## United States Court of Appeals for the Federal Circuit 06-1218 ISRAEL BIO-ENGINEERING PROJECT, Plaintiff-Appellant,

v. AMGEN INC., IMMUNEX CORPORATION, WYETH, and WYETH PHARMACEUTICALS, INC., Defendants-Appellees, and YEDA RESEARCH AND DEVELOPMENT CO., LTD., Defendant-Appellee, and INTER-LAB LTD. and SERONO INTERNATIONAL S.A., Defendants-Appellees. Thomas L. Hamlin , Robins, Kaplan, Miller & Cir esi L.L.P, of Minneapolis, Minnesota, argued for plaintiff-appellant Israel Bio-Engineering Project. With him on the brief were Stephen P. Safranski , Brian A. Mayer , and Ross A. Abbey

. Barbara R. Rudolph , Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P, of Washington, D.C., argued for defendants-appellees Amgen Inc., et al. With her on the brief were Gerald F. Ivey and William L. Strauss . Of counsel on the brief were Stuart L. Watt , Monique L. Cordray , Karen L. Nicastro , Kathleen Fowler , and Gail Katz , Amgen Inc., of Thousand Oaks, California; Vicki G. Norton , Wilson Sonsini Goodric h & Rosati, P.C., of San Diego, California; and Nicole W. Stafford , Wilson Sonsini Goodrich & Rosati, P.C., of Austin, Texas. Nicholas Groombridge , Weil, Gotshal & Manges LLP, of New York, New York argued for defendant-appellee Yeda Research and Development Co., Ltd. With him on the brief were Michael Eisenberg , Daniel J. Melman , and Peter Sande l. Of counsel was John D. Garretson , Fish & Richardson, P.C. of New York, New York. Wayne M. Barsky , Gibson, Dunn & Crutcher LLP , for defendants-appellees InterLab Ltd., et al of Los Angeles, California. Appealed from: United States District Cour t for the Central District of California Judge R. Gary Klausner* Honorable Patti B. Sari s, Distri ct Judge, U nited States Distric t Court for the Distric t of Massachusetts, sitting by desig nation. 

### Un ited Sta tes Co urt o f App ea ls fo r the Fe de ral C ircu it

06-1218 ISRAEL BIO-E NGINE ERING PROJE CT,

Plaintiff-Appella nt,

v. AMGEN, INC ., IMMUN EX CORPOR ATION, WYETH, and W YETH PHARM ACEUTICALS, IN C., Defendants-App ellees, and YEDA RESEAR CH AND D EVELOPMENT CO., LTD., Defendant-Appellee, and INTER-LAB LTD. a nd SERONO IN TERNATIONAL, S.A. , Defendants-App ellees.

DECIDED: J anuary 29, 2007

Before BRYSON , PROST, Circuit J udges , and SARIS, District Ju dge

. * SARIS, District Ju dge

. This appeal invo lves a compl ex dispute o ver the o wne rsh ip o f a pa tent . Pl aint iffAppellant

Israel Bio -Enginee ring Projec t (“IBEP”) appea ls from a judgm ent in a patent06-1218 2

infringement

action granting Defendant-App ellee Yeda Research and Development Comp any, Ltd.’s (“Yeda”) moti on for summary judg ment on the ground that IBEP lacked standing to bring the suit becaus e it did not have sole owner ship of the patent. This court affirms. FACTUA L BACKGROUND 1. Four Contracts This dispute ove r owners hip of the patent inv olves four

inter-rel ated contracts. Yeda is an Isra eli corporation that markets and commercializ es inventi ons resulti ng from research cond ucte d at t he Weiz mann Inst itute of S cience, a multi-disciplinary research institute. Yeda e nter ed in to ne gotia tion s wi th Inter-Y ed a Ltd., a joint venture forme d in Israel in 1979 between Yeda and Inter-Pharm, an Israeli com pany wholly owned by

Serono International S.A., to finance vari ous Weizmann rese arch proje cts a nd to comm ercia lize the resu lts of the resear ch. On September 1 4, 1981, Yeda and I nter-Yeda ex ecuted a handwritten agreement, w hich pr o vided that I nter-Yeda w ould finance four spec ified research projects during a five year project term, including the one at iss ue here. This initial agreement was later amended, as will be explaine d later. That same day, Yeda sent a side letter to Inter-Yeda offe ring to cooperate with Inter-Yeda in revising the contract if it fou nd outs ide fu nding. Shortlyafterwards in 1982, Inter-Yeda began ne gotiating with IBEP, a New York limited partnership, to secure funding for the four research projects. These negotiations generated three agreements. First, on December 27, 1982, IBE P entered into a contract with the State of Israel ( “the R&D C ontract”) w hereby IBEP committed to spend between1 Portions of one of the three agreements — the so-cal led TOS Agreement — were set to expire well bey ond 1987. However, thesesections ar e largely irrelevant. 06-1218 3 $7 million and $10 million on four research programs. Paragraph 5 of the R&D Contract provides: “[IBEP] w ill be entit led, [subject to two para graphs w hich are not appl icable], to exploitall the Res earch result s, including any Paten ts, in any manner, includi ng the manufacture of Products, g ranting of li censes, t ransfer and/or s ale of any ri ghts in any matter resulting from the Researc h.” The Israel i gover nment consented to the terms of the two con tracts which IBEPand Inter-Yeda were about to enter. Three days later , IBEP signed a pair of contracts with Inter-Yeda on Decembe r 30, 1982. All three contracts were setto expire on December 27, 1 987, and were to be co nstr ued in acc orda nce wit h the laws of the State of Israel. 1 The first contrac

