1

*FOR PUBLICATION 

UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF NEW JERSEY

The Honorable Freda L. Wolfson, U.S.D.J. 

 

 : 

 TRENDX ENTERPRISES, INC. Civil Action No. 11-2512 

 : 

 Plaintiff, 

 : OPINION

 

vs. : 

 

 : 

ALL-LUMINUM PRODUCTS, INC. 

d/b/a RIO BRANDS : 

 Defendant. : 

 

For Plaintiff: 

Gregory S. Chiarello 

Vladeck, Waldman, Elias, & Engelhard, P.C. 

1501 Broadway, Suite 800 

New York, NY 10036 

For Defendant: 

Thomas A. Cunniff 

Fox Rothschild LLP 

Princeton Pike Corporate Center 

997 Lenox Drive, Building 3 

Lawrenceville, NJ 08648-2311 

 

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WOLFSON, United States District Judge:

 Presently before the Court is a motion by Defendant All-luminum Products, Inc., 

doing business as Rio Brands (“Defendant” or “Rio Brands”), for partial judgment on 

the pleadings under Rule 12(c), or alternatively, for partial summary judgment. 

Defendant asks the Court to dismiss Plaintiff Trendx Enterprises, Inc.’s (“Plaintiff” or 

“Trendx”) patent infringement claim (Count I) because Plaintiff failed to join the patent 

owner of the patents-in-suit and Plaintiff by itself lacks sufficient interest in the patents 

to bring this action on its own. Defendant does not attack any of Plaintiff’s seven other 

causes of action. For the reasons that follow, Defendant’s motion is granted and 

Plaintiff’s claim of patent infringement is dismissed without prejudice. 

I. BACKGROUND 

 In addressing Defendant’s Motion to Dismiss, this Court must accept Plaintiff’s 

allegations contained in the Complaint as true. See Toys “R” Us, Inc. v. Step Two, S.A., 

318 F.3d 446, 457 (3d Cir. 2003); Dayhoff, Inc. v. H.J. Heinz Co., 86 F.3d 1287, 1302 

(3d Cir. 1996). Thus, the facts recited below taken from the Complaint do not represent 

this Court’s factual findings. 

Plaintiff alleges that Defendant infringes the following four patents: U.S. Patent 

No. 5,120,016 (the ’016 patent); No. 5,575,234 (the ’234 patent); No. 5,813,163, (the ’163 

patent); and No. 5,941,191 (the ’191 patent) (collectively the “patents-in-suit” or “T-Bar 

patents”). The patents relate to technology that secures poles, umbrellas, rods, or 

similar objects to a structure, such as a deck or dock, without screws, nails, glue, or 

other means that may damage the deck or dock surface. Compl., ¶ 10. Plaintiff Trendx 

manufactures and markets products that utilize the T-Bar patents under the name 

“Deckster.” Id. ¶¶ 9, 11. In particular, Trendx manufactures and sells devices “designed 

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to be a receptacle for various items (i.e. Tiki torches, flag poles, market umbrellas, etc.) 

so they could be securely held to a deck or dock.” Id. ¶ 11. Trendx alleges that Rio 

Brands has marketed and continues to market infringing devices also under the 

“Deckster” name. Id. ¶ 34. 

The question before me is whether Trendx has standing to bring a claim for 

infringement. Trendx admits it does not own the patents at issue. Dysar Products, Inc. 

and Edward Dysarz (collectively “Dysarz”) own the patents.1 Compl., ¶ 7. But Trendx 

maintains it is the exclusive licensee of the T-Bar patents and controls all substantial 

rights in the patents. Id. ¶ 6. 

Dysarz has a history with both Trendx and Rio Brands. Dysarz first licensed the 

T-Bar patents to Trendx through two agreements, one in 1999 and one in 2000, which 

gave Trendx the exclusive right to manufacture, market, or sell products containing the 

patented technology, excluding all marine products. Compl., ¶ 8. Dysarz retained the 

right to its technology as applied to marine products, such as fishing rod holders. Id. 

Trendx paid Dysarz royalties in exchange for its license. Id. Shortly after signing its 

license with Dysarz, Trendx entered into a sublicense agreement with Rio Brands. Id. ¶¶ 

15, 16. Then in September 2005, Dysarz terminated its agreement with Trendx. Id. ¶ 21. 

Because this ended Trendx’s right to sublicense, Rio Brand no longer had rights to the 

patented technology. Id. Less than a year later, in August 2006, Dysarz and Trendx 

renegotiated a licensing agreement, again limited only to nonmarine products. Id. ¶ 23. 

 

1 Trendx alleges that Dysar Products, Inc., owns the patents. Compl., ¶ 7. Rio Brands 

claims that the Patent and Trademark Office records show that Edward Dysarz owns the 

patents. Def. Motion, n.2. Whether Dysar Products, Inc., Edward Dysarz, or both own 

the patents is of no consequence here; it is only material that Trendx admits it does not 

own the patents-in-suit. 

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Although Trendx notified Rio Brands that it had reacquired rights to the patents, they 

did not enter into a new sublicense. Id. ¶ 24. 

