WiAV Solutions LLC (“WiAV”) is the owner of United States Patent No. 6,539,-205 (“the '205 Patent”) and No. 6,680,920 (“the '920 Patent”) and the purported exclusive licensee in a specific field of use of the following seven patents owned by Mindspeed Technologies, Inc. (“Mind-speed”): United States Patent No. 6,104,-992; No. 6,256,606; No. 6,385,573 (“the '573 Patent”); No. 6,507,814; No. 6,633,-841; No. 7,120,578; and No. 7,266,493 (“the '493 Patent”) (collectively, “the Mindspeed Patents”). WiAV filed a complaint alleging that defendants Motorola, Inc.; Nokia Corporation; Nokia Inc.; Palm, Inc.; Sony Ericsson Mobile Communications (USA), Inc.; Personal Com
Because the district court erred when it concluded that the third-party licensing rights at issue deprived WiAV of constitutional standing to assert the Mindspeed Patents against the Defendants, this court reverses the judgment of the district court and remands for further proceedings consistent with this opinion.
I. Background
A. The Mindspeed Patents
The Mindspeed Patents relate to aspects of signal transmission, as well as the encoding and decoding of data. At the center of this dispute are licensing rights in the Mindspeed Patents held by six third parties: Conexant Systems, Inc. (“Conexant”); Rockwell Science Center, LLC (“Rockwell Science Center”); Skyworks Solutions, Inc. (“Skyworks”); Qualcomm Incorporated (“Qualcomm”); Mindspeed; and Sipro Lab Telecom (“Sipro”). The rights stem from a series of spin offs and licensing agreements dating back to the late 1990’s. These transactions, as well as the transaction purporting to grant WiAV an exclusive license to the Mindspeed Patents, are summarized below.
1. Rockwell Science CenterConexant License
Rockwell International Corporation (“Rockwell International”), the original owner of the Mindspeed Patents, effected an assignment of the patents to Conexant when Rockwell International spun off the company in December 1998. As part of the spin-off, Conexant granted a subsidiary of Rockwell International, Rockwell Science Center, a limited, non-exclusive license to use the Mindspeed Patents in connection with its business. Conexant also permitted Rockwell Science Center to: (1) sublicense Rockwell International and its “Affiliates,” i.e., any entity that “controls, is controlled by, or is under common control with” Rockwell International; and (2) transfer the license in connection with the sale by either Rockwell International or its Affiliates of all or part of their respective businesses “to which such intellectual property rights relate.”
2. Conexant^Skyworks License
When Conexant subsequently spun off a portion of its business as Skyworks in January 2003, Conexant and Skyworks executed an agreement giving Skyworks an exclusive license in the field of ‘Wireless Handsets” to commercialize products covered by the Mindspeed Patents. The agreement defines a “Wireless Handset” as a device (or a component of a device) that “is capable of wireless communication of real-time voice” and “communicates directly to a Wireless WAN Infrastructure.” Within this limited field, the agreement grants Skyworks the exclusive right to assert infringement claims against third parties and to assign or sublicense its rights as it sees fit. The agreement also provides Skyworks the exclusive right to
For its part, Conexant retained the right under the agreement to “make, have made, use, offer to sell, export, and import Conexant Products in the field of Wireless Handsets.” The agreement defines “Conexant Products” as products in which “the specifications and designs ... are developed or owned by, or exclusively licensed to, Conexant or a Subsidiary of Conexant.” Conexant may license this right as part of “a divestiture, sale, or spin-off of any Conexant business unit ... and/or ... to any third party that works under a joint development agreement with Conexant” to develop a Conexant Product. Conexant also reserved the right to sublicense its wholly-owned subsidiary Mind-speed with respect to “Mindspeed Products” — products having “specifications and designs ... developed or owned by, or exclusively licensed to Mindspeed or a Mindspeed Subsidiary” — including a limited right to allow Mindspeed to assign and license its rights in the Mindspeed Patents.
3. Conexant-Mindspeed License
Conexant assigned title to the Mind-speed Patents to their current holder, Mindspeed, when Conexant spun off Mind-speed in June 2003. In addition, Conexant gave Mindspeed rights in the Mindspeed Patents similar to those Conexant had reserved for itself when it spun off Sky-works. In particular, Conexant granted Mindspeed a non-exclusive license to, among other things, produce and market Mindspeed Products. Conexant also permitted Mindspeed to: (1) assign some of its rights to Mindspeed subsidiaries; and (2) sublicense its rights to Mindspeed subsidiaries; to divested, sold, or spun-off business units; and to joint development partners working on Mindspeed Products. Conexant again reserved for itself a similar set of rights to practice, assign, and license the patents with respect to Conexant Products.
4. Skyworks-Qualcomm License
In April 2005, two years after Skyworks received the right to license Qualcomm, Skyworks exercised that right and granted Qualcomm a non-exclusive license to make, import, and sell components for a particular type of wireless communication device. The license permits Qualcomm to extend this right to Qualcomm “Affiliates,” i.e., “any present or future Parent ... or ... Subsidiary” of Qualcomm.
