Patent Case Summaries June 4, 2019

Patent Case Summaries | Week Ending May 31, 2019

A weekly summary of the precedential patent-related opinions issued by the Court of Appeals for the Federal Circuit and the opinions designated precedential or informative by the Patent Trial and Appeal Board.

Lone Star Silicon Innovations LLC v. Nanya Technology Corp., et al., Nos. 2018-1581, -1582 (Fed. Cir. (N.D. Cal.) May 30, 2019). Opinion by O’Malley, joined by Reyna and Chen.

The Federal Circuit vacated and remanded the district court’s dismissal of Lone Star’s infringement actions.

The patents at issue were originally assigned to AMD, which later entered into an agreement purporting to transfer to Lone Star “all right, title and interest” in the patents. The transfer agreement, however, imposed several limits on Lone Star. The district court examined the rights transferred to Lone Star and those retained by AMD, and concluded that AMD did not transfer “all substantial rights” to Lone Star, thus preventing Lone Star from being able to sue in its own name. The district court therefore dismissed the case.

On appeal, the Federal Circuit explained that although the transfer agreement purported to convey “all right, title and interest,” the remaining terms curtailed Lone Star’s rights such that it did not have all substantial rights in the patents. The Federal Circuit explained that the “inquiry depends on the substance of what was granted rather than formalities or magic words.” Accordingly, the Federal Circuit agreed that Lone Star could not sue in its own name. The court ruled, however, that the district court erred by failing to consider whether AMD could be joined as a necessary party under Federal Rule of Civil Procedure 19. The Federal Circuit remanded for that determination.

The Federal Circuit also addressed whether Lone Star lacked Article III standing to bring suit. The district court had concluded that Lone Star lacked standing. The Federal Circuit disagreed, explaining that “treating AMD’s absence as implicating Lone Star’s standing confuses the requirements of Article III—which establish when a plaintiff may invoke the judicial power—and the requirements of [35 U.S.C.] § 281—which establish when a party may obtain relief under the patent laws.” The Supreme Court in 2014 “clarified that so-called ‘statutory standing’ defects do not implicate a court’s subject matter jurisdiction.” Based on that precedent, the Federal Circuit overruled its “earlier authority treating § 281 as a jurisdictional requirement.” The Federal Circuit held that “whether a party possesses all substantial rights in a patent does not implicate standing or subject-matter jurisdiction.”

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