It is common for commercial parties to agree not to attack the
validity of intellectual property held by one of the parties to the
agreement. However, a recent decision from the Ontario Superior
Court of Justice has raised questions about the enforceability of
these types of restrictive covenants.
Case Background
In
Loops v. Maxill Inc., 2020 ONSC 971, the Court
considered whether to grant an interlocutory injunction based on a
restrictive covenant in a settlement agreement to "not
directly or indirectly assist any person attacking the validity of
[the Patents]". The parties had previously been involved in
patent infringement litigation and the Ontario court was asked to
enforce a clause in the settlement agreement arising out of that
previous litigation.
