Opinion ID: 208576
Heading Depth: 2
Heading Rank: 2

Heading: Joinder of the Patent's Co-Owner

Text: As this court has explained, if a co-owner of a patent wishes to sue for infringement, he must join the other co-owners in the action in order to avoid a dismissal for lack of standing. Isr. Bio-Eng'g Project v. Amgen Inc., 475 F.3d 1256, 1264-65 (Fed.Cir.2007). In the present case, the district court dismissed the action based on its determination that Pitt lacks standing because it failed to join a co-owner of the '554 and '431 patents, Carnegie Mellon, at the inception of its lawsuit. Thus, the district court's action may be considered a dismissal for failure to join a necessary party under Federal Rule of Civil Procedure 19(b) or, more generally, a dismissal for lack of standing. We consider each possible rationale in turn. Federal Rule of Civil Procedure 12(b)(7) allows a district court to dismiss an action for failure to join a party under Rule 19. However, it is clear that a dismissal for failure to join a party is not an adjudication on the merits, and thus, should not have preclusive effect  i.e. such a dismissal should be without prejudice. See Hughes v. United States, 71 U.S. (4 Wall.) 232, 237, 18 L.Ed. 303 (1866) (If the first suit was dismissed for defect of pleadings, or parties, ... the judgment rendered will prove no bar to another suit.); Gilman v. Rives, 35 U.S. (10 Pet.) 298, 301-02, 9 L.Ed. 432 (1836) ([A] judgment that a declaration is bad in substance [i.e. as here for failure to join necessary parties] ... can never be pleaded as a bar to a good declaration for the same cause of action. The judgment is in no just sense a judgment upon the merits.); see also 18A Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 4438 (2d ed.1987). For these reasons, if the district court concluded that Pitt failed to join a co-owner of the patents in suit, then it had discretion to dismiss the action, but it lacked discretion to do so with prejudice. The district court should have dismissed the action without prejudice, which would allow Pitt to file a second action with the standing defect cured through the joinder of the proper parties or an assignment of the necessary patent rights. Even if we ignore the party joinder issue and view the district court's action as a simple dismissal for lack of standing, we still conclude that the district court abused its discretion. A dismissal for lack of standing is jurisdictional and is not an adjudication on the merits. Media Techs. Licensing, LLC v. Upper Deck Co., 334 F.3d 1366, 1370 (Fed.Cir.2003) (Because standing is jurisdictional, lack of standing precludes a ruling on the merits.). The Third Circuit and this court, as well as other regional circuit courts, have repeatedly emphasized that a dismissal for lack of standing should generally be without prejudice, particularly when the defect is curable. See, e.g., Pa. Prison Soc'y v. Cortes, 508 F.3d 156, 158 (3d Cir.2007) (We now hold that the District Court may not have had jurisdiction to decide the merits of the complaint. Accordingly, we... remand with directions to conduct further proceedings, as necessary, to determine whether any of the plaintiffs has standing and if not, to dismiss the complaint without prejudice.); Fieldturf, Inc. v. Sw. Recreational Indus., 357 F.3d 1266, 1269 (Fed.Cir.2004) (Ordinarily, dismissal for lack of standing is without prejudice. On occasion, however, a dismissal with prejudice is appropriate, especially where it is plainly unlikely that the plaintiff will be able to cure the standing problem. (internal citation and quotation marks omitted)); H.R. Techs., 275 F.3d at 1384 (Because lack of standing is not an issue that goes to the merits of the underlying patent issues, a dismissal of a complaint for lack of standing would not normally be expected to be made with prejudice.); Korvettes, Inc. v. Brous, 617 F.2d 1021, 1024 (3d Cir.1980) (A dismissal for lack of jurisdiction is plainly not a determination of the merits of a claim. Ordinarily, such a dismissal is `without prejudice.'); see also Stalley ex rel. United States v. Orlando Reg'l Healthcare Sys., Inc., 524 F.3d 1229, 1234-35 (11th Cir.2008) (explaining that a dismissal for lack of standing is necessarily without prejudice because the court lacked subject matter jurisdiction and thus could not reach the merits of the claim); Fleck & Assocs. v. City of Phoenix, 471 F.3d 1100, 1106-07 (9th Cir.2006) (same); Brereton v. Bountiful City Corp., 434 F.3d 1213, 1216-19 (10th Cir.2006) (same and collecting cases); Kasap v. Folger Nolan Fleming & Douglas, Inc., 166 F.3d 1243, 1248 (D.C.Cir.1999) (modifying a dismissal to be without prejudice because dismissals for lack of jurisdiction are not decisions on the merits and therefore have no res judicata effect on subsequent attempts to bring suit in a court of competent jurisdiction). Thus, the law universally disfavors dismissing an action with prejudice based on lack of standing, and there is a strong presumption that such a dismissal is improper. Nonetheless, Varian argues that we should affirm the with prejudice nature of the district court's dismissal because we have twice affirmed such a dismissal with prejudice. We disagree; the cases cited by Varian do not support dismissal with prejudice in this case. In Sicom, we affirmed the district court's dismissal with prejudice because the action at issue was Sicom's second suit that was dismissed for lack of standing and because Sicom already had a chance to cure the defect and failed. Sicom Sys., Ltd. v. Agilent Techs., Inc., 427 F.3d 971, 980 (Fed.Cir.2005) (also noting that dismissal with prejudice is generally inappropriate where the standing defect can be cured). The present case is distinguishable in at least three ways: Pitt did not file a previous action that was dismissed for lack of standing; Pitt's motion attempting to cure the defect by joining Carnegie Mellon was denied; and Pitt's alleged standing defect can be cured. Our decision in Textile Productions likewise does not support Varian's position because, in that case, it was unlikely that the standing defect could be cured. See Textile Prods., Inc. v. Mead Corp., 134 F.3d 1481, 1484-85 (Fed.Cir. 1998); see also H.R. Techs., 275 F.3d at 1385 (noting that the parties did not contest the with prejudice nature of the dismissal in Textile Productions, most likely because it was plainly unlikely that the plaintiff would have been able to cure the standing problem and additionally noting that this court has cited Textile Productions for the proposition that a dismissal for lack of standing would ordinarily be without prejudice). Thus, our decisions in Sicom and Textile Productions are entirely consistent with this court's repeated statements that a dismissal for lack of standing should generally be without prejudice so as to permit the filing of a new action by a party with proper standing. In this case, we can discern no facts that merit deviation from that general rule, and we hold that the district court abused its discretion.