Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_18-cv-03201/USCOURTS-azd-2_18-cv-03201-1/pdf.json

Parties Involved:
Hicon USA LLC
Defendant
Highrel Incorporated
Defendant
Dong Weon Hwang
Defendant
Plastronics H-Pin Limited
Plaintiff
Plastronics Socket Partners Limited
Plaintiff
Paul Schubring
Defendant

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WO

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Plastronics Socket Partners Limited and 

Plastronics H-Pin Limited, 

Plaintiffs, 

v. 

Highrel Incorporated, Hicon USA LLC, 

Dong Weon Hwang, and Paul Schubring, 

Defendants. 

No. CV-18-03201-PHX-SMB 

ORDER 

 Pending before this Court is a Motion to Dismiss Claims for Lack of Subject-Matter 

Jurisdiction filed by Defendants HighRel, Inc. (“HighRel”) and HiCon USA, LLC (“HiCon 

USA”) (collectively “Defendants”).1

 (Doc. 31, Mot.). Plaintiffs Plastronics Socket 

Partners Limited and Plastronics H-Pin Limited2

 (“Plaintiffs” or “Plastronics”) filed an 

opposition, (Doc. 43, Resp.), and Defendants filed a reply, (Doc. 52, Reply). 

I. Factual Background 

Plastronics Socket is a provider of technology and innovation for the semiconductor 

industry, including burn-in sockets and related components. (Doc. 11 ¶ 2, “FAC”). In 

2003, Defendant Dong Weon Hwang was an engineer based in Korea. (FAC ¶ 36). In 

 

1

 This motion is filed only by Defendants HighRel, Inc. and HiCon USA LLC, and not 

Defendants Hwang or Shubring. For the sake of this motion, the Court will use 

“Defendants” to refer to the filing parties. 2

 In December 2012, Plastronics Socket formed Plastronics HPin through a divisive 

merger. (Doc. 11 ¶ 79). 

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2004, he joined Plastronics Socket as its Chief Technology Officer (FAC ¶ 36). Before 

joining Plastronics, Hwang had an idea for a new contact pin (the “Invention”), which 

became the subject of U.S. Patent No. 7,025,602 (the “’602 Patent”). (FAC ¶¶ 9, 39). The 

’602 Patent was issued April 11, 2006 and entitled “Contact for Electronic Devices.” (FAC 

¶ 9). On September 24, 2005, prior to obtaining the patent, Hwang and Plastronics 

executed a royalty agreement (the “Royalty Agreement”), under which Plastronics agreed 

to pay for the development of the Invention and worldwide patent rights where needed, and 

Plastronics was to be assigned the patent jointly with Hwang. (FAC ¶ 40). The Royalty 

Agreement also prohibited both Plastronics Socket and Hwang from granting a license for 

the Invention without approval from the other party. (FAC ¶ 40). 

On October 4, 2005, also prior to obtaining the patent, Hwang and Plastronics 

Socket executed an assignment agreement, assigning half of the right, title, and interest in 

and to the Invention and any letters patent that may issue thereon (the “Assignment and 

Agreement”). (FAC ¶ 41). The other half was assigned to Hwang. (FAC ¶ 41). 

Additionally, both Hwang and Plastronics Socket agreed to not transfer any interest in or 

license the Invention without the written consent of all Assignees. (FAC ¶ 42). 

In April 2008, Hwang decided to return to Korea and resigned his position with 

Plastronics. (FAC ¶ 56). Also in April 2008, Hwang formed HiCon Ltd. to manufacture 

and sell competing products. (FAC ¶ 57). On or about July 27, 2009, Hwang formed 

HiCon Co. to design and sell competing products. (FAC ¶ 60). In 2016, Hwang and 

Defendant Paul Schubring formed HiCon USA,3

 which signed an exclusive distribution 

agreement with HiCon Ltd. and/or HiCon Co. for the territory of North America. (FAC 

¶ 65). 

On October 10, 2018, Plaintiffs filed their First Amended Complaint (FAC) alleging 

counts of patent infringement against Defendants HiCon USA and HighRel, as well as a 

count of tortious interference with business expectancy, prospective business relations. 

 

3

 HiCon USA is an Arizona limited liability company and a wholly owned subsidiary of 

HighRel. (FAC ¶ 15–16). 

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Plaintiffs also alleged various counts against Defendants Hwang and Shubring, all but one 

of which was dismissed by this Court’s May 9, 2019 order, (Doc. 58). Defendants now 

move to dismiss, asserting that Plaintiffs lack standing because this patent infringement 

suit was not brought by both owners of the patent. (Mot. at 2). 

