attorneys representing a powerful US biotech company had filed a patent application (with later priority) and was threatening an infringement lawsuit in the US and an opposition in Europe. For a company still in the start-up phase, this represented an enormous challenge: legal expertise and representation costs before the courts in the US would mean expenditure that it could not afford.

Coming at a time when revenues start to consolidate and investment is still needed, the anticipated costs and the risk of losing the business were a shock. “To be able to defend the patent in the US courts, the first thing I had to do was transfer a six-digit sum to our representatives!” Carell remembers. In addition, there was a further risk that the court might decide to issue an injunction to stop the commercialisation of potentially infringing products.

Questions:
What were Baseclick's options apart from going to court?
What does Baseclick need to consider if they decide to go to court?

Litigation proceedings before the courts can be very time-consuming, and their outcome uncertain. As an alternative, the company could have tried to reach a standstill agreement with the claimant, in order to settle the case out of court. To do that, however, it would have needed to be in a much stronger negotiating position. But it was not in a position to fight in court, nor could it offer anything but access to its technology in the European market, which would have been a very disadvantageous solution.

When it comes to licensing their exclusive rights, patent owners can consider a number of different options: straightforward licences, exclusive licences and sole licences (which exclude the owner from exploiting the invention).
 Questions:
If they win the case, will Baseclick be free to commercialise the invention, or are there any other legal hurdles that may arise?
What options are available to them if they go to court and lose the case?
If the case is positively cleared, what kind of IP can Baseclick use to commercialise their invention and why?

Fortunately, BASF was a major shareholder of Baseclick and was big enough to face the US litigation threat. Once its lawyers stepped in, the chances for a balanced agreement looked much better. In the end, the case was dropped and Baseclick was free to continue developing its business.


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Last modified: Friday, 21 July 2017, 5:24 PM