In 1984 W.L. Gore & Associates (Gore) obtained an option from Bard Peripheral Vascular (Bard) to license any patent resulting from a patent application that issued in 2002 as the Goldfarb patent.
In 1984 W.L. Gore & Associates (Gore) obtained an option from Bard Peripheral Vascular (Bard) to license any patent resulting from a patent application that issued in 2002 as the Goldfarb patent. By the time the patent issued, Gore was making vascular grafts covered by the patent but did not obtain a license from Bard to continue doing so. Bard filed suit, claiming infringement by Gore. At issue was whether the option granted in 1984 was irrevocable and perpetual or alternatively whether it should have been exercised within a reasonable period. Cornerstone Research worked with Dr. Louis Berneman, who submitted two expert reports and testified at deposition and the ensuing jury trial.
The jury agreed and its damages award to Bard of $185 million provided for a royalty rate well in excess of the rate in the 1984 option agreement.
Dr. Berneman found that a defined period in which to exercise an option is an essential, standard element of patent license option agreements and that three to six months would have been a reasonable period for Gore to have exercised its option after the Goldfarb patent issued. Moreover, Dr. Berneman concluded that Gore’s decision not to exercise the option meant that the royalty rate in the original option agreement was no longer available and should not be a factor in the 2002 hypothetical negotiation. The jury agreed and its damages award to Bard of $185 million provided for a royalty rate well in excess of the rate in the 1984 option agreement.