Interpreting the Scope of Exclusion-From-Arbitration Clauses in the IP Rights Realm
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The scope of arbitration clauses and exclusion-from-arbitration clauses are a common source of dispute. In the patent context, it is particularly important to understand the scope of exclusion-from-arbitration clauses concerning intellectual property rights. Recent case law provides guidance regarding whether exclusion-from-arbitration clauses for intellectual property rights cover defenses to patent infringement.
In Verinata Health, Inc. v. Ariosa Diagnostics, Inc., (Fed. Cir. 2016), Illumina, the parent company of Verinata Health, sued Ariosa Diagnostics for patent infringement. Prior to the dispute, Illumina and Ariosa entered into a supply agreement that gave Ariosa a license to a subset of Illumina’s intellectual property rights. Ariosa licensed Illumina’s systems for DNA analysis in order to create a test for chromosomal abnormalities that can cause genetic disorders. The supply agreement contained both an arbitration clause and an exclusion-from-arbitration clause. The relevant language of the exclusion-from-arbitration clause stated:
Read original article[N]o arbitration shall resolve[] disputes relating to issues of scope, infringement, validity and/or enforceability of any Intellectual Property Rights.
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