Nano-Proprietary, Inc. v. Keesmann

2007 WL 433100, No. 06 C 2689 (2007)

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Nano-Proprietary, Inc. v. Keesmann

United States District Court for the Northern District of Illinois
2007 WL 433100, No. 06 C 2689 (2007)

  • Written by Brett Stavin, JD

Facts

On May 26, 2000, Nano-Proprietary, Inc. (NPI) (plaintiff), a technology company, entered into a patent license agreement with German citizen Till Keesmann (defendant). [Editor’s Note: The casebook excerpt misspells Keesmann’s name in the case title.] The agreement provided NPI with the exclusive and worldwide license rights, including sublicense rights, to certain of Keesmann’s patents. The parties entered into the agreement with the understanding that NPI would sell sublicenses for the patents to third parties. Additionally, NPI agreed that it would support Keesmann in maintenance of the patent, including strengthening the patent. NPI also agreed to enforce the patent against infringers. Keesmann agreed to not license the patent to any other party and to not unreasonably withhold approval of sublicenses. As consideration for the exclusive license, NPI agreed to pay royalties to Keesmann on a quarterly basis, amounting to a total sum of $1 million within four years from the commencement of the agreement. The patents related to carbon nanotubes, which the parties viewed as having substantial potential in the flat-panel-display market, including the ability to displace plasma and liquid crystal displays. On March 22, 2006, Keesmann provided NPI with notice of termination of the agreement, alleging that NPI had defaulted under the agreement because NPI failed to actively market the patents, failed to adequately enforce the patents against infringement, and failed to comply with audit requests. NPI responded that it was not in default under the agreement. Additionally, NPI filed a lawsuit in federal district court seeking to enjoin Keesmann from terminating the agreement. NPI sought a preliminary injunction from the court to enjoin termination of the agreement pending the outcome of the litigation. Both parties agreed that the patents were preeminent in the field of nanotechnology. Keesmann argued that the public interest would be harmed if the patents were frozen pending litigation.

Rule of Law

Issue

Holding and Reasoning (Andersen, J.)

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