t between IBEPand Inter-Yeda, called the Sub- Rese arch and Development

Contract (“Sub-R&D Contract”), provided that IBEP would fund the rese arch operations conduc

ted by Inter

-Yeda in cooperation w ith Yeda. Of particular significance to this dispute, Paragraph IX(A) of thi s contract specified: On behal f of th e Partnership[IBEP], Developer [Inter- Yeda] shall apply for and obtain patents i n Developer ’s and/or Yeda’s name(s) on all inventions resulting from theR&D P rogr ams which D eveloper, i n its sole discret ion, considers advisableto apply for a nd obtain; prov ided, however, that the beneficial ownership of all rights, title and inte rest in and to such patents and patentapplications that form a part of the Proprietary Inform atio n s hall be and hereby are assigned to the Partnership from the date the Partnership shall have made the first payment to the Developer pursuant to this Agreement

in perpetuity , unless a nd un til th e Deve lope r sha ll have pu rchased the Proprietary Informati on in respect thereof according to th e provisi ons of the TOS Agree ment. (Emphasis added). Paragraph X(A), entitled “Prop erty Rights,” then provides:06-1218 4

Subject to the prov isions of the TOS Ag re ement, any and al l of the Proprietary Information shall become the sole property of the Partne rship [IB E P]. Subject to the provisi ons of Paragraph IX above r egarding the registr ation of patents in Developer’s [Inter-Yeda’s] and/or Yeda’s name(s), Developer

shall ass ign to [IBEP] all its rig hts, title and interest i n and to the Proprietary Information and s hall re quire all persons employed by it, presently or in the future, to do the same un less and until Developer shall become the owner

of all of the Partner

ship’s ri ghts, titl e and interest in and to the Pr

oprie tary Informa tion i n accor

dance w ith th e TOS Ag reeme nt

. Nothing contained herei n shall preventDe veloper from i ncluding i n any patent regis tration the name( s) of the indiv idual inv entor(s) as required by law, provided that no proprietary rights are vested in such individuals. For purposes of thiscontractual provisi on, the term “Propr ietary In formation” wa s defined, in relev ant part, to mean: any and all inventions, patent appl ications and patents (wher ever applied for or granted), tr a de secrets, technical inform ation (including all blueprints, plans, workbook

s, d rawing s, specificati ons, formulas and pr ocesses) and othe r tech nolo gy or kn owhow devel oped in the R& D prog rams

. (Emphasis added) . The R&D Prog rams referenced by this agreement were designed to “be effective for a period co-ter minous with . . . the Execut ion Period defined in the R&D Agreement” w ith Israel, that is until December 27, 1987. The other

contract betw

een IBEP and Inter-Yeda is the Technolo gy Option and Sale Agreement

(“The TOS Con trac t”), w hich was executed on D ecember 30, 1982. I n the paragraph entitled “Property Rights,” the contract repeats, “Any and all of the Proprietary Information developed during the term of the Sub-R&D Agreement shall become the sole property of the Partnershi p [IBEP] subjec t to the rig htof Inter-Yeda to exerci se the Option with respect thereto, as pr ovided in pa ragraph 5 hereof.” (Emphasi s added). In Par agraph 5, entitled “Op tions to Purc hase Proprietary Informati on,” the TOS Contract g ranted InterYeda the sole and exclusive option to “purchase all of [IBEP’s] rights, title and interest in2 There is no ev idence that the pr ovisionsof this paragr

aph were tr iggered. 06-1218 5 and to the Proprietary Informatio n rel ating to each Product that hasbeen Reduced to Practice or in respect to which a patent applicat ion has been filed p rior to the expirati on or termination of the Sub-R&D Ag reement [December 27, 1987].” If Inter -Yeda timel y exercis ed the option, it had to make c ertain payment s to IBEP. Inter-

