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Federal Circuit Affirms Dismissal Where Co-Owner of Patent Refuses to Join Suit

The Federal Circuit recently denied en banc review of its prior decision dismissing a patent infringement suit where a co-owner of the patent-in-suit refused to join the case voluntarily and the court held that it could not force the co-owner to join the suit involuntarily.  See STC.UNM v. Intel Corp., No. 2013-1241 en banc denied, No. 2013-1241.

The patent at issue involved lithographic patterning techniques for use in the manufacture of semiconductor devices.  In granting the defendant’s motion for summary judgment, the district court held that the patent was unenforceable for most of its existence for failure to comply with a terminal disclaimer, and the court dismissed the remainder of the case for lack of standing because the plaintiff did not join the patent’s current co-owner. The Federal Circuit affirmed the district court’s decision, rejecting the plaintiff’s argument that it was entitled to join the co-owner against its will under Rule 19(a) of the Federal Rules of Civil Procedure.  In a 6-4 decision, the Federal Circuit refused to conduct an en banc review of its prior decision.

In reaching its decision, the Federal Circuit applied the well-settled rule that in order to establish standing in an infringement suit, a patent co-owner must join all other co-owners in the suit.  The Court recognized two exceptions to this rule: (1) where the patent owner has granted an exclusive license and refuses to join a suit brought by its licensee; and (2) where a co-owner agrees to waive his right to refuse to join suit, his co-owners may subsequently force him to join in a suit against infringers. But the Court found that neither exception applied in this case.

In her dissent from the panel’s decision, Judge Newman argued that the co-owner was a necessary party to the suit and must be joined as a matter of procedural law under Rule 19(a). But the majority held “that 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).”

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Matthew C. Hurley

Member / Chair, Intellectual Property Litigation Practice

Matt is a Boston-based litigator who represents primarily life sciences and technology companies in complex business disputes. He is particularly known for representing clients in domestic and international arbitrations involving collaboration agreements, patent licenses, supplier agreements, and distribution contracts.