What happens if a patent involved in an arbitration award is later invalidated?

If a patent involved in an arbitration award is subsequently invalidated, there are provisions for modifying the award. This process is outlined in 35 U.S.C. 294(c):

“The parties to an arbitration may agree that in the event a patent which is the subject matter of an award is subsequently determined to be invalid or unenforceable in a judgment rendered by a court of competent jurisdiction from which no appeal can or has been taken, such award may be modified by any court of competent jurisdiction upon application by any party to the arbitration.”

Key points to note:

• Parties can agree in advance to allow modification of the award if the patent is invalidated.
• The invalidation must be determined by a court of competent jurisdiction.
• The court decision must be final (no appeal possible or taken).
• Any party to the arbitration can apply to a court for modification of the award.
• The modified award will govern the rights and obligations between the parties from the date of modification.

This provision allows for adjustments to arbitration outcomes in light of significant changes to the validity of the underlying patent rights.