Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_06-cv-02138/USCOURTS-cand-4_06-cv-02138-6/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ATMEL CORPORATION, a Delaware

corporation; ATMEL SWITZERLAND, a

corporation; ATMEL FRANCE, a

corporation; ATMEL SARL, a

corporation,

Plaintiffs,

v.

AUTHENTEC, INC., a Delaware

corporation,

Defendant.

 /

No. C 06-2138 CW

ORDER DENYING

DEFENDANT'S MOTION

TO DISMISS

Defendant Authentec, Inc. moves pursuant to Federal Rule of

Civil Procedure 12(h)(3) to dismiss this action for lack of

standing. Plaintiffs Atmel Corporation, Atmel Switzerland, Atmel

France and Atmel SARL oppose the motion. The matter was submitted

on the papers. Having considered all of the papers filed by the

parties and the evidence cited therein, the Court denies

Defendant's motion. 

Case 4:06-cv-02138-CW Document 78 Filed 06/11/07 Page 1 of 8
United States District Court

For the Northern District of California

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BACKGROUND

On June 5, 1997, U.S. patent application no. 08/870,002 was

filed. On September 11, 2001, U.S. Patent No. 6,289,114 (the '114

patent) was issued and assigned to Thomson-CSF. In late December,

1999, while the patent application was pending, Thomson-CSF

assigned a majority of the shares in its subsidiary, Thomson-CSF

Semiconducteurs Specifiques (TCS) to a third party. As part of the

agreement, Thomson-CSF also assigned its interest in several

patents, including the '114 patent along with the majority interest

in TCS. The assignment was effective May 22, 2000. At some point

after the assignment TCS became known as Atmel Grenoble.

Until its sale in May, 2006, Atmel Grenoble was a wholly owned

subsidiary of Atmel Paris. Atmel Paris is a wholly owned

subsidiary of Plaintiff Atmel Corporation. Plaintiffs provide

evidence that, in the United States, Atmel Corporation alone has

practiced the patent and been responsible for its enforcement. 

On March 22, 2006, Atmel Corporation filed this suit, alleging

infringement of the '114 patent. On May 1, 2006, Atmel Grenoble

assigned its interest in its patents, including the '114 patent, to

Atmel Switzerland. On November 1, 2006, Atmel Corporation filed an

amended complaint joining Atmel Switzerland, Atmel France and Atmel

SARL as Plaintiffs and added claims regarding U.S. Patent No.

6,459,804 (the '804 patent). 

Defendant now moves pursuant to Federal Rule of Civil

Procedure 12(h)(3) to dismiss the action, arguing that Atmel

Corporation lacked standing at the inception of this case. 

 

Case 4:06-cv-02138-CW Document 78 Filed 06/11/07 Page 2 of 8
United States District Court

For the Northern District of California

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DISCUSSION

Standing is a threshold issue faced before reaching

substantive matters. See Stoianoff v. Montana, 695 F.2d 1214,

1223-1224 (9th Cir. 1983). Federal courts have the duty to dismiss

an action if standing is wanting. Bernhardt v. County of Los

Angeles, 279 F.3d 862, 868 (9th Cir. 2002). Standing has both

constitutional and prudential limitations. See Estate of McKinney

v. United States, 71 F.3d 779, 782 (9th Cir. 1995). The

constitutional standing requirement derives from Article III,

Section 2 of the United States Constitution, which restricts

adjudication in federal courts to "cases" and "controversies." See

Valley Forge Christian College v. Americans United for Separation

of Church and State, Inc., 454 U.S. 464, 471 (1982). Article III

standing is present only when (1) a plaintiff suffers a concrete,

particularized injury which is actual or imminent; (2) there is a

causal connection between the injury and the conduct complained of;

and (3) the injury will likely be redressed by a favorable

decision. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61

(1992); Wedges/Ledges of California, Inc. v. City of Phoenix, 24

F.3d 56, 61 (9th Cir. 1994). The absence of any one element

deprives a plaintiff of Article III standing and requires

dismissal. See Whitmore v. Federal Election Comm'n, 68 F.3d 1212,

1215 (9th Cir. 1995).

In addition to constitutional standing, the Patent Act limits

standing to sue for patent infringement. Title 35 U.S.C. § 281

provides, "A patentee shall have remedy by civil action for

infringement of his patent." The Patent Act defines patentee as

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United States District Court

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including "not only the patentee to whom the patent was issued but

also the successors in title to the patentee." Id. at § 100(d). 

The Federal Circuit notes that these provisions "have been

interpreted to require that a suit for infringement of patent

rights ordinarily be brought by a party holding legal title." 

Popat Int'l Corp. v. Rpost, Inc., 473 F.3d 1187, 1189 (Fed. Cir.

2007). Nonetheless, the court also held, 

Even if the patentee does not transfer formal legal

title, the patentee may effect a transfer of ownership

for standing purposes if it conveys all substantial

rights in the patent to the transferee. In that event,

the transferee is treated as the patentee and has

standing to sue in its own name.

Id. Further, the court held that an exclusive licensee with less

than all substantial rights in the patent also has constitutional

standing but "must normally join the patent owner in any suit on

the patent." Id. at 1193. The court made clear that the joinder

of the patent owner "is a 'prudential' requirement, not a

constitutional requirement based on Article III limitations, and

that an action brought by the exclusive licensee alone may be

maintained as long as the licensee joins the patent owner in the

course of the litigation." Id. (citing Intellectual Prop. Dev.,

Inc. v. TCI Cablevision of Cal., Inc., 248 F.3d 1333, 1348 (Fed.

