Section 145 provides the licensee of a patent with a statutory right to terminate the licence on 3 months’ written notice after the patent has expired. What happens, however, if more than one patent has been licensed?
MPEG LA is the patent pool vehicle which licenses the essential patents for the production of DVDs, DVD players and some other video codecs. It granted a licence of a number of patents to Regency Media. In June 2012, after some, but not all, of the patents had expired, Regency Media sent a notice seeking to exercise its right to terminate under s 145. By the trial, some other patents had expired, but some of those licensed were still extant.
Section 145 provides:
Termination of contract after patent ceases to be in force
(1) A contract relating to the lease of, or a licence to exploit, a patented invention may be terminated by either party, on giving 3 months’ notice in writing to the other party, at any time after the patent, or all the patents, by which the invention was protected at the time the contract was made, have ceased to be in force.
(2) Subsection (1) applies despite anything to the contrary in that contract or in any other contract.
The short answer: according to Flick J it appears the licensee has to wait until all the licensed patents have expired before the licensee can exercise the right under s 145.
A bit longer answer: Acknowledging the force of Regency Media’s argument that each patent could be described as being for a patented invention (a term not otherwise defined in the Act), Flick J accepted MPEG LA’s argument. According to MPEG LA, the licence granted rights over three groups of technologies:
- the MPEG–2 Decoding Products;
- the MPEG–2 Encoding Products; and
- the MPEG–2 Packaged Medium,
At , Flick J appears to arrive at this conclusion because each of the three groups constituted a “manner of manufacture” in the NRDC sense irrespective of how many patents fell within the particular group. His Honour also thought s 145 was drafted before modern licensing administrators came on to the scene and so may well be inaptly worded to deal with such creatures. However, his Honour considered at :
A court, should be slow to prefer a construction which would permit the termination of an agreement in respect to patents which have not ceased to be in force and which would deny to a patent holder the benefit of the payment of royalties in amounts that have been the subject of agreement. Section 145 manifestly does not permit a contract to be terminated where “all of the patents, by which the invention [is] protected” have not ceased to be in force.
MPEG LA, L.L.C. v Regency Media Pty Ltd  FCA 180