Important New Patent Decision on Successor Liability

In a recent decision, the Federal Circuit held that a U.S. subsidiary of Daewoo Electronics was the successor-in-interest to a now-defunct U.S. subsidiary whose business it continued. Funai Electric Co., Ltd. v. Daewoo Electronics Corp. et al., Nos. 2009-1225, 2009-1244. The Federal Circuit applied state successor liability law, notwithstanding the fact that the business was transferred as part of an agreement executed solely between parent companies in South Korea, the law of which does not recognize successor liability that is not expressly assumed by contract. As successor-in-interest, the present Daewoo subsidiary was held liable for an $8 million default judgment against the predecessor, in addition to damages for infringing sales it made after the transfer of the business.