Opinion ID: 209871
Heading Depth: 2
Heading Rank: 2

Heading: MEI's Standing (Prior to 1996)

Text: The district court denied as futile Mars's motion to amend its complaint to add MEI as a co-plaintiff for infringement that occurred prior to 1996. Specifically, the district court held that the motion would be futile because MEI lacked standing prior to 1996, when it was neither the owner nor the exclusive licensee of either of the patents-in-suit. Mars appeals, claiming that MEI was an implied and de facto exclusive licensee. Our review is de novo. See Rite-Hite, 56 F.3d 1538, 1551 (The question of standing to sue is a jurisdictional one, which we review de novo.  (citations omitted)). Only a patent owner or an exclusive licensee can have constitutional standing to bring an infringement suit; a non-exclusive licensee does not. Sicom Sys., Ltd. v. Agilent Techs., Inc., 427 F.3d 971, 976 (Fed.Cir.2005) (A nonexclusive license confers no constitutional standing on the licensee to bring suit or even to join a suit with the patentee because a nonexclusive licensee suffers no legal injury from infringement. (internal citations omitted)); Schreiber Foods, 402 F.3d at 1202-03 (It is well-settled that non-exclusive licensees do not have constitutional standing to sue.). This standing deficiency cannot be cured by adding the patent title owner to the suit. Morrow v. Microsoft Corp., 499 F.3d 1332, 1341 (Fed.Cir.2007). It is undisputed that MEI did not own either of the patents-in-suit prior to 1996. The issue is only whether MEI was an exclusive licensee. 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. Rite-Hite, 56 F.3d at 1552. By the same token, if the patentee allows others to practice the patent in the licensee's territory, then the licensee is not an exclusive licensee. In the 1996 Agreements, Mars and MEI agreed that Mars was the owner of the patents-in-suit: [Mars] Incorporated currently owns ... a substantial number of patents and patent applications, which existed at 31 December 1995, relating to Covered Products [defined as currency note acceptors and coin exchange mechanisms and other electronics products] manufactured and sold by MEI-UK (Covered Intellectual Property).... J.A. 4944. In the same document, Mars made clear that MEI-UKa separate corporate entity from either Mars or MEI  previously had and would continue to have a license to practice the patents-in-suit: MEI-UK will continue to have a non-exclusive right to exploit, in the conduct of its business, the Covered Intellectual Property in any country of the world in exchange for a royalty payable to Incorporated.... Id. Thus, prior to 1996, MEI-UK had a license: the right to practice the patents-in-suit in any country of the world (including the United States), in exchange for a royalty payment. MEI cannot have been Mars's exclusive United States licensee, when the terms of the 1996 Agreements make clear that Mars had allowed MEI-UK to practice the patents in the United States. The deposition testimony of Mars's Corporate Tax Director confirmed MEI-UK's rights under its license from Mars. See J.A. 4130 (Q. Were there instances where MEI-U.K. could make a product such as a coin changer and import that product into the United States for delivery to MEI, Inc.? A. That could happen, sure.). MEI was not, therefore, the exclusive licensee to the patents-in-suit in the United States prior to 1996. It consequently lacked constitutional standing. See, e.g., Poly-America, 383 F.3d at 1311 ([The licensee] does not have exclusive rights. It is clearly identified in the license agreement as a non-exclusive licensee, and as such, it received only a `bare license' and has no entitlement under the patent statutes to itself collect lost profits damages for any losses it incurred due to infringement.); Rite-Hite, 56 F.3d at 1553 (Most particularly, the [licensees] had no right under the agreements to exclude anyone from making, using, or selling the claimed invention. The [licensees] could not exclude from their respective territories other [licensees], third parties, or even [the patentee] itself.). Because we find that MEI was not an exclusive licensee as a result of Mars's license to MEI-UK, we need not consider the effect of the other licenses identified by Coinco or the district court. See Mars, 2006 WL 2927239, at -4.