Yeda never

exercis ed that option. Moreover, the TOS agre eme nt expressly discus ses researc h and development after the term of the Sub-R&D Co ntract. It gives IBEP the right to finance additional research and development i f, after the term of the Sub-R &D agreement and dur ing the ter m of the TOS Contract, In t er-Ye da “desires to conduct further research and development w ith respect to the Propri etary Informati on.” 2 It then prov ides: “If after the termination of the Sub-R&D Agreement and during the term hereof, any Pr oduct is Reduced to Practiceor if a patent application is filed with respect there to, [IBE P] shall be ent itled to payments . . . . “ IBEP’s right to royal ties woul d be proportiona tely reduced if “more money is spent t o conduct additi onal researc h and development . . . than has been spent b y [IBEP].” Fina lly, one day

after IBEP and Inter

-Yeda sig ned these contrac ts, Inter-Yeda and Yeda amended their or iginal 1981 hand-scraw led agreements

. This amended agr eement distingui shes betwe en “u nrel ated resu lts, ” “pre -exist ing re sult s,” “n ew r esults, ” and “any other results.” It provides: “The title in and to any New Result which will be discov ered or developed during the Project Term othe r than an Unrelated Result shal l belong to [IBEP] immediately upon its discovery or development .” The parties ag reed that titl e to any “pre-3 W hile the record is not clear on this point, there s till appears to be a dispute as to whether

the inventi on took

place in 1986 or 1987. This issue is not material to this appeal. 06-1218 6 existing results” stemming from Yeda’s resear ch be twe en September 14, 1981 and December 30, 1982 would still vest in Yeda. Moreover , it prov ides that titl e to “any other results which s hall not belong to [IBEP]” w ould belong to

Yeda. The “pr

oject term” o f

the 1981 contract w

as defined to be the five-year per iod of the contract effective September 14, 1981. 2. The Inventions ByApr il 1987 — after the expiration of the original 1981 contract, but pri or to th e term ina tion of the 1982 contracts — three sc ientists, w ho worked i n the R&D prog ram directed at identifyi ng novel anti-cellul ar factors, di scovered an d partia lly pur ified the Tumor Necrosis Factor

Bindi ng Protein ( “TBP”) in human urine. This pr otein, when bound to a substance in thebody calle d the Tu mor NecrosisFactor (“ TNF”), prov ed capable of

c om bating rheumatoid arthr itis. TBP is the subject matter of U.S. Patent N o. 5,981,701 (the “’701 patent” ) entitled “ Tumor Necrosis Factor Inhi bitory Pr

otein and itsPurification, ” which issued on Novembe r 9, 1999, naming four inventor s: David Wallach, Hartmut Engelmann, Dani el Aderka, and M enachem Rubinstei n. Yeda was named the assignee of the patent. The ’701 patent contai ns three separ ate claims. ’701 Patent col.16 ll.3 4-65. Claim 1 recites: “Aprotein capable of inhibi ting the bin ding of TNF to cells and of inhi biting the cytotoxic

effect of TNF, wherein said protein is obtainable from human ur ine” and has certain features. Id. col.16 ll.34-36. The parties do not dispute that thi s subject matter was discover ed prior to the expi ration of the Sub-R &D Agreement. 3 On September 13, 1987,4 There is evid ence t hat Rubenstein w as the R&D manag er of Inter-Yeda. Rubinstein was employ ed by both Weizmann and Inter- Yeda at the time of the invention. He worke d four days a w eek for Inter-Y

eda. The parties still seem to dispute hi s employment statu s, and we do not wade into that dispute her e. 06-1218 7 Yeda filed the Israel i patent application, No. 83878 (the “’ 878 priority document”), r

elating to these discoveries. Clai ms 2 and 3 of the ’701 Pa tent, however, relate to inventions made in 1988, after the termination of IBEP ’s Sub-R&D Contract with Inter-Yeda. Cl aim 2 covers“[a] substantially purified protein obtainable from human ur ine, capable of interacting with TNF

so as to inhibi t the binding of TNF to cells and to inh ibit the cy

totoxic effect of TNF ” and containing a specifically identif ied amino acid sequenc e. Id. col.1 6 ll.5 1-55. Clai m 3 recites “[a] pharmaceutical compo sition for use in treating conditions where TNF. . . is to be eliminated from the body or its effect in the body is t o be ant agonized , compri sing a protein in accordance with claim 2 and a pharmaceutically acceptab le carrier.” Id. col.16 ll.60-65. One of the named inventors, Dr. Menachem Rubinstein, 4 began wor king w ith the other inventors

on th i s project i n January 198 8, after the expir

ation of the Sub-R& D Contract. Both partiesagree that R ubinstein was brought i nto the research team at this time to hel p puri fy and seque nce theprote in li sted i n clai ms 2 and 3 of the ’701 patent. He worked with Dr . Engelmann in 1988 “to complete the purification,” in Rubinstein’s words, and they purified it sufficiently to determine an amino acid sequence. The inventors were able to isolate and purify this protein and ascertain the amino acid seq uence of this protein someti me during 1988. Rubinstein and the other inventors

