Source: https://patentlaw.jmbm.com/2015/12/district-court-grants-motion-t-5.html
Timestamp: 2019-04-22 12:10:10+00:00

Document:
Plaintiff Max Sound Corporation (“Max Sound”) filed a First Amended Complaint (“FAC”) against three defendants: Google, Inc., YouTube, LLC and On2 Technologies (collectively, “Defendants”), for the infringement of Patent No. 7,974,339 (the “‘339 patent”). As part of the complaint, Max Sound also included the owner of the ‘339 patent, Vedanti Systems Limited (“Vedanti”), as a party to the lawsuit.
The district court explained the following on standing: “The essential issue regarding the right to sue on a patent is who owns the patent.” Aspex Eyewear, Inc. v. Miracle Optics, Inc., 434 F.3d 1336, 1341 (Fed. Cir. 2006). Consequently, the Patent Act requires that “a suit for infringement of patent rights ordinarily be brought by a party holding legal title to the patent.” Propat Int’l Corp. v. Rpost, Inc., 473 F.3d 1187, 1189 (Fed. Cir. 2007) (citing 35 U.S.C. §§ 100, 281). A plaintiff asserting patent infringement “‘must demonstrate that it held enforceable title to the patent at the inception of the lawsuit’ to assert standing.” Abraxis, 625 F.3d at 1364 (quoting Paradise Creations, Inc. v. UV Sales, Inc., 315 F.3d 1304, 1309-310 (Fed. Cir. 2003)). “‘[I]f the original plaintiff lacked Article III initial standing, the suit must be dismissed, and the jurisdictional defect cannot be cured’ after the inception of the lawsuit.” Id. (quoting Schreiber Foods, Inc. v. Beatrice Cheese, Inc., 402 F.3d 1198, 1203 (Fed. Cir. 2005)).
“[A] licensee normally does not have standing to sue without joinder of the patentee.” Aspex, 434 F.3d at 1340. However, the Federal Circuit has held that an “exclusive licensee” has have been transferred to the exclusive licensee. Int’l Gamco, Inc. v. Multimedia Games, Inc., 504 F.3d 1273, 1276 (Fed. Cir. 2007); see Morrow v. Microsoft Corp., 499 F.3d 1332, 1340 (Fed. Cir. 2007) (“When a party holds all rights or all substantial rights [to a patent], it alone has standing to sue for infringement.”); see also Alfred E. Mann Found. for Scientific Research v. Cochlear Corp., 604 F.3d 1354, 1358-59 (Fed. Cir. 2010) (“A patent owner may transfer all substantial rights in the patents-in-suit, in which case the transfer is tantamount to an assignment of those patents to the exclusive licensee, conferring standing to sue solely on the licensee.”). In those circumstances, the licensee becomes the “virtual assignee.” Enzo APA & Son, Inc. v. Geapag A.G., 134 F.3d 1090, 1093 (Fed. Cir. 1998).
“To determine whether an agreement constitutes just an exclusive license or instead also transfers ‘all substantial rights’ in a patent, [the court] must ascertain the intention of the parties and examine the substance of what was granted by the agreement.” Mentor H/S, Inc. v. Med. Device Alliance, Inc., 240 F.3d 1016, 1017 (Fed. Cir. 2001). “The party asserting that it has all substantial rights in the patent ‘must produce . . . written instruments documenting the transfer of proprietary rights.'” Id. (quoting Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245, 1250 (Fed. Cir. 2000)).

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