Cir. 2001), Mentor H/S, Inc. v. Med. Device Alliance, Inc., 240

F.3d 1016, 1019 (Fed. Cir. 2001)). 

Defendant argues that it has learned through discovery that at

the time the original complaint was filed, Atmel Corporation, then

the only Plaintiff, did not own the '114 patent, then the only

patent in suit. Further, Defendant argues that Atmel Corporation

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was not an exclusive licensee. Therefore, Defendant argues that

Atmel Corporation lacked standing at the inception of the lawsuit

and the case must be dismissed.

Plaintiffs counter that Atmel Corporation has exclusive rights

to the '114 patent and that, as the parent company, it acts as an 

exclusive licensee to the patent. Plaintiffs cite Steelcase Inc.

v. Smart Technologies Inc., 336 F. Supp. 2d 714 (W.D. Mich. 2004),

where the Michigan court denied the defendants' motion to dismiss

the claims of plaintiff PolyVision, the parent company of

Greensteel, the patent owner. The court relied on evidence that

even though "there apparently was no written license agreement,

PolyVision was the sole licensee of the patent, Greensteel

permitted PolyVision to exclusively practice the patent, and

Greensteel granted PolyVision the right to enforce the patent." 

Id. at 718. Therefore, the court found that "PolyVision

effectively had exclusive control of the '309 patent and was

essentially one and the same with Greensteel." Id.

Defendant argues that Steelcase is distinguishable on two

grounds. First, Defendant notes that the issue before the

Steelcase court was whether the parent company was misjoined as a

plaintiff and that the patent owner had been a party to the case

since its inception. However, as stated above, the Federal Circuit

has held that where an exclusive licensee has constitutional

standing but lacks prudential standing, the litigation may be

maintained if the licensee joins the patent owner, as Atmel

Corporation has by joining Atmel Switzerland. See Mentor, 240 F.3d

at 1019. 

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1

Plaintiffs also argue that Atmel Corporation was an exclusive

licensee with all substantial rights. However, "if the license is

to be considered a virtual assignment to assert standing, it must

be in writing." Enzo APA & son v. Geapag A.G., 134 F.3d 1090,

1093-94 (Fed. Cir. 1998). Plaintiffs do not assert that any such

writing exists. 

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Defendant also argues that, unlike in Steelcase, the evidence

in this case demonstrates that Atmel Corporation did not have any

formal license rights to the patent at the time the case was filed. 

The May 1, 2006 transfer agreement that assigned rights in the '114

patent from Atmel Grenoble to Atmel Switzerland states, "Grenoble 

has not granted any licenses or other rights to the Intellectual

Property. In addition, Grenoble (i) has the full right, title and

ownership, free and clear of all liens, to such Intellectual

Property and Technology and (ii) holds all license rights to such

Intellectual Property or Technology." De Mory Declaration, Ex. 7

at 5. 

Plaintiffs counter that Atmel Corporation was effectively an

exclusive licensee, providing it constitutional standing, and that

its joinder of Atmel Switzerland, the patent owner, cured any

defect in prudential standing.1 As stated above, until Atmel

Corporation sold Atmel Grenoble, Atmel Grenoble was a wholly-owned

subsidiary of Atmel Paris and Atmel Paris was a wholly-owned

subsidiary of Atmel Corporation. Further, Atmel Corporation has

always been the only entity that practices and enforces the patent

in the United States.

Here, as in Steelcase, there is no evidence to suggest that 

either Atmel Grenoble or Atmel Switzerland has ever granted rights

in the '114 patent to any party other than Atmel Corporation. 336

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F. Supp. 2d at 718. Further, as in Steelcase, the patent owner is

the wholly-owned subsidiary of the licensee. Id. It is clear from

the evidence presented that Atmel Corporation has always had the

implicit right to make, use and sell the patented invention and to

control the enforcement of the patent rights. Therefore, Atmel

Corporation has always acted as the exclusive licensee of the '114

patent. The fact that Atmel Grenoble stated that it had not

granted any licenses or other rights to the '114 patent at the time

it transferred the patent to Atmel Switzerland does not undermine

the evidence that Atmel Corporation, the parent company of both

subsidiaries has "effectively had exclusive control" of the '114

patent since the time the suit was filed. Id. 

As in Steelcase, Atmel Corporation as the parent company

controlling the patent and Atmel Grenoble and later Atmel

Switzerland as the wholly-owned subsidiary that owned the patent

were "essentially one and the same," further supporting a finding

of constitutional standing. Id.; see also, Mi-Jack Products, Inc.

v. The Taylor Group, Inc., 1997 U.S. Dist. LEXIS 11439, *22 (N.D.

Ill. 1997) (finding standing based upon the "extremely close"

relationship between the parent patent holder and the wholly-owned

subsidiary licensee). Therefore, Atmel Corporation had

constitutional standing as an exclusive licensee at the inception

of the case and cured the defect in prudential standing when it

joined Atmel Switzerland, the patent owner. 

CONCLUSION

For the foregoing reasons, the Court DENIES Defendant's motion

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2

Both parties seek to recover their costs in litigating this

motion. The Court finds no grounds for such sanctions and denies

both requests. 

8

to dismiss (Docket No. 75).2 

IT IS SO ORDERED.

Dated: 6/11/07 

CLAUDIA WILKEN

United States District Judge

Case 4:06-cv-02138-CW Document 78 Filed 06/11/07 Page 8 of 8