executed an agreement date d5 “Under Israeli law, the discoveries of an employee are the property of his or her employer.” Israeli Bio-Eng’g Project v. Amgen, Inc. , 401 F.3d 1299, 130 4 (Fed. Cir. 2005). 06-1218 8 July11, 1988, assigning their rig hts in the invention to Yeda. 5 The patent applic ation was notfiled until Septembe r 12, 1988; it claimed pri ority bas ed on the ‘878 priori ty document filed in September 1987. Itis und isputed that Profe ssor Rubinstein’s special skills, in collaboration with Dr. Engelmann, res ulted in the substantially purified TBP d iscussed in claims 2 and 3 of the ’701 patent and in the p atent applicati on. Purificati on of the protein w as needed to allow the scientists

to determine the amino acid seq uence. IBEP cl aims that one of the named inventors, David W allach, partiall y purifie d the pro tein in 1 987, al though the record seems to support (at best) a finding that W allach’s “studies”were focused on purifying the protein and he was “ at tempting to do s o.” Indeed, the r ecord demonstrate s that in 1988, experimentsto pu rify

and cha racterize T BP were ongo ing. Nevert hele ss, IB EP do wnpla ys Rubinstein’s

contribution as a continuati on of Wallach’s partial puri fication. 3. Litigation In 2002, IBEP filed an action in the U nited States Di strict Co urt for the Centr al Districtof California, al leging t hat the defendant pharmaceutica l companies Amg en, Inc., Immunex

Corpo ratio n, W yeth, and W yeth P harm aceu tica ls, In c. (co llect ively “ Amg en”) infringed claim 1 of the ’701 pate nt with the pharmaceutical Enbrel®, a genetically engineered protein used to treat sev ere rheumatoid ar thritis and psoriasis. Sh ortly after the filing of the s uit, Yeda and S erono moved to interv ene; only Yeda prevail ed. In 2003, Yeda filed a motion for s ummary judg ment against IB EP, arguing that IBEP could notclaim6 The original appeal invo lved other issues not r elevant her

e.

7 In the p revio us ap pea l, th is cou rt all owe d S erono and Inter- Lab, Ltd. to intervene. IBEP , 401 F.3 d at 1 307. Thes e par ties hav e jo ined in Yeda’ s br ief. 06-1218 9 full title to the ’701 patent bec ause the inv entors wer e not right ly consi dered Inter-Y eda employees at the time of the ag reement and thus did not pass the inventi on by operati on of Israeli la w t o Inter-Yed a, which w as contractual ly req uired to assi gn title to IBEP. Agreeing with thi s argument, the district court gr anted the motion for s ummary judg ment. IBEP appealed. 6 We reversed, holding there were genuine iss ues of material fact o n the issue of whether the inventorswere Inter -Yeda employees at the t ime of the invent ion under Israel law. Of si gnificance to this appeal, thi s court held: O n remand , if IBE P is ab le to e stabl ish th at Wallach w as an em p loyee o f Inter-Yedaat the time of the invention, IBEP may be able to esta blish that it has an ownership interest in the patent. IBEP can establish an ownership interest in the patent as long as the rig hts of even one of the inventors has passed to it. Even an ow nership inter est, however, would not be sufficient to give I BEP prudential standing to s ue for infringement , as IBEP would have to join a ll the oth er co-owne rs in orde r to esta blish suc h stand ing. Israel Bio-Eng’g Project v. Amgen Inc. , 401 F.3d 1299, 1304-05 (Fed. Cir . 2005) 7 (citations omitted). We noted: “The district court did not reach the question of sta nding.” Id. at 1305 n.4. After

the case was remanded to the distri ct court, Yeda again moved for summary judgment, this time ( not surpris ingly) with a focuson standing. Yeda arg ued th at IBEP lacked standing because the Sub-R&D Contract expired in 1987 and because cl aims 2 and 3 of the ’701 patent wer e based on post-198 7 discover ies outside of the project term. As such, total owner

ship of the entire patent could not have been passed to IBEP under the Sub-R&D Contract. A

t most, Yeda contended, IBEP coul d claim only a pro rata undi vided06-1218 10

sha re of t he entire patent, and without full owner

ship of the ’701 paten t, IBEP lacked standing to s ue. In a well- reasoned opinion, the distri ct court all ow ed the defendant’s motion for summary judgment, hold ing that IBEPlacked standing because claims 2 and 3 of the ’701 patent“did not fall within the operation of the sub-R&D ag reement,” and even if IBEP had

an ownershi p interest i n TBP, the subjec t ma tter in cla im 1, IBEP “at most” had a parti al interest in the whole patent. Israel Bio-Eng’g Project v. Amgen Inc. , No. CV 02- 06860 RGK (MANx) (C.D. Ca l. Dec. 21, 20 05) . Stym ied again, IBEP filed a timely notice of appeal. This court has appellate jur isdiction un der 28 U.S.C. § 1295. DISCUSSION 1. Standard o f Revi ew Whether a party has

standing to sue is a que stion of law that this court reviews de

nov o

. Prima Tek II, L.L. C. v. A- Roo Co. , 222 F.3d 1372, 1376 (Fed. Cir . 2000). I f Appellant