In September 2006, Dysarz contacted Rio Brands to discuss past royalties from 

September 2005 through August 2006. Compl., ¶ 28. These conversations continued 

without success and in July 2008, Rio Brands brought a declaratory judgment action 

against Dysarz in the Eastern District of Pennsylvania to declare that its products did 

not infringe the ’016 patent, the ’234 patent, and the ’163 patent. All-luminum Products, 

Inc. v. Dysarz, No. 08-3462, Complaint (E.D. Pa. July 24, 2008). Dysarz then filed a 

patent infringement action in the Eastern District of Texas on the same three patents. 

Dysarz v. All-luminum Products, Inc., No. 08-402, Complaint (E.D. Tex. Oct. 20, 2008). 

In December 2009, Dysarz and Rio Brands settled with regards to the ’016 patent, the 

’234 patent, and the ’163 patent (“Settled Patents”). Compl., ¶ 30. Dysarz released its 

claims against Rio Brands and granted Rio Brands an exclusive license in the ’016 patent 

and a covenant not to sue with regards to the ’234 and the ’163 patents. License and 

Settlement Agreement, Articles II and III, attached as Ex. G to Declaration of Thomas 

Cunniff (“Settlement Agmt”). The ’191 patent was not at issue in those matters. Trendx 

was not a party to either lawsuit or to the settlement. Compl., ¶¶ 29, 30. Trendx claims 

that this settlement has no effect on its patent rights as exclusive licensee of nonmarine 

products incorporating the T-Bar patented technology. 

Two issues arise from these facts: (1) does Trendx’s status as licensee give it 

standing to sue on these patents and (2) what effect, if any, does the settlement between 

Dysarz and Rio Brands have on this action. 

II. LEGAL STANDARD 

a. Motion for Judgment on the Pleadings 

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The standard that a court applies on a motion for judgment on the pleadings 

pursuant to Rule 12(c) is the same standard that a court applies in deciding a motion to 

dismiss pursuant to Rule 12(b)(6). Turbe v. Government of Virgin Islands, 938 F.2d 

427, 428 (3d Cir. 1991); see also Spruill v. Gillis, 372 F.3d 218, 223 n.2 (3d Cir. 2004). 

When reviewing a motion to dismiss, courts “accept all factual allegations as true, 

construe the complaint in the light most favorable to the plaintiff, and determine 

whether, under any reasonable reading of the complaint, the plaintiff may be entitled to 

relief.” Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (internal 

citations and quotations omitted). In Bell Atlantic Corporation v. Twombly, 550 U.S. 

544 (2007), the Supreme Court clarified the 12(b)(6) standard. Specifically, the Court 

“retired” the language contained in Conley v. Gibson, 355 U.S. 41, 45-46 (1957), that “a 

complaint should not be dismissed for failure to state a claim unless it appears beyond 

doubt that the plaintiff can prove no set of facts in support of his claim which would 

entitle him to relief.” Id. at 561 (quoting Conley, 355 U.S. at 45-46). Instead, the factual 

allegations set forth in a complaint “must be enough to raise a right to relief above the 

speculative level.” Id. at 555. As the Third Circuit has stated, “[t]he Supreme Court’s 

Twombly formulation of the pleading standard can be summed up thus: ‘stating . . . a 

claim requires a complaint with enough factual matter (taken as true) to suggest’ the 

required element. This ‘does not impose a probability requirement at the pleading 

stage,’ but instead ‘simply calls for enough facts to raise a reasonable expectation that 

discovery will reveal evidence of the necessary element.” Phillips, 515 F.3d at 234 

(quoting Twombly, 550 U.S. at 556). 

In affirming that Twombly standards apply to all motions to dismiss, the 

Supreme Court recently explained the following principles. “First, the tenet that a court 

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must accept as true all of the allegations contained in a complaint is inapplicable to legal 

conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949 (2009); Fowler v. 

UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). “Second, only a complaint that 

states a plausible claim for relief survives a motion to dismiss.” Ashcroft, 129 S. Ct. at 

1950. The plausibility standard requires that “the plaintiff plead[ ] factual content that 

allows the court to draw the reasonable inference that the defendant is liable for the 

misconduct alleged” and demands “more than a sheer possibility that a defendant has 

acted unlawfully.” Id. at 1949 (quoting Twombly, 550 U.S. at 556). Ultimately, “a 

complaint must do more than allege the plaintiff’s entitlement to relief. A complaint has 

to ‘show’ such an entitlement with its facts.” Fowler, 578 F.3d at 211. In evaluating a 

motion to dismiss, a court may consider only the complaint, exhibits attached to the 

complaint, matters of public record, and undisputedly authentic documents if the 

complainant’s claims are based upon these documents. Pension Benefit Guar. Corp. v. 

