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Joseph J. Farnan: Fixing a Scrivener’s Error in IP Transfers

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In one of his last acts as a judicial officer, now-retired district judge Joseph J. Farnan Jr. issued a decision resolving a contractual ambiguity of major proportions. The underlying IP transfer agreement called for the conveyance of “patent rights” between the counterparties listed on “Schedule A.” The only problem was that Schedule A never existed; instead the parties drafted a “Schedule B – Patent Rights.”

As a result, Defendants in the infringement litigation claimed that, in the absence of Schedule A, the patents-in-suit were transferred automatically. The result? Plaintiff did not have standing to enforce its rights to the patents-in-suit.

The Court rejected this assertion out of hand, in part because a paralegal who created Schedule B testified that she meant to call it Schedule A:

“While the Court understands Defendants’ concerns with Schedule B, the Court is persuaded . . . that Schedule B was, in fact, intended to be Schedule A and was used by the parties as Schedule A. In making this determination, the Court credits the testimony of Kate Maxwell and finds that Schedule B was mistitled and was intended to be Schedule A. [This] testimony concerning the creation of the document and its storage as a computer file supports its authenticity.”

Notable for litigators is the procedure followed to cure the ambiguity and establish the document’s authenticity: have the preparer testify to the error and the use of the document.

The Dow Chemical Co. v. Nova Chemicals Corp., C.A. No. 05-737-JJF (D. Del. July 30, 2010) (Farnan, J.).

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