did not have standing tomaintain an infringeme nt action, then jurisdiction is not proper on appeal. See id. Althou gh there are multiple ways to dis pose of challeng es to standing in the district court, the parties he re addressed s tanding through a motion for summary judgment, one frequently used method. See generally 13A Charle s Alan W rig ht, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3531.15 (2d ed. 19 84) (pointing out that“[m]any cas es have sug gested that su mmary judg ment procedure i s appropriate, ” but arguing it is “better to use the preliminary hearing device as a means ofre quiring th e plai ntif f to carry the burden of establis hing standin g”). This court reviews a district court’s06-1218 11

grant of summary judg ment de no vo

. Conr oy v . Reebok Int’l , Ltd. , 14 F.3d 1570, 1575 (Fed. Cir. 1994)

. Summary judg ment is appropr iate when there is no g enuine issue as to any material fact and the moving party is entitled to j udgment as a matter of law. Fed. R. Civ. P. 56(c); Johnston v. IVAC Corp. , 885 F.2d 1574, 1576- 77 (Fed. Cir . 1 989). I n deciding whether s ummary judg ment was approp riate, we view the evidence in a light most favorable to the party

opposing the motion and with doubtsresolved in favor of the opponent, which in this cas e is IBEP. See Transmatic, Inc. v. Gulton Indu s., Inc. , 53 F.3d 1270, 1274 (Fed. Cir. 1995). 2. Ownership The key ques tion on appeal i s whether IBEP had standing to maintain the pa tent infringement

action agai nst Amgen w ithout the joi nder of Yeda, the as signee of the patent. IBEP argues that it has standin g because it i s the so le exclus ive ow ner of the patent by virtue of the Sub-R&D ag reement. Itis a bedrock

tenet of patent law

that “an invention p resumpt ively belongs to i ts creator.” Teets v. Chr omalloy Gas

Turbine Corp. , 83 F.3d 403, 406 (Fed. Cir

. 1996). Consistent

with the presumption that the inventor

owns hisinvention, the “[p]atent issuance creates a presumption that the named inventors are the true and only inventors.” Ethicon, Inc. v. U.S. Surgical Corp. , 135 F.3d 1456, 1460 (Fed. Cir. 1998). W hen, as here, multiple inventors are listed on the face of the paten t, eac h co-owner “presumptively owns a pro rata undivided interest in the entire patent, no matter w hat their res pective co ntributions.” Id. This holding that “a joint in ventor as t o e ven one clai m enjoys a pr esumption of ownership in the entire patent”flows from the l anguage of 35 U.S.C. § 11 6, which p ermits06-1218 12

joint inventors to “applyfor

[a] patent jointly” even though: “(1) they did not physically work together or at the same ti me, (2) each di d not make the same type or amount of contribution, or (3) each did not make a co ntrib ution to the subject matt er of every claim of the patent.” Still, issues of patent ow nership are di stinct from qu e st ions of inventorship. See Beech Aircraft Corp. v. EDO Corp. , 990 F.2d 1237, 1248 (Fed. Cir . 1993) (“It is elementary thatinventors hip and owner ship are separ

ate issues.” ); see also Jones v. Hardy , 727 F.2d 1524, 1528 (Fed. Ci r. 1984) (“ eac h claim must be considered as defini ng a separate invention.”). We have held: “All that is requi red of a joint i nventor is that he or she ( 1) contribute in some sig nificant manner to t he conception o r reduct ion to practi ce of the invention, (2) make a contributi on to the claimed invention t hatis not insign ific ant i n qua lity, when thatcontribution is measured ag ainst the dimensi on of the full inv ention, and (3) do

more than merely

explain to the real inv entors wel l-known concepts and/or the curr ent state of the art.” Pannu v. Iola b Corp. , 155 F.3d 1344, 1351 (Fed. Cir . 1998) (citations omitted). This interplay

between inv

entorship and ow nership crea tes the anomaloussituation thata co-inven tor of even a s ingle cl aim can then assert a ri ght of joint ow nership ov er an entire patent wit h multiple claim s. See Fina Oil & Chem. Co. v . Ewen , 123 F.3d 1466, 147 3 (Fed. Cir . 1997) (citations omitted) (“One need not alone conceive of the entir e invention, for this would obviatethe concept of joint inventors hip.”); see also Ethicon, 135 F.3d at 1460 (“This rul e presents the pr ospect that a co- inventor of onl y one claim might gain entitlement to ownership ofa patent with dozens of claims.”).8 Section 261 states that “patents sh all have the attributes of pers ona l prop erty. Applicationsfor patent, patents, or any i nterest therei n, shall be as signable i n law by an instrument of w riting.” 06-1218 13 Thus, under the r ule in Ethicon , a co-inventor of even one claim in the ’701 patent, which has three claims, pre sumptively has a pro rata undivided ownershi p interest i n the entire patent. For this reason, the district court held that IBEP had no standing to press it s patent infring ement action becaus e Menachem Rubins tein was aco-inven t or of th e subject matter of

