Docket Nos. 2013-1241
NEWMAN, RADER, DYK
June 6, 2014
Brief Summary: STC could not involuntarily join Sandi to its suit against Intel because “the right of a patent co-owner to impede an infringement suit brought by another co-owner is a substantive right that trumps the procedural rule for involuntary joinder under Rule 19(a).”
Summary: STC appealed DC finding it lacked standing to sue Intel for infringement of US 6,042,998 because co-owner Sandia Corp. had not voluntarily joined and could not be involuntarily joined (Ethicon, FC 1998 (“all co-owners must ordinarily consent to join as plaintiffs in an infringement suit)). The ‘998 patent incorporated US 5,705,321 by reference (but did not claim priority to it) which named four inventors, one of which was an employee of Sandia. The assignment of the ‘321 patent defined all assignors as “employees of the University of New Mexico” which was named as assignee. UNM later assigned those rights to Sandia. The Sandia ‘321 inventor was not named as an inventor on the ‘998 patent but two other inventors were shared between the patents. The ‘998 patent was rejected for double patenting over the ‘321 patent and UNM filed a terminal disclaimer (TD) which stated that “any patent granted on this instant application shall be enforceable only for and during such period” that the ‘998 and ‘321 patents “are commonly owned” and stated it was “the owner of record of a 100 percent interest in the instant application.” UNM then assigned its interest in the ‘321 and ‘998 patents to STC as a wholly-owned licensing arm of UNM. STC (as the “sole ‘owner of record’”) then corrected the ‘998 inventorship to add to more UNM inventors and corrected the priority claim to identify it as a CIP of the ‘321 patent. STC then sued Intel for infringement of the ‘998 patent. Sandia never claimed any ownership interest in the ‘998 patent and denied ownership during discovery. Intel asserted that STC could not enforce the ‘998 patent under the TD, which required identical ownership of the patents. STC then “assign[ed] an undivided interest in each of” the ‘321 and ‘998 patents to Sandia. STC argued that Sandia should have been involuntarily joined under Federal Rule 19(a). The opinion explained, however, “the right of a patent co-owner to impede an infringement suit brought by another co-owner is a substantive right that trumps the procedural rule for involuntary joinder under Rule 19(a).” It also described the two recognized exceptions to this rule: 1) an exclusive licensee can be joined to a licensee’s suit; and, 2) a co-owner waives his right to join suit. The FC panel concluded neither of these exceptions applied to this case. Thus, the DC decision was affirmed. The panel explained that this is proper because it “safeguards against the possibility that each co-owner would subject an accused infringer to a different infringer to a different infringement suit on the same patent.” Judge Newman’s dissent argued that this decision was incorrect because a party that declines to join a legal action for which it is necessary may be joined involuntarily under Rule 19.