767 F.3d 1351
Fed. Cir.2014Background
- STC.UNM (University of New Mexico’s licensing arm) sued Intel for patent infringement; Sandia Corporation is a joint co-owner of the asserted patents and did not join as a plaintiff.
- District court dismissed the suit because Sandia declined to participate and the court concluded a co-owner cannot be involuntarily joined under Rule 19.
- STC.UNM appealed; the panel affirmed dismissal and STC sought rehearing en banc, which was denied.
- Concurrence (DYK, joined by MOORE and TARANTO) reasons Rule 19 cannot be used to abridge substantive patent rights and endorses the view that co-owners ordinarily must all consent to enforcement.
- Dissents (NEWMAN joined by LOURIE, O’MALLEY, WALLACH; and O’MALLEY separately) argue Rule 19(a) is mandatory, that involuntary joinder is appropriate to protect defendants and allow adjudication, and that no clear statutory or common-law substantive right prevents Rule 19’s application.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 19(a) permits involuntary joinder of a patent co-owner | STC: Rule 19(a) authorizes joinder of necessary parties, including recalcitrant co-owners, to allow adjudication | Intel: Substantive patent law gives each co-owner a right not to be forced into suit; Rule 19 cannot abridge that right | Panel: Rule 19 does not authorize involuntary joinder of a co-owner when substantive patent law grants the co-owner a right not to be joined |
| Whether a patent co-owner has a substantive right to block another co-owner’s infringement suit | STC: No substantive right should defeat Rule 19 joinder when co-owner is necessary and within jurisdiction | Intel: Co-owners have substantive rights (including licensing) that permit them to refuse to join enforcement actions | Panel: There is a substantive patent-law interest (rooted in precedent and §262) that allows a co-owner to decline to join, so involuntary joinder is improper |
| Whether precedent and statute (35 U.S.C. §262) support mandatory application of Rule 19 in patent co-ownership disputes | STC: Rule 19 and federal practice encourage joinder; earlier cases do not establish a bar to involuntary joinder | Intel: Precedent (Ethicon, Schering, Willingham) and §262 show co-owners can impede suits and protect rights against involuntary joinder | Panel concurrence: Prior Federal Circuit precedent recognizes co-owner refusal to join; Rule 19 cannot change substantive patent rights |
| Whether en banc review is warranted to resolve the conflict between Rule 19 and asserted substantive patent rights | STC: Yes—need en banc clarification that Rule 19 governs joinder and involuntary joinder is available | Intel: No—the panel decision accords with established patent-law principles and Rule 19’s scope | Court: Petition for rehearing en banc denied; multiple judges dissented from denial |
Key Cases Cited
- Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456 (Fed. Cir. 1998) (discusses co-owners’ rights and noted that co-owners ordinarily must consent to join as plaintiffs)
- Schering Corp. v. Roussel-UCLAF SA, 104 F.3d 341 (Fed. Cir. 1997) (addresses co-owner licensing and impact on ability to recover damages)
- Willingham v. Lawton, 555 F.2d 1340 (6th Cir. 1977) (early discussion of co-owner rights and involuntary joinder in context of contractual waiver)
- IpVenture, Inc. v. ProStar Computer, Inc., 503 F.3d 1324 (Fed. Cir. 2007) (dicta stating Rule 19 can permit joining entities with independent enforcement rights)
- DDB Techs., L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 1284 (Fed. Cir. 2008) (references Ethicon’s statement on Rule 19 and co-owners)
- Indep. Wireless Tel. Co. v. Radio Corp. of Am., 269 U.S. 459 (1926) (explains owner’s duty to exclusive licensee to permit joinder as plaintiff)
- Waterman v. Mackenzie, 138 U.S. 252 (1891) (common-law background that joinder of all owners in suits avoids multiple suits)
- Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102 (1968) (Rule 19(b) provides proper framework for deciding whether to proceed without an absent party)