Opinion ID: 2827015
Heading Depth: 3
Heading Rank: 2

Heading: All Substantial Rights

Text: After “ascertain[ing] the intention of the parties [to the license agreement] and examin[ing] the substance of what was granted,” Vaupel, 944 F.2d at 874, we conclude that the exclusive license agreement between UMC and Keranos assigned all substantial rights under the patent to Keranos, without retaining any substantial rights in UMC, such that Keranos alone has standing to sue. First, UMC transferred to Keranos the exclusive past, present, and future rights to sue and recover for infringement, to make, use, import, and sell products covered by the patents, and to negotiate and grant sublicenses. 2 The transfer of these rights strongly weighs in favor of finding Keranos alone has standing. See Aspex, 434 F.3d at 1342 (Transfer of “(1) the exclusive right to 2 Because the patents had expired, when UMC and Keranos entered into their exclusive license, UMC had no present or future rights to sue and recover for infringement, to exclude others from making, using, importing, or selling products covered by the patents, or to negotiate and grant sublicenses. See Kimble v. Marvel Entm’t, LLC, 576 U.S. __, 135 S. Ct. 2401, 2407 (2015). But this provision in the exclusive license further underscores UMC’s intention to transfer these rights and shows it intended to transfer to Keranos all substantial rights in the patentsat-issue. KERANOS, LLC v. SILICON STORAGE TECHNOLOGY, INC. 9 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 . . . strongly favor[s] a finding of an assignment, not a license.”); Alfred E. Mann Found. for Scientific Research v. Cochlear Corp., 640 F.3d 1354, 1361 (Fed. Cir. 2010) (“Frequently, though, the nature and scope of the exclusive licensee’s purported right to bring suit, together with the nature and scope of any right to sue purportedly retained by the licensor, is the most important consideration.”). Importantly, UMC did not retain the right to sue accused infringers, which “is the most important factor in determining whether an exclusive license transfers sufficient rights to render the licensee the owner of the patent.” Mann, 640 F.3d at 1361. Instead, the agreement expressly prohibits UMC from instituting or participating in any law suit related to the patent, or from negotiating or granting further licenses to the patents, absent written authorization from Keranos. Second, in a confidential provision, UMC transferred to Keranos an exclusive right that gave Keranos a proprietary interest in the patents. Cf. Ortho Pharm. Corp. v. Genetics Inst., Inc., 52 F.3d 1026, 1034 (Fed. Cir. 1995) (“A patentee may not give a right to sue to a party who has no proprietary interest in the patent.” (citations omitted)); Propat Int’l Corp. v. RPost, Inc., 473 F.3d 1187, 1191 (Fed. Cir. 2007) (“The responsibility to maintain a patent is one of the obligations that has been recognized by this court as an indication that the party with that obligation has retained an ownership interest in the patent.”) (citation omitted). Finally, the agreement as a whole indicates that UMC intended to transfer all substantial rights to Keranos. See Vaupel, 944 F.2d at 874. The agreement includes a catchall grant of “any and all other substantial rights . . . 10 KERANOS, LLC v. SILICON STORAGE TECHNOLOGY, INC. necessary and sufficient under any applicable law or precedent to confer standing and permit [Keranos] to initiate any actions on its own.” The agreement, in a confidential provision, also placed a certain burden on UMC to ensure Keranos did not lack standing. In sum, UMC transferred to Keranos all substantial rights remaining in the patents and retained no substantial rights for itself. Appellees concede that UMC possessed no other substantial rights to transfer to Keranos. Oral Arg. 26:43–27:55, available at http://www. cafc.uscourts.gov/oral-argument-recordings/2014-1360/all.