In the case of Troy Iron & Nail Factory v. Corning(1852), the United States Supreme Court alluded to a supposed rule that patent licenses were not assignable unless the contract explicitly said so. In other words, if a patent license said nothing about its assignability, then the license was not assignable, and a licensee could not transfer the license without the licensor’s consent. Although this rule was contrary to the standard doctrine that contracts are assignable absent a provision to the contrary, the Court subsequently recognized it as a federal general common law rule – a judicially created federal rule – in several of its other decisions that century.

The Supreme Court has never recognized this rule in modern times, and in 1938, the Court discarded altogether the notion of federal general common law in the landmark case of Erie R.R. v. Tompkins, when it held, “There is no federal general common law.” But the Court never struck down the purported rule on assignability, and even since Erie, several federal circuit courts of appeal – including the Sixth, Seventh, and Ninth Circuits – have continued to recognize the rule.

 

 

Be well