101 F.4th 807
Fed. Cir.2024Background
- Intellectual Tech LLC (IT), a subsidiary of OnAsset Intelligence, sued Zebra Technologies for patent infringement, asserting U.S. Patent No. 7,233,247.
- OnAsset had granted its lender, Main Street Capital Corporation, a security interest in its patents (including the one at issue) in 2011 due to a loan agreement; OnAsset defaulted on that loan in 2013.
- In 2017, following a forbearance agreement with Main Street, OnAsset assigned the patent to IT, and IT granted Main Street a similar security interest. IT also defaulted by 2018.
- The security agreements allowed Main Street, upon default, to enforce, assign, or license the patents but did not mandate automatic forfeiture of rights by IT unless Main Street acted.
- Zebra moved to dismiss for lack of constitutional standing, arguing IT had no exclusionary rights under the patent. The district court agreed, holding that Main Street’s rights upon default stripped IT of standing.
- The Federal Circuit reversed, holding that IT retained at least some exclusionary rights and thus had Article III standing.
Issues
| Issue | Plaintiff's Argument (IT) | Defendant's Argument (Zebra) | Held |
|---|---|---|---|
| Standing: Exclusionary rights post-default | IT retained exclusionary rights; Main Street’s rights did not fully divest IT | Main Street's rights on default gave it the ability to assign/license, stripping IT of exclusionary rights | IT still had exclusionary rights and thus Article III standing |
| Impact of lender's power to assign/license | Main Street’s potential (not exercised) ability to assign/license did not constitute present divestment | Main Street’s options sufficed to defeat standing, even if unexercised | Actual exercise is required to divest; unexercised option does not strip rights |
| Effect of shared licensing ability | Shared licensing authority does not eliminate IT's standing | Shared ability destroys owner’s exclusionary rights | Shared licensing ability does not preclude standing for the patent owner |
| Ability for standing to be cured by joinder | Not decided on appeal, as constitutional standing existed from filing | Standing defect at filing is incurable; joinder irrelevant | Joinder not reached; standing existed at inception |
Key Cases Cited
- WiAV Solutions LLC v. Motorola, Inc., 631 F.3d 1257 (Fed. Cir. 2010) (discussing distinction between exclusive and non-exclusive licensee standing)
- Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359 (Fed. Cir. 2010) (standing must be proven at each stage; interpretation of patent assignments)
- Aspex Eyewear, Inc. v. Miracle Optics, Inc., 434 F.3d 1336 (Fed. Cir. 2006) (patent owner doesn't lose standing merely by limited transfer or license)
- Alfred E. Mann Foundation for Scientific Research v. Cochlear Corp., 604 F.3d 1354 (Fed. Cir. 2010) (patent owner retains standing if not all substantial rights are transferred)
- AntennaSys, Inc. v. AQYR Technologies, Inc., 976 F.3d 1374 (Fed. Cir. 2020) (co-owners of patents can have Article III standing)