Keranos, LLC v. Silicon Storage Technology, Inc.
797 F.3d 1025
| Fed. Cir. | 2015Background
- Keranos, LLC acquired exclusive license rights to three expired patents from United Module Corporation (UMC) shortly before suing multiple manufacturers and customers for infringement of split-gate "SuperFlash" memory technology. UMC retained legal title but granted Keranos broad exclusive rights.
- Defendants moved to dismiss for lack of standing because the patents had expired before Keranos acquired rights; the district court held Keranos had standing based on the license.
- Keranos served Local Patent Rule 3-1 infringement contentions identifying some accused products by specific model numbers and others by product families or technology ("SuperFlash"). Keranos later sought leave to amend to add thousands of specific product numbers.
- The district court denied Keranos’s motions to amend, finding Keranos failed to identify products "as specifically as possible" and had not shown diligence in using publicly available information to identify accused products.
- Keranos dismissed remaining specifically-identified claims as de minimis; the court entered summary judgment for defendants. On appeal the Federal Circuit affirmed standing, vacated the denial of leave to amend, and remanded for further party-by-party consideration of good cause under the local patent rules.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue on expired patents | Keranos: exclusive license transferred all substantial rights so Keranos may sue alone | Defendants: Keranos lacks standing because UMC retained legal title and patents had expired before transfer | Held: Keranos has standing; exclusive license conveyed all substantial rights, so standing does not turn on whether patent was expired when rights transferred |
| Denial of leave to amend infringement contentions under local patent rules | Keranos: original contentions (naming SuperFlash, product families) gave fair notice; discovery needed to identify specific models; amendment adds no new claims/theories | Defendants: Keranos should have used publicly available info to identify specific products; failure to do so shows lack of diligence and justifies denial | Held: District court within discretion to require diligence and specificity, but record did not resolve whether Keranos showed good cause for each defendant; vacated and remanded for party-by-party reconsideration |
Key Cases Cited
- Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538 (Fed. Cir.) (standing is jurisdictional)
- Prima Tek II, LLC v. A-Roo Co., 222 F.3d 1372 (Fed. Cir.) (‘‘patentee’’ and successors; all substantial rights test)
- Aspex Eyewear, Inc. v. Miracle Optics, Inc., 434 F.3d 1336 (Fed. Cir.) (exclusive license can be tantamount to assignment)
- Vaupel Textilmaschinen KG v. Meccanica Euro Italia SPA, 944 F.2d 870 (Fed. Cir.) (look to parties’ intent and substance of grant)
- Alfred E. Mann Found. for Scientific Research v. Cochlear Corp., 640 F.3d 1354 (Fed. Cir.) (importance of right to sue in assignment analysis)
- Mars, Inc. v. Coin Acceptors, Inc., 527 F.3d 1359 (Fed. Cir.) (transfer of only right to sue for past infringement is insufficient)
- Crown Die & Tool Co. v. Nye Tool & Mach. Works, 261 U.S. 24 (U.S.) (policy against dividing patent rights to spur third-party suits)
- O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355 (Fed. Cir.) (purpose of local patent rules: crystallize theories early)
- STMicroelectronics, Inc. v. Motorola, Inc., 308 F. Supp. 2d 754 (E.D. Tex.) (local rule practice on identifying accused products)
- Genentech, Inc. v. Amgen, Inc., 289 F.3d 761 (Fed. Cir.) (abuse-of-discretion standard for case-management rulings)