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Continuation Drafter
Continuation practice · Tier E

A covenant on the parents is not a licence to the children

Sherwin-Williams v. PPG

The unilateral-versus-bilateral distinction is what carried it, and a covenant naming only the parent patents was read as reaching only those patents.

How to read the ledger below. Each numbered point carries the kind of evidence behind it. ESTABLISHED is stated in the authority's own text, with a locator. IMPLEMENTED is the rule as the authority actually applied it. OBSERVED is carried by a source outside this one. ASSUMED is the drafter's inference, flagged as such and not the authority speaking. Quotations are checked against a cached copy of the primary source by script.

In one paragraph

The Federal Circuit affirmed in Sherwin-Williams v. PPG on 25 July 2024, in a nonprecedential decision, that a unilateral covenant not to sue on two parent patents created no implied license to their continuations. The accused infringer relied on cases holding that a covenant not to sue on parent patents as to an accused product confers an implied license over patents asserted against the same product that disclose the same subject matter, but conceded that all of those cases involved bilateral covenants, and the court found that distinction important. Because the covenant was unilateral only the grantor intent bears on its scope, and on its face it named 2 patents and did not extend to the continuations. The court also refused to read its own earlier dismissal of a reexamination appeal as moot to imply anything about the continuations, noting it had known at the time that they were being litigated elsewhere.

Reader summary

Two patents were in reexamination. To moot an appeal, their owner gave the challenger a unilateral covenant not to sue, worded as covering infringement of any claim of those two patents. Continuations of those patents were being litigated elsewhere at the same time.

Years later the challenger argued that the covenant had implicitly licensed the continuations too, relying on a line of cases holding that a covenant not to sue on parent patents as to an accused product confers an implied license covering patents asserted against the same product that disclose the same subject matter.

The court rejected it on a distinction the challenger itself had conceded: those cases all involve bilateral covenants. Where the covenant is unilateral, only the grantor's intent bears on its scope, and the court declined to presume that an implied license extends to continuations the covenant does not name. On its face this one named two patents and nothing else.

The court also refused to read anything into its own earlier dismissal of the reexamination appeal as moot. That dismissal concerned the parent patents, and the court had known at the time that the continuations were in litigation elsewhere.

Two limits belong with the holding. It is nonprecedential. And the language about presumption is phrased tentatively rather than as a rule.

Why this matters when you are drafting

A family's continuations are separate assets and separate liabilities. Claim 1. A settlement, covenant or licence that resolves the parents leaves the continuations where they were, at least where the instrument is unilateral and does not name them.

The unilateral-bilateral line is the operative distinction and it is conceded rather than litigated here. Claim 5. That makes it a weak precedent for the distinction and a strong warning that it exists.

Read the instrument for what it names. Claim 8. The covenant was directed to infringement of any claim of two identified patents, and that is how far it reached.

A continuation strategy is worth something in a dispute for exactly this reason. Claim 10 notes the continuations were in litigation elsewhere while the parents were being covenanted away. Whether that is admirable or aggressive, it worked, and this record shows the mechanism without endorsing it.

Nothing here decides what a bilateral covenant would do. Claim 12. The cited line of cases stands.

Weight this record correctly. It is nonprecedential and its central move is a distinction the losing party conceded. It is evidence about the law rather than a statement of it.

What the authority establishes

  1. [ESTABLISHED, the disposition on the cross-appeal] "We affirm the district court's finding that Sherwin's Covenant Not to Sue did not create an implied license to the continuation patents." (P. 24.)
  1. [ESTABLISHED, the same holding in the opinion's own summary] "we agree with the district court that Sherwin's unilateral covenant not to sue on the parent patents did not create an implied license for continuation patents, and affirm on the cross-appeal." (P. 2.)
  1. [ESTABLISHED, what the covenant was and why it was given] The patent owner "provided PPG a unilateral covenant not to sue" with respect to the two patents that were the subject of the Board decisions, and argued the appeal had become moot as a result. (P. 3.)
  1. [ESTABLISHED, the rule the challenger relied on] PPG pointed to cases for the proposition that absent mutual intent to the contrary, "a patentee's covenant not to sue on parent patents as to an accused product confers an implied license covering patents asserted against the same product that disclose the same subject matter as the parent patents." (P. 23.) The quotation begins after a bracketed alteration in the source, per hazard 9.
  1. [ESTABLISHED, and this is the whole case] "as PPG acknowledges, these cases" all involve bilateral covenants, and "We find this distinction important." (P. 23.)
  1. [ESTABLISHED, the consequence, stated tentatively] "Absent a bilateral covenant, we do not think there would be a presumption that any implied license extends to any continuation patents not specifically covered by the covenant." (P. 23.) Note the phrasing: the court says what it does not think, not what the rule is.
  1. [ESTABLISHED, why unilateral changes the analysis] "Because it is a unilateral covenant, only Sherwin's intent would be relevant in interpreting the scope." (P. 23.) A bilateral instrument has two parties' expectations to interpret; a unilateral one has one.
  1. [ESTABLISHED, what the document said] "On its face, the covenant not to sue does not extend to the continuation patents. It is explicitly directed only to" infringement of any claim of the two named patents. (P. 23.)
  1. [ESTABLISHED, the earlier mootness dismissal carried no implication] "The dismissal of the appeal in Valspar I as moot does not imply that the covenant was intended to cover continuation patents." (P. 23.) The earlier decision had described the covenant as absolving the challenger "of any possible infringement of the subject matter of these patents" (P. 24.), and "We were thus explicit that the mootness holding only concerned the parent patents at issue in that case." (P. 24.)
  1. [ESTABLISHED, the court knew the continuations were live] "we were well aware that there was ongoing litigation over the continuation patents in the District of Minnesota at the time we dismissed Valspar I as moot." (P. 24.) Awareness of the parallel litigation cut against, not for, an implied license.
  1. [ESTABLISHED, why the cross-appeal was decided at all] Although the implied-license question was moot as to the claims held invalid, a counterclaim sought an implied license as to other claims of the same patents, and "we agree that the cross-appeal is not mooted by the affirmance of invalidity of the asserted claims." (P. 23.)
  1. [IMPLEMENTED, and it is the transferable point] Claims 5, 6 and 7 together mean the implied-license line of cases was not narrowed; it was held inapplicable. A practitioner reading only this case would wrongly conclude that a covenant never reaches continuations. What it holds is that a UNILATERAL one does not, on this document, without more.
  1. [ASSUMED, drafter's inference, flagged as such] The exposure this record identifies runs the other way from most of the corpus: it is a risk to the party RECEIVING the covenant, not to the patent owner. Anyone taking a covenant to resolve litigation over a family should treat continuations as unaddressed unless the instrument names them. The opinion does not frame it as drafting advice; it follows from claims 6 and 8.