claims 2 and 3, which was not di scovered un til after the conclusion of the R&D progr

am, and therefore, IBEPdid not have sole owner ship of the patent. 3. Standing IBEP contendsthat

it h ad standi ng b ecau se un der the termsof the Su b-R&D Contract it had the ri ght to the ass ignment of titl e to all patents “resulti ng from” the R& D progr am. Standing to sue for infring ement stems from the Patent Act, which pr ovides: “ [a] patentee shall hav e remedy by civil action for infringement of his patent.” 35U.S.C. § 281. As defined in § 100(d), “patentee” includes not only the patentee to w hom the patent wa s issued but also “the successors in title to the pa tentee.” 35 U.S.C. § 100(d). Patentowners may assig n or transfer th eir owner ship interes ts in the patent as personal property. 35 U.S.C. § 261. 8 Under long established l aw, a patentee or his assignee may grant

and convey

to another: ( 1) the whole p atent, (2) an undivided p art or share of that exclusive right, or (3) the exclusi ve rig ht under the patent w ithin and throughout

a specified p ar t of the United States. See Vaupel Textile KG v. Maccanica Euro Italica, S.A .A. , 944 F.2d 870, 873 ( Fed. Cir. 1991); see also W aterman v. MacKenzie , 138 U.S. 252, 255 (1891) (hol ding that in the firs t and third cas es, the assig nee may sue06-1218 14

in its name alone; in the second case, i t may sue “jointl y wi th the assig nor”). Where one

co-owner

p ossesses an u ndivided part of the entire pat ent, that joint owner must join all the other co-ow ners to establ ish standing

. IBEP , 401 F.3d at 1305 (citi ng Prima Tek II , 222 F.3d at 1377). With certain exceptions not applicabl e here, one co-owner has t he right to limit the other co- owner’s ability to sue infring ers by refusing to j oin voluntarily in the patent infringement

suit. Ethicon , 135 F.3d at 1468 (ho lding “as

a matter of substanti ve patent law, all co-ow ners must ordi narily consent to join as plaintiffs in an inf ringement suit”); see al so Schering C orp. v. Roussel-UC LAF SA , 104 F.3d 341, 345 ( Fed. Cir. 1 997) (“On e

co-owner

has the right

to impede the other

co-owner

’s ability to sue infring ers by r

efusing to voluntarily join in such a suit.”). Absent the voluntary joinder of all co-owner s of a patent,

a co-owner

acting al one will lack standi ng. Prima Tek II , 222 F.3d at 1377 ( recogniz ing that the general rule that “a patentee shou ld be joined, either voluntari ly or i nvoluntari ly, in any infringement

suit b rough t by a n ex clusive licensee” w as “prudential rather than constitutional in nature.”). IBEP claim s it ha s sta ndin g to su e fo r pat ent i nfr ingem ent b ecau se it o wn s the whole patent by ass ignment. See Speedplay, I nc. v . Bebop, Inc. , 211 F.3d 1245, 1250 (Fed. Cir. 2000) ; Rite-Hite Corp. v. Kelley Co., Inc. , 56 F.3d 1538, 1551 (Fed. Cir. 1995) (en banc). To prevail, IBEP must establ ish that Inter -Yeda was contr

actually required to assign all Rubinstein’s ownership rights in the ’701 patent to it. Ownershi p depends upon “the substance of w hatwas gr anted” throug h assignment

. Vaupel Textile , 944 F.2d at 874. In construing the substance of the assignment, a court must car efully consi der the intenti on of the parties and t he language of the grant. Id.06-1218 15

4. The Scope of the Assignment To elude the steel trap of the Ethicon joint ow nership rul e, IBEP argue s that th e Sub-R&D Contract, r

ead properly

under app licab le Isr aeli law, give s IBE P excl usive ownershipover

the patent because this agreement givesit the rig ht to an assig nmentof “all rights, title and inte rest” to “all in ve ntions resulting from the R&D Prog rams.” IBEP contends that a genuine issue of material fact remains on the issue of w hether Rubinstein’s further purification of the protein described in claims 2 and 3 “resu lted f rom” the R&D Prog ram. As a threshold matter, Yeda contends that this a rgument, as w ell as others , was waived because it w

as not presented in the district court and was rai sed for the fir st tim e

on appeal. See Pentax Cor p. v. Robi son , 135 F.3d 760, 762 (Fed. Cir. 1998 ) (cit ations omitted) (stating that “this court wil l not address issues rai sed for the first time on appeal

or issues not

presented on appeal ”). IBEP concedes — as it must — that it did not make this exact arg ument in support o f ownership. Plaintiff argue s that it is notmaking a new claim of ownership, but rather a new argument to sup port its persistent claim of ownership under the Sub-R&D Contract. See Lebron v. N at’l R.R. Passenger C orp. , 513 U.S. 374, 379 (1995) (ci tations omitted) (holding that “[o]nce a federa l claim is properlypresented,

a party can make any arg ument in support o f that claim; part i es are no t limited to t he precise arguments they made below”). Ordin arily, th is court hasdeclined to consider arg uments that wer e not presented to the distri ct court. See, e. g. , Pandrol U.S.A., L.P. v . Airboss R y. Prods., Inc. , 320 F.3d 1354, 1 366-67 (Fed. C ir. 2003) ( holding that defendant’s arguments were w aived w he n06-1218 16

they were not r

aised in res ponse to the motion for summary judg m e n t )