II. Legal Standard 

Under Federal Rule of Civil Procedure 12(b)(1), a party may move to dismiss a 

claim for lack of subject-matter jurisdiction. “A defect in standing is a defect in subject 

matter jurisdiction, for ‘standing in its most basic aspect can be one of the controlling 

elements in the definition of a case or controversy under Article III.’” Knowles Elecs. LLC 

v. Iancu, 886 F.3d 1369, 1380 (Fed. Cir. 2018) (quoting ASARCO Inc. v. Kadish, 490 U.S. 

605, 613 (1989)). “The doctrine of standing limits federal judicial power and has both 

constitutional and prudential components.” Media Techs. Licensing, LLC. v. Upper Deck 

Co., 334 F.3d 1366, 1369 (Fed. Cir. 2003). Constitutional standing requires that a plaintiff 

suffer an injury-in-fact, that there be a causal connection between the plaintiff’s injury and 

a defendant’s conduct, and that the plaintiff’s injury be capable of redress by a favorable 

court decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). “In addition to 

the three-prong Article III standing test delineated in Lujan, standing doctrine embraces 

judicially self-imposed limits, known as prudential limits, on the exercise of jurisdiction.” 

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

Cir. 2001). 

“Standing to sue for infringement stems from the Patent Act, which provides: ‘[a] 

patentee shall have remedy by civil action for infringement of his patent.’” Israel BioEng’g Project v. Amgen, Inc., 475 F.3d 1256, 1264 (Fed. Cir. 2007) (quoting 35 U.S.C. 

§ 281). “Where one co-owner possesses an undivided part of the entire patent, that joint 

owner must join all the other co-owners to establish standing.” Id. “[O]ne co-owner has 

the right to limit the other co-owner’s ability to sue infringers by refusing to join voluntarily 

in the patent infringement suit.” Id. (citing Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 

1456, 1468 (Fed. Cir. 1998) (holding that “as a matter of substantive patent law, all coCase 2:18-cv-03201-SMB Document 59 Filed 05/22/19 Page 3 of 9
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owners must ordinarily consent to join as plaintiffs in an infringement suit”)). 

Courts have, however, recognized at least two exceptions to the rule that all coowners must consent to join as plaintiffs in an infringement suit. “‘First, when any patent 

owner has granted an exclusive license, he stands in a relationship of trust to his licensee’ 

and can be involuntarily joined as a plaintiff in the licensee’s infringement suit.” 

STC.UNM v. Intel Corp., 754 F.3d 940, 946 (Fed. Cir. 2014) (quoting Ethicon, 135 F.3d at 

1468 n.9). Second,“[i]f, by agreement, a co-owner waives his right to refuse to join suit, 

his co-owners may subsequently force him to join in a suit against infringers.” Id. (quoting 

Ethicon, 135 F.3d at 1468 n.9). Courts have also recognized a possible third situation in 

holding that “an exclusive licensee that does not have all substantial rights does have 

standing to sue in his own name when ‘necessary to prevent an absolute failure of justice, 

as where the patentee is the infringer, and cannot sue himself.’” Textile Prods., Inc. v. 

Mead Corp., 134 F.3d 1481, 1484 (Fed. Cir. 1998) (quoting Waterman v. Mackenzie, 138 

U.S. 252, 255 (1891)). 

III. Analysis 

Both parties agree that Plastronics and Hwang retain equal shares of all the rights in 

the ’602 patent. (Mot. at 2) (Resp. at 3). Therefore, the inquiry here is not one involving 

an exclusive licensee, but rather two co-owners. Neither party argues that Plastronics does 

not have constitutional standing to sue. See Evident Corp. v. Church & Dwight Co., 399 

F.3d 1310, 1314 (Fed. Cir. 2005) (holding that plaintiff with significant rights to the patent 

“[c]learly . . . had constitutional standing to sue under the patent”). The question is one of 

whether Plastronics has prudential standing to bring a patent infringement action without 

Hwang joined as a plaintiff. As noted above, it is well-settled law that “[w]here one coowner possesses an undivided part of the entire patent, that joint owner must join all the 

other co-owners to establish standing.” Israel Bio-Eng’g Project, 475 F.3d at 1264. 

