stc.unm v. Intel Corporation
754 F.3d 940
Fed. Cir.2014Background
- The '321 patent arose from joint work by UNM-employed inventors and Sandia-employed Bruce Draper; UNM was initially assigned the '321 patent, and later corrected Draper’s rights to Sandia via the Draper Assignment.
- UNM (later STC as its licensing arm) obtained the '998 patent from UNM inventors Brueck and Zaidi; Draper was not named as an inventor on the '998 and did not contribute to its claimed subject matter.
- During prosecution the PTO issued double-patenting rejections over the '321 patent; UNM filed a terminal disclaimer stating the '998 would be enforceable only while commonly owned with the '321.
- STC sued Intel for infringement of the '998 patent; Sandia had long denied any interest in the '998, but STC later executed a 2011 assignment to confirm Sandia’s undivided interest in both patents.
- Sandia refused to join the infringement suit; the district court dismissed STC’s suit for lack of standing, and the Federal Circuit affirmed, holding that a co-owner who refuses to join ordinarily cannot be involuntarily joined under Rule 19(a) absent a recognized exception.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a co-owner who refuses to join can be involuntarily joined under Fed. R. Civ. P. 19(a) | Ethicon does not displace Rule 19; Rule 19(a) permits involuntary joinder of necessary parties including co-owners | Substantive patent law (Ethicon) gives each co-owner the right to block suit; this substantive right trumps procedural Rule 19 | Court held Ethicon’s substantive rule stands: a co-owner ordinarily must consent and cannot be involuntarily joined under Rule 19(a) except in narrow, recognized exceptions |
| Whether Sandia held an ownership interest in the '998 patent prior to STC’s 2011 assignment | Draper Assignment language ("issued thereon" and "continuations") operated to give Sandia an automatic interest when '998 issued or when it became a continuation-in-part | Ownership must derive from inventorship; Draper did not invent claims of '998, so Draper/Sandia had no pre-2011 interest to assign | District court’s partial summary judgment that Sandia did not co-own '998 prior to the 2011 assignment was not disturbed on standing grounds (court did not resolve ownership issue on appeal) |
| Whether equitable joinder under Rule 19(b) should allow suit to proceed without Sandia | STC urged equitable factors favor allowing suit to proceed | Intel argued equitable factors did not weigh in STC’s favor given Sandia’s refusal and potential prejudice | District court found Rule 19(b) factors favored dismissal; STC did not appeal that ruling |
| Applicability of recognized exceptions to permit involuntary joinder | STC argued Rule 19 should apply broadly | Court noted two recognized exceptions (exclusive-licensee suits; waiver by co-owner) but found neither present | Court held no exception applied here, so involuntary joinder was improper |
Key Cases Cited
- Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456 (Fed. Cir. 1998) (as a matter of substantive patent law, co-owners ordinarily must consent to join as plaintiffs)
- Schering Corp. v. Roussel-UCLAF SA, 104 F.3d 341 (Fed. Cir. 1997) (one co-owner may impede another’s suit by refusing to join; license effects on damages and injunctions)
- Independent Wireless Tel. Co. v. Radio Corp. of Am., 269 U.S. 459 (U.S. 1926) (patent owner is indispensable and may be joined as defendant or involuntary plaintiff)
- Waterman v. Mackenzie, 138 U.S. 252 (U.S. 1891) (all co-owners should be joined in an infringement action)
- DDB Techs., L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 1284 (Fed. Cir. 2008) (Rule 19 does not permit involuntary joinder of a patent co-owner in infringement suits)
- Willingham v. Star Cutter Co., 555 F.2d 1340 (6th Cir. 1977) (if an unwilling co-owner is amenable to service, the court should join him as party; involuntary joinder procedure in patent context)