Background
Uniloc 2017 LLC, a patent licensing entity, holds numerous patents that it sought to enforce against Google LLC. A threshold question in the litigation was whether Uniloc had standing to sue — specifically, whether a prior license agreement with certain rights-holders had stripped Uniloc or the underlying patent owners of the right to bring the infringement claims.
At issue was a license that had previously been characterized as irrevocable. Google argued that even after the parties to that license agreement had agreed to terminate it, the license’s irrevocability prevented the termination from being effective — meaning the original licensor (whose rights Uniloc had acquired) lacked standing to sue because Google remained licensed. The district court agreed and dismissed Uniloc’s complaint for lack of standing. Uniloc appealed.
The Court’s Holding
The Federal Circuit reversed. The court held that while an irrevocable license cannot be unilaterally revoked by the grantor — the licensor alone cannot simply decide the license no longer applies — the irrevocability does not prevent the parties from mutually agreeing to terminate the license. Contract law principles support this distinction: a party cannot unilaterally undo a binding contractual commitment, but the contract itself can be dissolved by the mutual consent of all parties.
Because both the licensor and the licensee had agreed to terminate the license, the termination was effective. After termination, the licensor was no longer bound by the license’s coverage, and the former licensee was no longer authorized to practice the patented technology. The licensor (whose rights Uniloc had obtained) therefore had standing to bring infringement claims against Google as of the termination date. The Federal Circuit vacated the dismissal and remanded for further proceedings.
Key Takeaways
- An irrevocable patent license prevents unilateral revocation by the grantor, but it does not prevent mutual termination — both parties to a license can agree to end it, regardless of irrevocability language.
- Once a license is mutually terminated, the licensor regains the right to enforce the patent against the former licensee for post-termination acts of infringement, restoring standing to sue.
- Patent licensing agreements should clearly address the conditions under which the license may be terminated by mutual consent, and what rights and obligations survive termination.
- Defendants sued for patent infringement who hold licenses should carefully evaluate whether any termination of that license was effective, as the effectiveness of termination can be outcome-determinative on standing.
Why It Matters
Patent licensing is the backbone of technology transfer and commercialization, and the terms under which licenses can be ended have significant practical consequences. The Uniloc v. Google decision clarifies an important boundary: irrevocability shields licensees from having their licenses unilaterally yanked away by a licensor who changes its mind, but it does not freeze the licensing relationship permanently if both parties want to move on.
For technology companies that have received irrevocable licenses as part of settlements or cross-licensing arrangements, the ruling is a reminder that the strength of an irrevocable license depends on whether the licensor can convince the other party to mutually terminate. Conversely, patent owners who have granted irrevocable licenses should understand that agreeing to terminate — even as part of a broader restructuring or portfolio transaction — may reopen the door to litigation from the now-unlicensed party. Careful due diligence on the status of existing licenses is essential in any patent portfolio acquisition or restructuring.