Defendants argue that Plaintiffs do not have standing for two reasons. First, Defendants 

argue that Hwang’s involvement as a defendant does not confer standing. Second, 

Defendants argue that none of the recognized exceptions to the rule that all co-owners must 

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be joined as plaintiffs apply to this action. 

A. Hwang’s Status as a Defendant Does Not Confer Standing 

Defendants argue that Hwang’s status as a defendant in the action does not confer 

standing on Plastronics. (Mot. at 9). Defendants assert that the factual situation in Evident 

Corp. v. Church & Dwight Co., 399 F.3d 1310 (Fed. Cir. 2005), is inapplicable here. In 

Evident, a licensee of a patent brought a suit against an alleged infringer. Id. at 1312. The 

alleged infringer filed a counterclaim seeking a declaratory judgment that the patent was 

not infringed, invalid, and unenforceable. Id. The alleged infringer joined the patent owner 

as a third-party defendant in its counterclaim. Id. The court held that the patent was 

unenforceable, which the Federal Circuit affirmed. Id. During the pendency of appeal, the 

lower court awarded $1.3 million in attorney’s fees to the alleged infringer. Id. at 1312–

13. The patent owner and the licensee then appealed the award of attorney’s fees, and for 

the first time, the patent owner challenged whether the licensee had standing to bring the 

original action without having joined the owner. Id. at 1313. The court stated its rule that 

“a patentee should be joined, either voluntarily or involuntarily, in any infringement suit 

brought by an exclusive licensee,” but noted that 

the policy concerns motivating the need for a patent owner to 

be joined in an infringement suit with its licensee—principally, 

from the standpoint of an accused infringer, avoidance of 

multiple lawsuits and liabilities, and, from the standpoint of the 

patentee, ensuring that its patent is not invalidated or held 

unenforceable without its participation—are surely met here by 

[the patent owner] having been joined as a third-party 

defendant. 

Id. at 1314. The Federal Circuit held that the patent owner’s “presence in the litigation as 

a third-party defendant satisfied any standing requirements.” Id. 

Evident presents another possible exception to the rule that a patent owner must be 

joined as a plaintiff in a lawsuit against an alleged infringer. But Defendants argue that the 

court’s reasoning in Evident does not apply here because in Evident, the third-party 

defendant’s interests were aligned with the Plaintiff’s (the licensee’s) interests, and here, 

Hwang, as a co-defendant and not a third-party defendant, is sided against the patent’s 

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co-owner. (Mot. at 9). Plaintiffs respond asserting that nowhere in the Evident opinion 

did the court rely on “any alleged alignment of interests with plaintiff for its decision.” 

(Resp. at 7). 

The facts underlying the Evident holding are dissimilar to the facts here. As an initial 

matter, Evident dealt with a patent owner and a licensee—not two co-owners. Furthermore, 

in Evident, the patent owner and the licensee were both defendants to the counterclaim and 

both defending the patent. That is not the case here. Hwang is not defending the patent 

with Plastronics and is only in the lawsuit because of one remaining count for breach of 

fiduciary duty in regard to confidential information—a count separate from the 

infringement counts. The facts here do not parallel the facts in Evident. 

Also, the Evident court discussed that both the patent owner and the licensee “were 

clearly parties to the lawsuit, and [the patent owner] participated throughout the duration 

of the lawsuit.” 399 F.3d at 1314. The question of standing was first raised on a second

appeal to the Federal Circuit and after seven years of litigation. Id. The court did not need 

to question whether the patent owner was going to be involved in the entirety of the 

litigation—it had already happened. Again, that is not the case here. At present, Hwang 

is only tied as a defendant to this lawsuit by one count which is unrelated to the 

infringement claims. (Doc. 58) (dismissing all counts against Hwang except breach of 

fiduciary duty in regard to confidential information). Hwang can be dismissed as a 

defendant from the lawsuit at any point, leaving Plastronics as only one of two co-owners 

to bring the remainder of the suit against the alleged infringers. Unlike in Evident, this 

Court is not able to overlook the concern that the litigation may at some point proceed 

without involvement from Hwang. 

The Court is not aware of any case that extends Evident’s holding to a case where the 

co-owner of a patent is joined merely as a defendant for a claim unrelated to defending the 

patent. While Evident does appear to make another limited exception to the rule that all 

co-owners must join as plaintiffs, the Court does not find that this exception extends to the 

facts here. 

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Plaintiffs also argue that under Morrow v. Microsoft Corp., 499 F.3d 1332 (Fed. Cir. 

