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Diamondback is the assignee and owner of U.S. Patent No. 9,810,035, entitled “Disposable Setting Tool” (the ‘035 Patent). Diamondback has been selling its patented setting tools and those setting tools practice and embody one or more claims of the ’035 Patent. Repeat Precision approached Diamondback about obtaining a license to the ’035 Patent, and ultimately Diamondback and Repeat Precision entered in to a Patent License Agreement (“Patent License”).

Diamondback filed a motion to dismiss Repeat Precision’s patent infringement claim for lack of subject matter jurisdiction based on the Patent License, asserting that the license grant in the Patent License was restricted and carved out Diamondback’s sales of its patented setting tools.

As explained by the district court, Diamondback’s sales of its patented setting tools began in 2017, and Diamondback contended that those sales continued without objection and with Repeat Precision’s knowledge after the parties executed the Patent License. Diamondback contended that it already had patented setting tools in inventory and that it fully intended to continue selling those tools, and that Repeat Precision was aware of these intentions. Diamondback also contended that Repeat Precision never suggested that Diamondback should discontinue its sales or otherwise destroy its existing inventory. Diamondback also argued that Repeat Precision failed to provide the “prompt written notice” of any alleged patent infringement that was required under the Patent License and that it continued to continue to make sales with the implied consent of Repeat Precision. Continue reading