Ownership/Standing

  • BASICS: “A patentee shall have remedy by civil action for infringement of his patent.” 35 U.S.C. § 281. Question of law reviewed de novo. Diamond Coating (Fed. Cir. 05/17/16) (aff’g no standing where rights plaintiff obtained from original patent owner by contract were not enough to constitute “all substantial rights” or legal title). Plaintiff must show both constitutional standing and prudential standing. Constitutional standing requires that “the plaintiff must have suffered or be imminently threatened with a concrete and particularized ‘injury in fact’ that is fairly traceable to the challenged action of the defendant and likely to be redressed by a favorable judicial decision.” Lexmark (Static Control) (U.S. 03/25/2014) (Lanham Act false advertising action); Phigenix (Fed. Cir. 01/09/17) (dismissing for lack of constitutional standing PTAB petitioner’s appeal). “To establish injury in fact, a plaintiff must show that he or she suffered “an invasion of a legally protected interest” that is “concrete and particularized” and “actual or immi­nent, not conjectural or hypothetical.” Spokeo (U.S. 05/16/2016) (plaintiff bears burden of proof to show Art. III standing). “A ‘concrete’ injury must be ‘de facto’; that is, it must actually exist,” but it may be intangible. A procedural violation of a statute may or may constitute concrete injury. Id. See Morrow (Fed. Cir. 09/19/07) (2-1) (rev’g finding of Constitutional standing; long discussion of both Constitutional and “prudential” standing). Patent owner or exclusive licensee has constitutional standing, but patent owner usually joins exclusive licensee to satisfy “statutory standing” or “prudential standing” concerns. “Joining the legal title holder only satisfies prudential standing requirements. It cannot cure constitutional standing deficiencies.”); Lone Star (Fed. Cir. 05/30/19) (vacating dismissal; “A necessary party [e.g., the patent owner] who is subject to service of process and whose joinder will not otherwise destroy a court’s subject-matter jurisdiction must be joined,” “involuntarily if need be”).
  • As A General Rule, The Inventor Owns Patent Rights In The Invention: The “general rule [is] that rights in an invention belong to the inventor.” Bd. of Tr. of the Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc. (U.S. 06/06/2011) (“basic principle, codified in the Patent Act, that an inventor owns the rights to his invention.”)
  • Employee May Have An Implied Contractual Obligation To Assign Patent Rights In Inventions To Employer Where Employee Hired To Invent: Under the “hired to invent” doctrine of contract law, “an employer may ‘claim an employee’s inventive work where the employer specifically hires or directs the employee to exercise inventive faculties.’” James (Fed. Cir. 04/20/18) (rev’g dismissal of correction of inventorship suit; there was at least a factual dispute as to whether contract created implied contract to assign patent rights). The ‘“doctrine is expressly equitable, and creates only an obligation for the employee to assign to his employer.’” Id.
  • Plaintiff Patent Owner Must Show It Has Legal Title To Patent; Equitable Title Is Insufficient For Standing: Alleged patent owner must prove that it has legal title to the patent. Morrow (Fed. Cir. 09/19/07) (rev’g finding that plaintiff had standing where plaintiff had contractual right to sue but had no exclusive license or other exclusionary rights in patent). Even if party without legal title might have cause of action to force legal title owner to convey title to it, that does not give that party standing to sue for patent infringement. Advanced Video II (Fed. Cir. 01/11/18) (2-1) (aff’g dismissal of complaint for lack of standing where co-inventor remained as co-owner, not joined in lawsuit, because “will assign” provision in employment agreement was a mere promise to assign that did not transfer legal title to employer (who later assigned rights to plaintiff. “While [plaintiff] could potentially seek to enforce its alleged ownership rights, or allege a breach of [the co-inventor’s] duties as a trustee [under her employment agreement] by her failure to transfer those rights, by bringing an action against [her], no party brought such an action.”)).
  • Patent Owner Must Show Legal Title Not Just Equitable Title To Patent: Alleged patent owner must prove that it has legal title to the patent. Morrow (Fed. Cir. 09/19/07).
  • Plaintiff Must Have Constitutional Standing When Lawsuit Filed, Which Defect Cannot  Be Cured Retroactively: “A court may exercise jurisdiction only if a plaintiff has standing to sue on the date it files suit. … [I]n a patent infringement action, ‘the plaintiff must demonstrate that it held enforceable title to the patent at the inception of the lawsuit’ to assert standing. Thus, ‘if the original plaintiff lacked Article III initial standing, the suit must be dismissed, and the jurisdictional defect cannot be cured’ after the inception of the lawsuit.” Abraxis (Fed. Cir. 11/09/10) (complaint must be dismissed for lack of standing despite nunc pro tunc assignment to plaintiff eight months after complaint filed); Enzo (Fed. Cir. 01/09/98) (“nunc pro tunc assignments are not sufficient to confer retroactive standing,” but unclear if statutory standing or Constitutional standing); but see Schwendimann (Fed. Cir. 05/13/20) (2-1) (aff’g plaintiff had right to sue for infringement despite initial defect in assignment transferring patent to wrong party, later reformed by trial court per state law).
  • Consider Mootness Even If Patent Owner Had Standing When Sued: “Standing under Article III, section 2, clause 1 of the United States Constitution is reviewable at all stages of a proceeding, but it is a requirement that must be satisfied when the case is filed or brought. Mootness, by contrast, while sometimes colloquially referred to as standing, is the requirement, also under Article III, that the plaintiff have a personal stake in the case or controversy throughout the action.” Walker Digital (Fed. Cir. 12/30/14) (2-1) (under seal) (Case: 13-1520 Document: 105-2) (aff’g dismissal with prejudice; patent owner assigned asserted patents to another, settling defendant via unambiguous language in settlement agreement extending transferred patents to continuations of named patents); Arcelormittal III (Fed. Cir. 05/16/17) (2-1) (not moot because “at no time before the court entered summary judgment did ArcelorMittal unconditionally assure Defendants and their customers that it would never assert” the patent claims against them.”)
  • Dismissal For Lack Of Standing May Be With Or Without Prejudice: Dismissal for lack of standing normally without prejudice unless, e.g., plainly unlikely can be cured. Nat’l Oilwell (Fed. Cir. 01/25/17) (non-precedential) (dismissed with prejudice and fees awarded for period beginning when plaintiff refused to produce document that showed it lacked of ownership of the patent).
  • No Requirement To Decide Inventorship When Deciding Standing: As improper inventorship can be pled as an invalidity defense under Sec. 102(f), a court need not decide whether the named inventors are the true inventors, when deciding a standing challenge. Drone Tech. (Fed. Cir. 09/29/16) (aff’g denial of standing challenge).
  • TIPS:

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