Franchise Participants as Proper Patent Opponents: Walker Process Claims

Robert W. Emerson · 22 Vand. J. Ent. & Tech. 507

Abstract

Franchise parties may be sued for patent infringement, or they may seek to sue others for an antitrust injury as the result of a fraudulently obtained patent. Indeed, franchisors and franchisees may simultaneously fall under both categories—sued for infringement but aggrieved because the very basis of that suit is illegitimate in their eyes. These franchise parties may turn for relief to a patent-validity challenge authorized in the seminal case Walker Process Equipment, Inc. v. Food Machine & Chemical Corp. Franchise participants—franchisees and franchisors alike—may be the ideal Walker Process claimants. When these types of cases occur, the damages within the franchise system are fairly uniform, as the harm often relates to a core element of franchising: licenses, shared by all parties to a franchise network.

One of the hallmarks of Walker Process claims is how loose the standing requirements are. Both direct purchasers and indirect purchasers of a patented device or process may bring a challenge based on the patent holder’s alleged fraud in obtaining the patent and the resulting antitrust injuries. In the franchising context, Ritz Camera & Image, LLC v. SanDisk Corp. and its progeny provide franchisors, franchise associations, and franchisees with procedures to protect themselves and those they represent from patent trolling and sham litigation. The Walker Process claim and its resulting principles and practices may also have benefits beyond patent-law regimes for use in other areas of value to licensors and licensees.