. “ Wi th a few notable exceptions , such as some j urisdicti onal matters, appell ate courts do not consider

a party’s new theories, lodged first on appeal.” Sage Prods., Inc. v. Devon Indus., Inc. 126 F.3d 1420, 1426 (Fed. Cir. 1 997) (declining to consider new infring ement arguments on appeal). This rule serves the salutar y purpose of per mitting the t rial judg e most familiar with a complex r

ecord to addres s the issue fir st. Thus, any

party w ho fails to rai se an argument in the trial court does so at his peril. This case, howev

er, is in t he gray area . IBEP based its origi nal argument befor e the district

court on the l anguage of Paragraph I X of Sub-R&D Contract, al beit not the “resulting from” languag e also contained in that secti on. Because the par ties argued about the meaning of

this p aragr aph in th e dis trict cour t, we conclude they are not bound by

the prec ise a rgum ents raise d bel ow. IBEP protests bit

terly tha t ithas never seen the fruits of i ts invest ments, and that any contract construction that gave it a non-exclusive ownership in an in ventio n developed during the R&D peri od would defeat th e intention of the par ties in v iolation of I sraeli contract law. Ac cording to IBEP’s expe rt, un de r Is rael i co ntr act law , themean ing of a contract depends excl usively on the intention of the parties. (Decl. of Gabr iela Shalev ¶ 22.) To deter mi ne the pur pose of the contract , a court must consider “not just the

co ntract language, but all of the ex trinsic ev idence regar ding the ci rcum stance s surrounding the contract, particular ly the neg otiations pri or to the formation of the contract and the parties’ conduct in the course of performan ce and afterwards.” See State of Israel

v. Aprofim Hous. &

Enter. , 49(2) P.D. 265 at 40, ¶ 17 (1995) (“A contrac t is interp reted on06-1218 17

the basis of

the parties’ i ntent. This inte nt constitutesthe goals, aims, interes ts, and plan that the parties wished jointly to implement.”). The questi on, then, i s whether the parties i ntended only to assign to IBEP title to patents for Proprietary Information developed during the R&D period, which ended in December 1987, or

whether th ey intended togive I BEP the right to the assig nment of all patents, patent applications, or inventions resultin g from the R& D program s. Yeda highlig hts the languag e in the Sub-R &D Contract that provi des that “the benefic ial ownership of all rig hts, title, and interest i n and to such patents and pate nt applications that f orm a p art of the Propri etary Informati on shall be and her eby are ass igned to [IBEP ].” (Emphasis added). The term “Proprietary Information” is in turn defined by the contract a s patents, patent applica t ions, and inventions “developed in the R&D programs.” IBEP ’s interpretati on is rooted in the fir st clause of the s entence of this par agraph w hich prov ides that on behalf of

IBEP, Inter-Yeda“shall appl y for and obtai n patents” in i ts name and/or Yeda’s name, “on all inventions resulting from the R&D Prog ram which [I nter-Yeda], in its sole discretion , considers advisable to a ppl y for and obtai n.” (Emphasis added). Put another way, IBEP’s argument req uires this court to discern the scope of the subject matter to which I BEP was ass igned “all rights, title and inte rest.” IBEP’s reliance on the “resulti ng from” lang uage is n ot ul tima tely p ersu asive because that provi sion, when read as a whole, ex pressly

limits IBEP ’s property

rightsby providing that IBEP should only receive “beneficial ow nership of all rig hts, title and interest” in the Proprietary Informati on fo rmed during the R&D prog ram. By defini tion, the R&D program was of finite d uration; thus, the period duri ng whic h the Propr ietary In f ormation06-1218 18

could be discov ered is time- limited. IBEP argues that the R&D Agreement betw een IBEP and Israel lends support to its inter pretation becaus e it gives IBEP an entitlement to exploit and commercialize “rights in any matter resulting from the Research.” However, this documentcannot be so broadly r ead because it al so explic itly appr oves the ti me limitations incorporated i n the Sub-R&D Contract by expressl y referenci ng this ag reement. Moreover, Yeda’s interpretation i s more consis tent with the intention of the par ties

as illustra ted by the other contracts. According to IBEP’s ex pert on Is raeli law , “the inte rpre tive rule of the contr act as a w hole relates not only toan isolated contract but also to a set of documents or agreements made between the same parties, as a reliable source in rea liz ing the p urpo se of the contr