White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993). Importantly, “a court may 

consider an undisputedly authentic document that a defendant attaches as an exhibit to 

a motion to dismiss if the plaintiff's claims are based on the document. Otherwise, a 

plaintiff with a legally deficient claim could survive a motion to dismiss simply by failing 

to attach a dispositive document on which it relied.” Id. Accordingly, the Court has 

reviewed the documents that form the basis of Plaintiffs’ Complaint and that were 

attached to the Declaration of Thomas Cunniff in support of Rio Brand’s Motion for 

Judgment on the Pleadings.2 Because I can decide Defendant’s motion based on the 

 

2 Plaintiff argues that any materials beyond its license agreement with Dysarz, including 

the settlement agreement between Dysarz and Rio Brands, is outside the pleadings and 

therefore is beyond what I may rely on in deciding Defendant’s motion for judgment on 

the pleadings. Pl. Opp., at 20. Alternatively, Plaintiff argues that if I treat Defendant’s 

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pleadings and the license agreement between Dysarz and Trendx, which both parties 

agree is appropriate to consider, I need not convert Defendant’s motion for partial 

judgment on the pleadings into a motion for partial summary judgment. 

III. DISCUSSION 

a. Trendx’s Standing to Sue 

My threshold inquiry is whether Trendx may bring its infringement action based 

on patents owned by someone else. Trendx argues it has all essential rights to the 

patents-in-suit; Rio Brands argues that Trendx lacks sufficient standing and must join 

Dysarz. 

The Patent Act allows a “patentee” civil remedies for patent infringement. 35 

U.S.C. § 281. The Act defines “patentee” to include not only the person to whom the 

patent has issued, but successors in title to the patentee and their assignees. 35 U.S.C. § 

100(d). Therefore, a suit for infringement must ordinarily be brought by a party holding 

“legal title” to the patent. See Arachnid, Inc. v. Merit Indus., Inc., 939 F.2d 1574, 1579 

(Fed. Cir. 1991). Were Trendx an assignee of Dysarz’s patent rights, then there is no 

question it would have standing to bring suit on its own. See Vaupel Textilmaschinen 

KG v. Meccanica Euro Italia S.P.A., 944 F.2d 870, 875 (Fed. Cir. 1991). But where, as 

here, the suing party is a licensee – even a purported exclusive licensee – then the 

question becomes whether Trendx can be considered a “virtual assignee.” See Enzo Apa 

 

motion as one for summary judgment, then I should afford Plaintiff an opportunity to 

conduct discovery. Plaintiff does not dispute that Exhibit G attached to Mr. Cunniff’s 

declaration is the true and correct copy of Dysarz’s settlement and license agreement 

with Rio Brands, and both Plaintiff’s Complaint and Plaintiff’s Opposition discuss the 

interactions between Dysarz and Rio Brands, including their settlement, at length. 

Complaint, ¶¶ 24-31; Pl. Opp., at 1-4, 17-20. Therefore, while it appears it would be 

appropriate for me to consider the settlement agreement, my decision today is not based 

on nor informed by any language in or provision of the settlement agreement and I need 

not address the issue. 

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& Son, Inc. v. Geapag A.G., 134 F.3d 1090, 1093 (Fed. Cir. 1998) (“The limited exception 

we have provided conferring standing on licensees is restricted to virtual assignees. As 

such, the licensing arrangement conferring such must, logically, resemble an 

assignment in both form and substance.”); see also Waterman v. Mackenzie, 138 U.S. 

252, 255 (1891). 

Nearly a century ago, the U.S. Supreme Court held that, as a general rule, an 

exclusive licensee must join the patent owner if it seeks to enforce the owner’s patent in 

court: “Any rights of the licensee must be enforced through or in the name of the owner 

of the patent...” Indep. Wireless Tel. Co. v. Radio Corp. of Am., 269 U.S. 459, 467-468 

(1926); see also Prima Tek II, L.L.C. v. A-Roo Co., 222 F.3d 1372, 1377 (Fed. Cir. 2000) 

(“[T]his court continues to adhere to the principle set forth in Independent Wireless that 

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

brought by an exclusive licensee.”). The Federal Circuit has recognized an exception to 

this rule: “where the patentee makes an assignment of all substantial rights under the 

patent, the assignee may be deemed the effective ‘patentee’ under 35 U.S.C. § 281 and 

thus may have standing to maintain an infringement suit in its own name.” Prima Tek

II, 222 F.3d at 1377 (citing Vaupel, 944 F.2d at 875); Speedplay, Inc. v. Bebop, Inc., 211 

F.3d 1245, 1253 (Fed. Cir. 2000) (finding a company had standing because the company 

was, by virtue of two written agreements between the company and the inventor, the “de 

facto” owner of those patents). 

i. A field-of-use licensee must join the patent owner

Whether Trendx has been granted substantial rights under the patent must be 

determined within the context of what rights Dysarz actually granted to Trendx. The 

parties agree that Dysarz did not grant Trendx a complete license to its patents; Dysarz’s 

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license to Trendx was limited to nonmarine products. Compl., ¶ 23; Def. Brief, at 2; Pl. 

