Truck-Lite v. Peterson; Peterson v. Truck-Lite
Peterson threatened Truck-Lite (“TL”) with an action for infringement of a patent directed to a turn signal lamp. In response thereto, TL filed a declaratory judgment action in federal court in New York seeking a judgment that Peterson’s patent is not valid and that, in any event, TL does not infringe any claim thereof. Peterson then sued TL in federal court in Missouri for infringement of its patent.
The parties then engaged in motion practice to determine whose suit should go forward. This involved the preparation and filing of several briefs with each court. During the pendency of the motions, the parties, through their negotiating principals and lawyers, engaged in negotiations to settle their respective disputes. After several months, the parties came to terms, which involved Peterson granting to TL a royalty free license under their asserted patent (TL paid no sum of past alleged damages), and TL granting to Peterson a royalty bearing license under one of its patents directed to another lighting product. During the negotiations TL had charged, without filing suit, Peterson with infringement of said patent. In addition to agreeing to pay a going forward royalty, Peterson agreed to pay TL a sizeable lump sum for past infringement of the TL patent. A comprehensive settlement and cross-licensing agreement was negotiated drafted and finalized. The parties dismissed their respective actions and released one another from liability.