act. ” ( Dec l. o f Gabriela S halev ¶ 24.) The TOS Contract includes language that similarly limits p roperty rights to Proprietar

y Information “developed in th e R&D prog rams,” w hich means “developed during the term of the SubR&D Agreement.” (Emphasis added). This w ording confir ms the limited temporal scope of th e Sub-R&D Contract’s Proprietary Information term. By definition , when the R &D program ended in December 1987, IBEP was not en titled to further assignments of any other newly developed i nventions, e ven when these i nvention s built on proprietary information develop ed durin g t he R&D proces s. In the TOS ag reement, the parti es negotiated with ex

quisite detail IBEP’s financial rig hts with respect to suc h subsequent research. While it may rue the barg ain it stru ck, IBEP is bound by it. Alte rnat ively, IBEP proteststhat by combi ning the three clai ms in one patent, InterYeda forfeited its ri ghts to claims 2 and 3. However, under the Sub-R&D Contract, InterYeda could file for patents i n its discr etion; it had the option under the Sub -R&D Contract06-1218 19

to aggreg ate claims in vented duri ng the R&D programs tog ether with claims for in ventions developed aft erward s in th e sam e pat ent, eve n though the effect of this decis ion was to dep rive IBEP of exclusive ownersh ip ove r the whole patent. Thus, even though th ere is

some evidenc e to support IBEP’s factu al argument that Rubinstein’s subst antial purificatio n of TBP was a co ntinuation of work started by

Wallach in the R&D prog ram, IBEP has not claimed that the subjec t matter of claims2 and 3 was discover ed during tha t time period. Signi fica ntly, IBEP has not challenged inventorship, nor has it brought a breach of contract claim

. IBEP cites the well-es tablished rul e that patent assi gnments “attac h to patents as

a whole, not individual claims.” Ethicon , 135 F.3d at 1466. W hile this is true, the Sub-R&D Contract governs IBEP’s property rights, and it is entitled onlyto ownership of patents on the subject matter

included w ithin Propr ietary In formation, nothing more. As such, while

an assignment of a pa tent must atta ch to the paten t as a whol e, here the iss ue was

owner ship o f a futureinve ntion, whi ch beca me the s ubject matter of only one cl aim. In a final twist on its argument, IBEP argues that Rubinst ein’s ass ignment of the ’701 patent to Yeda was a nullity because the paten t assignment in the Sub-R&D Contract is a present assi gnment of future rig hts. Fi lmTec Corp. v. Allied-Signal Inc. , 939 F.2d 1568, 1572 (Fed. Cir. 1991) (“If an assignment ofrights in an invention is made prior to the existence of

the inventi on, this may be viewed as an assig nment of an expectant interest.”). Under IBEP’s theory , o nce the inve ntions in cl aims 2 and 3 were made and the patent appli cation f iled, legal title automatically flowed to it as the assignee, and the assignorinventor Rubinstein ha d nothing left to assign to Yeda. Id. Itargues that this interpr etation9 Moreover, as this arg ument was not raised below, i t is wai ved. See Pandrol U.S.A. , 320 F.3d at 1366- 67. 06-1218 20 is consistent w ith the prov ision in the Sub-R&D Contract that “no proprietary rights” are vested in the named inventors. Again, this strained interpreta tion assumes incorrectly that IBEP had a n “expecta nt interest” in Rubinstein’s post-project term inventio n. This interpretati on is incons istent with the langu age of the contract and i ntention of the parti es to preclude vesting of

proprietar

y rig hts in the named inventors with respect to Proprietary Information, as defined. 9 To su m up , Rub inst ein wa s a pre sump tive co-owner of the patent because hewas listed as one of four

inventors

on the face of the patent. It is undisputed that after the R&D program ended, Ru binstein , beginning in January 1988, discovered the substant ially purified protei n and the specific amino a cid sequencedescribed in claims 2 and 3 of the ’701 patent. Rubinstein then assigned his ownership rights to Yeda. Rubi nstein was not requi red to assign hi s ownersh ip share to IB EP under the Sub- R&D Contrac t, and Yeda properlybecame a co- owner of the p atent by v irtue of claims2 and 3. Even assuming IBEP has co-ow nership of the patent under the Sub-R&D Co ntract because claim 1 was discover ed in 1987, the dis trict cour t properly

ruled that IBE P has at most a pr o rata undivided ownership interest in the ’701 patent pu rsuant to the Sub-R &D Contract’s assignment

clause. Rubinstein’s assignee, Y eda, also ow ns at least a pr o rata undiv ided ownership interest i n the whole ’701 patent and throughout the two appea ls has made it quite clear that i t wants no p art of the liti gation. Without a complete ownershi p interest or the voluntar

y joinder of Yeda, IBEP lac ks standing to sue for infrin gement.

CONCLUSI ON06-1218 21

The Judgment of the United States District Court for the Central District of California is affirmed. AF FIRMED