Opp., at 2. Dysarz specifically retained its rights for marine products. Section 1.01 of 

the license agreement between Dysarz and Trendx reads: “Subject to the terms of this 

License Agreement, LICENSOR [Dysarz] hereby grants to LICENSEE [Trendx] an 

exclusive license to develop, sell, manufacture and market said Devices that are not 

specifically of a marine nature.” License Agreement, § 1.01, attached as Ex. B to Cunniff 

Declaration (“License Agmt”). The Third Whereas Clause reads, in part: “LICENSEE 

will not, however, use the Devices to manufacture, market, and sell a fishing pole holder, 

boat cleats and stand-offs or any other products that are specifically of a marine nature; 

LICENSOR retains these specific uses....” Id. at 1. In other words, Dysarz divided its 

rights to the patented articles based on the type of product each party would 

manufacture or sell. 

Where a patentee parses its rights based on the “field of use,” the Federal Circuit 

has held, relying on Supreme Court precedent, the patent owner must be joined because 

the licensee does not have substantial rights. In International Gamco, Inc. v. 

Multimedia Games, Inc., 504 F.3d 1273 (Fed. Cir. 2007), the plaintiff, who possessed an 

exclusive license only as to “the lawful operation of lottery games authorized by the New 

York State Lottery in the state of New York,” id. at 1275-76, sued for infringement of a 

patent on a gaming system. The patent owner retained all other rights in the patent, 

including for non-lottery gaming systems. Id. The Federal Circuit held that this was a 

field-of-use license: a license where the patentee granted rights and retained rights 

based on subject matter. Id. at 1278. This was an issue of first impression for the court, 

which found guidance from an earlier Supreme Court opinion: 

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While this court has not considered the ability of an exclusive field of use 

licensee to sue in its own name, the Supreme Court offered guidance in 

Pope Mfg. Co. v. Gormully & Jeffery Mfg. Co., 144 U.S. 248 (1892). The 

Supreme Court held that a plaintiff with exclusive rights limited to a 

particular embodiment of the claimed invention did not have standing to 

sue in his own name. Id. at 252. In Pope, the licensee received all 

substantial rights in the patent “so far as said patent relates to or covers 

the adjustable hammock seat or saddle.” Id. at 249. Claim 2 of the patent 

covered the hammock seat while three other claims set forth combinations 

of which the hammock seat was only one element. Id. at 250. Thus, the 

plaintiff essentially received exclusive rights to only one claim of the 

patent. 

With this setting, the Court’s reasoning focused on the potential for 

multiple litigations against any one defendant and among the licensees 

themselves: 

It was obviously not the intention of the legislature to permit 

several monopolies to be made out of one, and divided 

among different persons within the same limits. Such a 

division would . . . subject a party who, under a mistake as to 

his rights, used the invention without authority, to be 

harassed by a multiplicity of suits instead of one, and to 

successive recoveries of damages by different persons 

holding different portions of the patent-right in the same 

place . . . . [I]t might lead to very great confusion to permit a 

patentee to split up his title within the same territory into as 

many different parts as there are claims. 

Id. at 250-52 (quotations omitted). Thus, the Court observed that even 

exclusive licenses to specific embodiments or claims of a patent 

engendered the threat of multiple suits for any given act of infringement. 

Id. at 1277-78. Persuaded by the Supreme Court’s reasoning, the Federal Circuit held: 

“this court’s prudential standing requirement compels an exclusive licensee with less 

than all substantial rights, such as a field of use licensee, to join the patentee before 

initiating suit.” Id. at 1278-79.3 The Federal Circuit made clear that its holding was not 

 

3 Judge Friedman filed a “dubitante opinion” doubting the court’s holding, but not 

dissenting. In particular, Judge Friedman did not believe that the Supreme Court’s 

holding in Pope mandated that a patent owner must be joined in all cases involving a 

field-of-use license. Judge Friedman reasoned as follows: “No one questions, as the 

Supreme Court recognized in Pope, that a territorially-limited exclusive license 

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limited only to licenses that parsed out rights depending on particular patent claims: 

“The claim-by-claim exclusive license in Pope is indistinguishable from an exclusive 

field of use license insofar as both types of licenses divide the scope of a patent right by 

its subject matter.” Id. at 1278. 

The Federal Circuit recently reaffirmed its holding: “Under long-standing 

prudential standing precedent, an exclusive licensee with less than all substantial rights 

in a patent, such as a field-of-use licensee, lacks standing to sue for infringement 

without joining the patent owner.” A123 Sys. v. Hydro-Quebec, 626 F.3d 1213, 1217 

(Fed. Cir. 2010). In A123, the patentee granted a license to its patents related to lithium 

battery technology for a particular type of rechargeable battery and to sell batteries in 

bulk quantities; the patentee retained the remaining rights. Id. at 1218. Therefore, the 

patentee was a necessary party to the lawsuit. Id. at 1219. Trendx states that these cases 

are factually distinguishable. Pl. Opp., at 11, n.5. But Trendx provides no analysis 

beyond this bald conclusion, other than two parenthetical comments discussing the 

patented technology at issue in International GamCo and A123 Sys. Many patent cases 

will involve significantly different technologies, but I am not convinced why this, by 

 

authorizes the licensee to sue for infringement. The statute governing patent 

assignments, 35 U.S.C. § 261, however, contains parallel sentences that seem to treat 

geographical and field-of-use assignments the same...Under this language, it seems 

unlikely that Congress intended only the latter (geographical), but not the former (‘any 

interest’ in a patent) assignees to be able to sue in their own names.” Int’l Gamco, 504 

F.3d at 1280. Judge Friedman’s point is well taken and I too question whether such a 

blanket rule is appropriate or necessary. Nevertheless, the Federal Circuit’s holding is 

clear. See Eisai Co., Ltd. v. Mutual Pharmaceutical Co., Inc., No. 06-3613, 2007 U.S. 