Quotations, verified against the source

All from the Federal Circuit's nonprecedential opinion. Page locators computed from the docket stamp.

  • "we agree with the district court that Sherwin's unilateral covenant not to sue on the parent patents did not create an implied license for continuation patents, and affirm on the cross-appeal." (P. 2.)
  • "provided PPG a unilateral covenant not to sue" (P. 3.)
  • "a patentee's covenant not to sue on parent patents as to an accused product confers an implied license covering patents asserted against the same product that disclose the same subject matter as the parent patents." (P. 23.)
  • "we agree that the cross-appeal is not mooted by the affirmance of invalidity of the asserted claims." (P. 23.)
  • "as PPG acknowledges, these cases" (P. 23.)
  • "We find this distinction important." (P. 23.)
  • "Absent a bilateral covenant, we do not think there would be a presumption that any implied license extends to any continuation patents not specifically covered by the covenant." (P. 23.)
  • "Because it is a unilateral covenant, only Sherwin's intent would be relevant in interpreting the scope." (P. 23.)
  • "On its face, the covenant not to sue does not extend to the continuation patents. It is explicitly directed only to" (P. 23.)
  • "The dismissal of the appeal in Valspar I as moot does not imply that the covenant was intended to cover continuation patents." (P. 23.)
  • "of any possible infringement of the subject matter of these patents" (P. 24.)
  • "We were thus explicit that the mootness holding only concerned the parent patents at issue in that case." (P. 24.)
  • "we were well aware that there was ongoing litigation over the continuation patents in the District of Minnesota at the time we dismissed Valspar I as moot." (P. 24.)
  • "We affirm the district court's finding that Sherwin's Covenant Not to Sue did not create an implied license" (P. 24.)

Tensions and open questions

Claim 6 is not a holding about presumptions and reads as if it might be. The court says it does not think there would be a presumption. That is a considered view expressed in a nonprecedential disposition, and it is the sentence most likely to be over-read.

Whether a bilateral covenant would have reached the continuations is not decided. Claim 4 states the proposition PPG advanced and claim 5 distinguishes it. The cited cases are untouched.

"Specifically covered by the covenant" is not defined. Claim 6 turns on it and claim 8 applies it to a document naming two patents by number. Whether a covenant naming a family, or naming subject matter, would suffice is unaddressed.

The relevance of the parallel litigation is asserted rather than reasoned. Claim 10 treats the court's awareness of the Minnesota case as supporting the outcome, without explaining what work that awareness does.

Only the cross-appeal is distilled here. The main appeal on anticipation, evidentiary exclusions and judicial estoppel was read at summary level and this record makes no claims about it.

What this record does and does not cover

The cross-appeal on implied license, the covenant's terms as the court describes them, and the treatment of the earlier mootness dismissal were read end to end.

What was NOT read closely, and is therefore outside what this record can support: the entire main appeal, meaning anticipation, the evidentiary rulings and judicial estoppel, and the chemistry. This record says nothing about why the claims were held invalid. The two earlier Valspar decisions are known here only through this opinion's account of them, and both are themselves nonprecedential.

Currency

This record was verified against its primary source on 2026-08-15. That is a fidelity check: the quotations, locators and attribution are accurate to that source. Whether the authority has since been narrowed, distinguished, abrogated or reversed has not been checked here. Confirm it still stands before relying on it.