When Does a Non-Compete Clause Constitute Patent Misuse?
Businesses manufacturing and selling patented goods should consider the recent Seventh Circuit decision in County Materials Corporation v. Allan Block Corporation, 2007 WL 2701979 (7th Cir. 2007), where the court tackled several important issues related to non-compete covenants in agreements concerning the manufacture and sale of patented goods, including jurisdiction, patent misuse, and enforceability under the state’s laws. Of particular importance is the court’s discussion of when the provisions of a covenant not to compete constitute patent misuse. County Materials manufactures concrete blocks, and Allan Block develops, markets, and licenses technology for the manufacture of concrete blocks. The parties entered into an agreement granting County Materials the exclusive right to manufacture Allan Block’s patented block products in northwest Wisconsin. County was granted the right “to sell these products under the Allan Block trademark.” The agreement also allowed County Materials to