Dist. LEXIS 93585, at *41 (D.N.J. Dec. 20, 2007) (“[D]ecisions of the Federal Circuit on 

substantive questions of patent law are binding precedent on district courts.”) 

(quotation omitted). Moreover, the facts of this case offer no reason to depart from 

precedent because as I discuss, infra, Dysarz did not grant Plaintiff substantial rights to 

its patents. 

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itself, is any reason to depart from precedent that is on point with a relevant legal issue 

before me. 

 Trendx also argues it was not granted a field-of-use license, but that Dysarz’s 

divvying up of its rights was “rather more akin to a geographic distinction.” Pl. Opp., at 

10. The Patent Act specifically allows for geographically-restricted assignments and the 

Supreme Court has held that exclusive territorial licensees need not join the licensor to 

maintain a suit for patent infringement. Waterman, 138 U.S. at 255. I am not 

persuaded by Trendx’s argument. A geographic license is one where the parties divide 

up patent rights based on the location where those rights may be performed or enforced; 

for example, a licensor might retain the right to exclusively sell a patented product in 

New Jersey, while licensing the right to exclusively sell the product in New York. 

Plaintiff’s argument would mean then that Dysarz retained a right to make, use, and sell 

patented products at sea, while it granted Plaintiff an exclusive license to make, use, and 

sell patented products on land. That plainly is not what the parties intended. Dysarz 

retained its patent rights as to marine products (which it could exercise anywhere) and 

granted Plaintiff a license to develop, sell, manufacture, and market non-marine 

products, which Plaintiff could exercise anywhere. Indeed, section 1.02 grants Trendx a 

worldwide scope to its licensed rights as Trendx itself recognizes. License Agmt, § 1.02; 

Pl. Opp., at 9 (“[Trendx’s] exclusive license is without geographic restriction...”). This 

section would have no effect if I were to interpret this agreement as a geographic license. 

Further, the parties discuss their rights based on the type of product to be manufactured 

or sold, not where the right will be enforced. For example, the Third Whereas Clause 

reads, in part: “LICENSEE will not, however, use the Devices to manufacture, market, 

and sell a fishing pole holder, boat cleats and stand-offs that are specifically of a marine 

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nature.” License Agmt, at 1. And later, it discusses the products that are “the subject of 

this agreement” and gives examples: torch holders, pole holders, and umbrella holders. 

Id. § 1.03. 

Trendx also cites Aspex Eyewear, Inc. v. Miracle Optics, Inc., 434 F.3d 1336 (Fed. 

Cir. 2006), in support of its argument that it does have substantial rights. This citation 

is somewhat baffling as it is a case holding that a licensee, who held even more rights 

than Trendx, did not have substantial rights. There the Federal Circuit held that even 

though the patent owner had licensed: “(1) the exclusive right to make, use, and sell 

products covered by the patent; (2) the right to sue for infringement of the patent; and 

(3) a virtually unrestricted authority to sublicense its rights under the agreement” it still 

had not transferred all substantial rights and therefore it could bring suit in its own 

name because the license term was only for a limited period of time. Id. at 1342. 

Instead of assigning its rights by time, Dysarz did so by subject matter, and thus it 

remained owner of its patents for the same reasons as were articulated in Aspex 

Eyewear. Id. at 1343. Trendx additionally cites to Ciba-Geigy Corp. v. Alza Corp. and 

Surgical Laser Technologies v. Laser Industries, to argue that Dysarz’s limited retention 

of rights as to marine products does not undermine Trendx’s unrestricted use of the 

patents. But in Ciba-Geigy, the patent owner retained rights only to the extent it 

triggered a contract clause subject to a condition subsequent, which it never did. CibaGeigy Corp. v. Alza Corp., 804 F. Supp. 614, 631 (D.N.J. 1992). And in Surgical Laser, 

the patent owner retained the rights only for a limited educational, non-commercial 

purpose. Surgical Laser Technologies v. Laser Industries, No. 91-3068, 1991 U.S. Dist. 

LEXIS 17191, at *7-9 (E.D. Pa Nov. 27, 1992). Neither factual situation applies here as 

Dysarz always maintained a significant commercial interest in its patents. Furthermore, 

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I find that the types of license agreements at issue in Int’l GamCo and A123 Sys are more 

factually apposite to the agreement between Dysarz and Trendx. 

ii. Trendx does not have substantial rights to the patents

Nevertheless, even if Trendx were correct and the license at issue is not a field-ofuse license, Trendx still does not have all substantial rights to the patents and therefore 

cannot enforce the patents solely in its name. To determine whether a license 

agreement has conveyed all substantial rights in a patent, a court must ascertain the 

intention of the parties and examine the substance of what was granted. Prima Tek II, 

222 F.3d at 1378. In making this assessment, it is necessary to determine both what 

rights were granted and what rights were retained. Id. 