2007), Hwang’s presence as a defendant is sufficient to confer standing. (Resp. at 3). But 

Plaintiffs’ reliance on Morrow is misplaced. Morrow does not specifically discuss the 

situation of one co-owner refusing join the other co-owner in a patent infringement suit. 

Morrow described three general categories of plaintiffs encountered when analyzing 

constitutional standing in patent infringement suits: “[1] those that can sue in their own 

name alone; [2] those that can sue as long as the patent owner is joined in the suit; [3] and 

those that cannot even participate as a party to an infringement suit.” Id. at 1339. Plaintiffs 

assert that here, they fall into category two. But in context, category two is primarily aimed 

at the case of an exclusive licensee. The Morrow court said that plaintiffs in category two 

hold “exclusionary rights,” but not all substantial rights to the patent, and that “the patentee 

who transferred these exclusionary interests is usually joined to satisfy prudential standing 

concerns.” Id. at 1340. The Morrow court indicated that in cases dealing with category 

two plaintiffs, “joinder of the patentee is not necessary” when “the patentee is the infringer, 

or the prudential concerns are not at play in a particular case.” Id. But these statements 

were made in context of a patent owner being forced to join suit with an exclusive licensee; 

Morrow does not contemplate the situation of two co-owners. Plaintiffs fall more likely 

into category one, as they can sue in their own name as long as any patent co-owners are 

also joined as plaintiffs. 

Plaintiffs have not provided an exception that allows Hwang’s presence as a 

defendant to obviate the rule that a co-owner must be joined with the other co-owner in 

order for there to be standing. The Court therefore declines to recognize a new exception 

and holds that Hwang’s presence in the lawsuit as a defendant does not confer standing. 

B. Recognized Exceptions 

In addition to arguing that Hwang’s presence as a defendant confers standing, the 

parties also analyze the recognized exceptions to the rule that a co-owner must join as a 

plaintiff. The parties focus their arguments on the exception which requires a co-owner to 

join suit if the co-owners had an agreement waiving their rights to refuse to join the other 

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co-owner in an infringement suit. See STC.UNM, 754 F.3d at 946 (“If, by agreement, a 

co-owner waives his right to refuse to join suit, his co-owners may subsequently force him 

to join in a suit against infringers.”). Defendants assert that neither the Royalty Agreement 

nor the Assignment and Agreement require Hwang to “join a patent-infringement suit or 

allow[] Plastronics to file suit without Mr. Hwang.” (Mot. at 4). In opposition, Plaintiffs 

assert that the Assignment and Agreement obligates Hwang to join the suit and that Hwang 

waived his right to refuse to join. (Resp. at 10). 

But as Defendants have correctly noted, “Plastronics does not seek and has never 

sought to join Mr. Hwang as a plaintiff.” (Reply at 4). While the Court notes that Hwang 

may well have waived his right to refuse to join an infringement lawsuit through the 

Assignment and Agreement, the Court declines to analyze any possible waiver since 

Plastronics has not moved to join Hwang. And as Defendants have noted, further 

procedural complications may arise due to Hwang’s current status as a defendant. (Reply 

at 4) (citing United States v. Interstate Commerce Comm’n, 337 U.S. 426, 430 (1949)). 

IV. Tortious Interference 

Defendants also move to dismiss Count 10—Tortious Interreference with Business 

Expectancy, Prospective Business Relations—arguing that this count is “predicated on 

patent infringement as the underlying improper conduct.” (Mot. at 10). Plaintiffs respond 

arguing that “Plastronics’ tortious interference claims against HighRel and HiCon USA are 

not solely confined to Defendants’ patent infringement.” (Resp. at 13). The Court notes 

that if there was anything alleged beyond patent infringement, it was dismissed pursuant 

to this Court’s prior order. (Doc. 58 at 7–8). Because of the above dismissal of the patent 

infringement claims and this Court’s prior order, Count 10 is dismissed. 

Accordingly, 

IT IS ORDERED GRANTING Defendants’ Motion to Dismiss Counts 1 and 2 (the 

patent infringement counts) for lack of subject-matter jurisdiction. Count 10 is also 

dismissed. These counts are dismissed without prejudice. 

/// 

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IT IS FURTHERED ORDERED GRANTING Plaintiffs leave to file a second 

amended complaint in accord with this order and the Court’s prior order (Doc. 58). The 

deadline for filing the second amended complaint is June 22, 2019 (thirty days from the 

date of this order). 

 Dated this 22nd day of May, 2019. 

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