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

Heading: Mars, Inc. v. Coin Acceptors, Inc.

Text: On appeal, appellees rely on our decision in Mars, Inc. v. Coin Acceptors, Inc., 527 F.3d 1359 (Fed. Cir. 2008), to contend that, because UMC did not transfer to Keranos legal title to the expired patents, Keranos does not have standing to sue in its own name. Appellees argue that standing for expired and unexpired patents should be analyzed differently, because substantial rights no longer exist once a patent expires. Mars, however, suggests the opposite conclusion—that the same legal analysis applies to both expired and unexpired patents to determine whether an entity has standing to sue for patent infringement. As discussed below, this analysis does not require the holder of all substantial rights in the patent to also hold legal title in the patent to have standing when asserting either expired or unexpired patents. In Mars, we held that an agreement that transferred only “any rights in or to past infringement” in a thenexpired patent did not convey standing on the transferee. 527 F.3d at 1363–64, 1371–72. The transferee had argued that the transfer was “effectively the same as a transfer of title” because “the right to sue for past infringement is the ‘only remaining right[]’ in an expired patent.” Id. at 1372. This Court disagreed: KERANOS, LLC v. SILICON STORAGE TECHNOLOGY, INC. 11 Title to a patent—even an expired patent— includes more than merely the right to recover damages for past infringement. Moreover, the transfer of the right to sue for past infringement divorced from title creates a risk of unnecessary third-party litigation, whether or not the patent has expired. Id. (citing Crown Die & Tool, 261 U.S. at 39). Mars does not, contrary to appellees’ contention, stand for the proposition that only the person who holds legal title to an expired patent has standing to sue for past infringement. Mars’s discussion of “[t]itle to a patent” does not distinguish between expired and unexpired patents. Rather, Mars merely reiterates the established rule that for any patent, expired or not, transferring only the right to sue for past damages, divorced from title, is not enough to give the owner of that right standing under the Patent Act. See Crown Die, 261 U.S. at 44 (“If the owner of the patent when the infringements took place has assigned his patent to one, and his claims for damages for infringement to another, then the latter cannot sue at law at all but must compel his assignor of the claims to sue for him.”). Requiring that legal title in an expired patent be transferred to convey standing on the transferee would create separate standing rules for expired and unexpired patents. In other words, if Keranos had entered into the present exclusive license agreement the day before the patents expired, then it would have standing based on our “all substantial rights” rule, but appellees ask us to rule differently if Keranos acquired the same rights one day later. We see no reason for a party’s standing to turn on whether it enters into an exclusive license with a patent owner before or after the patent expires. We acknowledge that the patentee has fewer rights to transfer when the patent has expired; for example, the 12 KERANOS, LLC v. SILICON STORAGE TECHNOLOGY, INC. patentee can no longer transfer the right to exclude others from practicing the patent going forward. But the absence of some rights in an expired patent does not affect the standing of a transferee that received all substantial rights in an expired patent, just as it does not divest of standing the transferor that did not contract away any substantial rights. The crux of our standing caselaw has always been whether a plaintiff has all substantial rights in the patent-at-issue. Mars asks us to examine whether the licensor intended to transfer all substantial rights or merely a subset of those rights. As discussed above, the title holder, UMC, retained nothing that can be regarded as a substantial right and nothing in the agreement suggests it intended to retain any substantial right. The policy discussed in Mars of avoiding “unnecessary third-party litigation, whether or not the patent has expired” further confirms that Keranos alone has standing because the patent owner, UMC, transferred to Keranos all rights to pursue any infringement litigation. As explained in Crown Die, if a patentee was allowed to divide up the existing patent rights in order to “give[] to many different individuals the right to sue certain named infringers . . . , it would give the patentee an opportunity without expense to himself to stir up litigation by third persons that is certainly contrary to the purpose and spirit of the statutory provisions for the assigning of patents.” 261 U.S. at 39; see Vaupel, 944 F.2d at 875 (“The policy underlying the requirement to join the owner when an exclusive licensee brings suit is to prevent the possibility of two suits on the same patent against a single infringer.” (emphasis added) (citing Crown Die, 261 U.S. at 38)). Our finding that Keranos alone holds all rights to pursue infringement litigation for the patents-at-issue advances this policy concern. In sum, we conclude that Keranos has standing alone to sue for infringement of the asserted patents and decline to create one test for establishing standing when an KERANOS, LLC v. SILICON STORAGE TECHNOLOGY, INC. 13 unexpired patent has been transferred and a second test for establishing standing when an expired patent has been transferred.