A patent is a sanctioned monopoly and the essence of a patentee’s right is to 

exclude others from making, using, or selling what is claimed. Vaupel, 944 F.2d at 875. 

If the patent owner licenses this right of exclusion, in full, to another, then that party 

may sue without joining the owner. See Prima Tek II, 222 F.3d at 1379-80 (“In 

evaluating whether a particular license agreement transfers all substantial rights in a 

patent to the licensee, we pay particular attention to whether the agreement conveys in 

full the right to exclude others from making, using and selling the patented invention in 

the exclusive territory.”); Rite-Hite Corp. v. Kelley Co., Inc., 56 F.3d 1538, 1552 (Fed. 

Cir. 1995) (“To be an exclusive licensee for standing purposes, a party must have 

received, not only the right to practice the invention within a given territory, but also the 

patentee’s express or implied promise that others shall be excluded from practicing the 

invention within that territory as well.”). Otherwise, the exclusive licensee must join the 

patent owner. Textile Productions, Inc. v. Mead Corp., 134 F.3d 1481, 1483-84 (Fed. Cir. 

1998) (“Thus, although a patentee has standing to sue in its own name, an exclusive 

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licensee that does not have all substantial rights has standing to sue third parties only as 

a co-plaintiff with the patentee.”).4 

Notably absent from Trendx’s rights, even in its purportedly exclusive sphere of 

nonmarine products, is the ability to exclude others from practicing the patent. 

Whether a patentee has conveyed an exclusive right to sue is “particularly dispositive” in 

determining if all substantial rights have been licensed to the patentee. Abbott Labs. v. 

Diamedix Corp., 47 F.3d 1128, 1132 (Fed. Cir. 1995) (analyzing case law and finding the 

question of whether the “exclusive right to sue for infringement” is “particularly 

dispositive” of whether a party had obtained substantial rights). The license does not 

explicitly grant Trendx an outright right to sue. Rather, it provides: “If there is any 

claimed or apparent infringement of the patented Devices by any third party, whether 

discovery of said claimed or apparent infringement is by LICENSEE or LICENSOR, both 

parties agree they shall notify the other in writing within 15 days of receiving such 

information at which time LICENSOR and LICENSEE agree to jointly discuss, assess 

and determine an agreeable coarse [sic] of action that complies with the spirit and 

intention of this License Agreement.” License Agmt, § 5.03. Contrary to Plaintiff’s 

argument, this language does not convey an exclusive right to sue. All it requires is that 

 

4 There is an exception to this, recognized long ago, that grants an exclusive licensee the 

right to sue the patentee without joining the patentee as a plaintiff: “In equity, as at law, 

when the transfer amounts to a license only, the title remains in the owner of the patent; 

and suit must be brought in his name, and never in the name of the licensee alone, 

unless that is necessary to prevent an absolute failure of justice, as where the patentee is 

the infringer, and cannot sue himself.” Waterman, 138 U.S. at 255 (1891). Plaintiff cites 

two District of New Jersey opinions that stand for this proposition and argue that 

because it has the power to sue Dysarz it has substantial rights. Pl. Opp., at 7 (citing 

Novartis Pharms Corp. v. Teva Pharms. USA, Inc., No. 05-1887, 2009 WL 3447232 

(D.N.J. Oct. 4, 2009); Sanofi, S.A. v. Med-Tech Veterinarian Products, Inc., 565 F. Supp. 

931 (D.N.J. 1983)). But of course Trendx is not trying to sue Dysarz. If it were, a 

different result might be warranted. And that result would have no bearing on whether 

Trendx has the exclusive right to sue third parties. 

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the parties discuss any possible or pending infringement actions. Dysarz retains its 

right to sue unless the agreement provides otherwise. See Textile Prod., 134 F.3d at 

1485 (finding that patentee retained right to license to third parties when agreement 

was silent on the subject). 

Moreover, I must consider not only whether Trendx had the power to sue, but 

also whether the agreement “divests the licensor of that same right.” See Delano Farms 

Co. v. Cal. Table Grape Comm’n, 655 F.3d 1337, 1342 (Fed. Cir. 2011). Even if Dysarz 

envisioned Trendx being able to initiate a lawsuit, the agreement does not preclude 

Dysarz from doing the same. See IpVenture, Inc. v. ProStar Computer, Inc., 503 F.3d 

1324, 1325 (Fed. Cir. 2007) (“Thus all entities with an independent right to enforce the 

patent are indispensable or necessary parties to an infringement suit.”). Dysarz’s 

independent power to bring suit is evidenced by its lawsuit against Rio Brands in 2008. 

Even in the face of Dysarz’s independent enforcement actions, Trendx does not allege or 

argue that Dysarz breached its license agreement. In fact, Trendx points to Dysarz’s 

statements that the license agreement was “still in full force” even in light of Dysarz’s 

lawsuit. Compl., ¶ 31. Thus, Dysarz’s continuing right to enforce its patents accords 

with Dysarz and Trendx’s agreement. 

Trendx also argues that because it had an exclusive right to sublicense the 

patents-in-suit, it could nullify any attempt by Dysarz to sue an alleged infringer by 

sublicening that party, thereby rendering any retained right-to-sue by Dysarz illusory. 

Trendx relies on the Federal Circuit’s language in Speedplay, Inc. for support. There the 

court said that the patentees’ “right to sue an infringer if Speedplay does not is illusory, 

because Speedplay can render that right nugatory by granting the alleged infringer a 

royalty-free sublicense.” Speedplay, Inc., 211 F.3d at 1251. But the court’s discussion 

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was in the context of a license agreement that explicitly granted Speedplay the sole right

to enforce the patents. Id. And the patentees’ retained right to sue was triggered if 

Speedplay failed to take action for three months; only then could the patentees sue in 

their own name. Id. Here Trendx does not have the sole right to enforce the patents 

and the license agreement appears to forestall any situation where Trendx could render 

Dysarz’s right illusory because it requires the parties to discuss any infringement action 

beforehand. See License Agmt, § 5.03. Nor am I convinced that Trendx actually has an 

exclusive unfettered right to sublicense the patents, as did Speedplay. The Trendx 

agreement only provides: “Whereas LICENSEE may desire to sublicense others...to 

maximize the patents potential and/or compliment [sic] its existing product line that are 

not specifically of a marine nature, LICENSEE agrees to supply LICENSOR with a letter 

that states the material elements of any executed agreement with a SUBLICENSEE...” 

License Agmt, § 1.03. And in the subsequent section, the parties agree that Dysarz will 

not contact any party that Trendx is in negotiations with as this is best to “obtain the 

best prices and highest royalties.” Id. § 1.04. This suggests that Dysarz was free to enter 

into negotiations with any company not negotiating with Trendx and also that it 

retained a right to sublicense its patents. This language also suggests that the parties 

were not contemplating royalty-free sublicenses, another significant distinction from the 

facts presented in Speedplay, Inc. Similarly, Trendx relies on Ciba-Geigy Corp., but 

there too, the court found the licensor had granted the licensee “the sole right” to 

enforce the patent at issue. Ciba-Geigy Corp., 804 F. Supp. at 631 (“[T]his agreement 

granted the licensee the sole right to sue for past present and future infringement.”) 

(emphasis added). Such a clear granting of an exclusive right is lacking in Trendx’s 

agreement with Dysarz. 

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Nor does the fact Dysarz and Trendx labeled their agreement as an “exclusive 

license” actually give Trendx exclusive rights to the patent. “Whether a transfer of a 

particular right or interest under a patent is an assignment or a license does not depend 

upon the name by which it calls itself, but upon the legal effect of its provisions.” 

Waterman, 138 U.S. at 256; Vaupel, 944 F.2d at 875 (“[T]he use of the term ‘exclusive 

license’ in the [transfer agreements] is not dispositive; what the documents in fact recite 

is dispositive.”). Here the legal effect of the license was not to give Trendx an exclusive 

right to exclude others from making, using, or selling the patented technology. Rather, 

it was a grant from Dysarz to Trendx of the right to develop, sell, manufacture, and 

market the patented technology as related to nonmarine products only, at most a shared 

right to enforce the patents with Dysarz, and a circumscribed right to sublicense. These 

rights cannot be said to be substantial and do not transform Trendx into either a virtual 

assignee or the de facto owner of the patents-in-suit. Therefore, Dysarz must be joined 

as a party if Trendx is to maintain its claim of patent infringement. 

b. Dismissal of Trendx’s Patent Claims 

Trendx argues that if I find that Dysarz is a necessary party, then Trendx should 

be granted leave to amend rather than having Count I dismissed. Pl. Opp., at 15. Rio 

Brands disagrees. Def. Reply, at 7. Other courts that have addressed this issue have 

found themselves compelled to dismiss the claims because the Federal Circuit has said 

that it is necessary to join the patentee before initiating the lawsuit: 

Significantly, in Int’l Gamco, the federal circuit reversed the district court’s 

denial of the defendant's motion to dismiss. It held that the motion to 

dismiss should be granted since the plaintiff, a holder of only an exclusive, 

field of use license with a geographical limitation, lacked standing to sue 

on its own. Rather, joinder of the patent owner prior to institution of the 

action was mandated. 

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Road Sci., L.L.C. v. Cont’l Western Transp. Co., No. 09-2023, 2009 U.S. Dist. LEXIS 

122262, at *13-14 (E.D. Cal. Dec. 14, 2009); see also Univ. of Pittsburgh v. Varian Med. 

Sys., No. 07-0491, 2008 U.S. Dist. LEXIS 36098, at *7-8 (W.D. Pa. Apr. 30, 2008) 

(analyzing the same language and dismissing Plaintiff’s action because it did not join a 

necessary party before initiating its action), vacated on other grounds by 569 F.3d 1328, 

1334 (Fed. Cir. 2009).5 I need not decide whether or not International Gamco demands 

that I dismiss or not. It is within my discretion to either dismiss or allow an amendment 

to substitute parties. Ricci v. State Bd. of Law Examiners, 569 F.2d 782, 784 (3d Cir. 

1978). Nevertheless, “when a complaint is vulnerable to dismissal on the pleadings, a 

district court must permit a curative amendment, unless an amendment would be 

inequitable or futile.” Andela v. Am. Ass'n for Cancer Research, 389 Fed. Appx. 137 (3d 

Cir. 2010), citing Phillips v. Cty. of Allegheny, 515 F.3d 224, 236 (3d Cir. 2008). 

Therefore, Count I of Plaintiff’s Complaint is DISMISSED WITHOUT PREJUDICE; 

Trendx may cure its lack of standing by making a motion to amend to add Dysarz as a 

party.6 

 

5 The Federal Circuit vacated the district court’s decision because its dismissal was with 

prejudice, but it left undisturbed the determination that dismissal was appropriate for 

failure to join the patent holder. 

6 Because I am dismissing Trendx’s patent claim, I need not decide what effect, if any, 

Dysarz’s settlement agreement with Rio Brands has on Trendx’s ability to sue on the 

Settled Patents. Nevertheless, I briefly comment on this issue to provide some guidance 

to the parties should Trendx choose to refile its patent claim. I am skeptical that Trendx 

would be allowed to maintain an action against Rio Brands on patents for which Rio 

Brands has already litigated and paid money in settlement to Dysarz. The paramount 

concern underlying the Supreme Court’s holding in Independent Wireless was to 

alleviate the threat of an alleged infringer being subjected to duplicative lawsuits: “The 

presence of the owner of the patent as a party is indispensable not only to give 

jurisdiction under the patent laws but also, in most cases, to enable the alleged infringer 

to respond in one action to all claims of infringement for his act, and thus either to 

defeat all claims in the one action, or by satisfying one adverse decree to bar all 

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IV. CONCLUSION 

For the foregoing reasons, Defendants’ Motion to Dismiss is GRANTED. An 

order will be entered consistent with this Opinion. 

Dated: April 18, 2012 /s/ Freda L. Wolfson 

 Honorable Freda L. Wolfson 

 United States District Judge 

 

subsequent actions.” Independent Wireless, 269 U.S. at 468 (emphasis added). 

Plaintiff argues that such a concern is illusory here because Dysarz’s rights have already 

been adjudicated and therefore Dysarz will not again sue Rio Brands. But it is not the 

specter of a hypothetical, future lawsuit by Dysarz that is cause for concern – it is 

Trendx’s current action that makes the threat of duplicative litigation manifest. To 

allow Trendx the opportunity to relitigate the same patents seems to run afoul of the 

Supreme Court’s and the Federal Circuit’s prudential standing concerns. 

Moreover, beyond these equitable concerns, Rio Brands appears to have an afteracquired license to the ’016 patent. The Patent Act states: “An assignment, grant or 

conveyance shall be void as against any subsequent purchaser or mortgagee for a 

valuable consideration, without notice, unless it is recorded in the Patent and 

Trademark Office within three months from its date or prior to the date of such 

subsequent purchase or mortgage.” 35 U.S.C. § 261; Heidelberg Harris, Inc. v. Loebach, 

145 F.3d 1454, 1456 (Fed. Cir. 1998) (“[The defendant was] a bona fide purchaser of a 

license under the asserted patent and therefore is not subject to suit for infringement of 

the patent.”). And while Dysarz did not license the two other Settled Patents, (the’234 

patent and the ’163 patent) – instead covenanting not to sue Rio Brands on those 

patents – some courts have found privity between a patent holder and a licensee when 

the patent holder has already sued on licensed patents, thereby binding the licensee to 

the patent holder’s lawsuit. Erbamont, Inc. v. Cetus Corp., 720 F. Supp. 387, 394-395 

(D. Del. 1989) (“There is a strong possibility that both the Erbamont-Farmitalia and 

Erbamont-Erbamont N.V. relationships fall within this definition because both 

Farmitalia, by its license agreement, and Erbamont N.V., by its representations to 

defendants, claim a concurrent interest in the ’124 patent.”); Arcade, Inc. v. 3M, No. 96-

0359, 1997 U.S. Dist. LEXIS 21687, at *22 (E.D. Tenn. June 10, 1997) (“BBCo is in 

privity with Arcade by virtue of their exclusive licensing agreement.”); see also Gardiner 

v. Virgin Islands Water & Power Authority, 145 F.3d 635, 642 (3d Cir. 1998) (“[P]arties 

in privity are bound by rulings made in their absence”). In other words, Trendx might 

be considered a virtual party should Rio Brands raise an issue of res judicata. But as 

Trendx correctly notes, the settlement between Dysarz and Rio Brands did not involve 

the ’191 patent, so these concerns would have no bearing should Trendx join Dysarz and 

bring an action for infringement based on that patent alone. 

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