5. Mindspeed-Sipro License
The parties do not dispute that Mind-speed granted Sipro the right to offer a limited license to two of the Mindspeed Patents (the '573 and '493 patents) as part of a patent pool for the G.729.1 speech coding standard. The license permits licensees to manufacture and sell “Licensed Products” for the sole purpose of encoding and decoding data in accordance with the speech coding standard. The term “Licensed Products” excludes all “Wireless Applications,” which the license defines as any product or service capable of supporting communication over a wireless interface. But the license notes that WLAN, a wireless communication method, is not included within the definition of “Wireless Application.”
6. Skyworks-WiAV License
Finally, in September 2007, Skyworks and WiAV entered into an agreement granting WiAV the rights WiAV asserts in the underlying action. Under the agree
The following table summarizes the licensing rights held by each of the third parties mentioned above, including whom they may license, under which Mindspeed Patents they can extend a license, and any notable limitations on the scope of a potential license:
Entity Potential Licensees Patents
Rockwell Rockwell International All
Science and Affiliates
Center
Subsidiaries Spin-offs
Conexant Joint Development All
Partners (limited to Conexant Products)
Subsidiaries Spin-offs
Mindspeed Joint Development All
Partners (limited to Mindspeed Products)
Qualcomm (but
Skyworks promised not to All
_grant new licenses)_
Qualcomm_ Affiliates All
Anyone (limited to '573 and
Sipro Mindspeed Products '493 in the field of WLAN) patents
B. District Court Proceedings
In July 2009, WiAV filed a complaint alleging that the Defendants and Sony Ericsson Mobile Communications AB had manufactured and sold wireless communication devices that infringe the '205 and '920 patents, as well as WiAV’s supposed exclusive right to practice the Mindspeed Patents in the field of Wireless Handsets. To satisfy prudential standing, the complaint also named Mindspeed as the “defendant patent owner” of the Mindspeed Patents. The Defendants moved to dismiss the counts of the complaint alleging that they had infringed the Mindspeed Patents (Counts 1-14), arguing that WiAV lacked constitutional standing to assert the Mindspeed Patents because WiAV is not an exclusive licensee of the patents. They claimed that in
Textile Productions, Inc. v. Mead Corp.,
The district court granted the motion to dismiss. The court acknowledged that under Federal Circuit precedent a party could be an exclusive licensee of a patent despite its license being subject to preexisting nonexclusive licenses held by others.
Dismissal Order,
II. Discussion
The sole issue presented by this appeal is whether WiAV has constitutional standing to assert the Mindspeed Patents against the Defendants. This is a question of law that this court reviews de novo, applying Federal Circuit precedent.
Prima Tek II, L.L.C. v. A-Roo Co.,
WiAV argues on appeal that, at the behest of the Defendants, the district court improperly fashioned a new legal rule based on dicta in Textile Productions. According to WiAV, Textile Productions did not mention the type of third-party licensing rights at issue, much less hold that such rights prevent a party from being an exclusive licensee of a patent. WiAV contends that this court has never concluded that a party holding the exclusive rights in a patent held by WiAV lacks constitutional standing, even when those rights were subject to prior nonexclusive licenses. WiAV asserts that under our precedent a party is an exclusive licensee of a patent— and therefore has constitutional standing to assert the patent — -when it holds any of the exclusionary rights in a patent.
The Defendants respond that although a party can be an exclusive licensee of a patent despite its license being subject to earlier nonexclusive licenses, this court has made clear that a licensee cannot be an exclusive licensee of a patent if others retain the right to license the patent. To support this argument, the Defendants point to our statement in
Textile Productions
that “if a patentee-licensor is free to grant licenses to others, licensees under that patent are not exclusive licensees.... To qualify as an exclusive license, an agreement must clearly manifest the patentee’s promise to refrain from granting to
anyone else
a license in the area of exclusivity.”
WiAV has the better of this argument. Article III, § 2 of the Constitution limits the jurisdiction of federal courts
Often a statute creates the necessary legally protected interest.
See Warth v. Seldin,
The Act provides that a “patentee” has the right to initiate a “civil action for infringement of [its] patent.” 35 U.S.C. § 281. The term “patentee” encompasses both the owner of the patent and the assignee of all substantial rights in the patent.
See
35 U.S.C. § 100(d) (stating that the term “patentee includes not only the patentee to whom the patent was issued but also the successors in title to the patentee”);
Sicom Sys. Ltd. v. Agilent Techs., Inc.,
Because the legally protected interests in a patent are the exclusionary rights created by the Patent Act, a party holding one or more of those exclusionary rights — such as an exclusive licensee — suffers a legally cognizable injury when an unauthorized party encroaches upon those
Thus, the touchstone of constitutional standing in a patent infringement suit is whether a party can establish that it has an exclusionary right in a patent that, if violated by another, would cause the party holding the exclusionary right to suffer legal injury. Contrary to the suggestion of the Defendants, neither this court’s Textile Productions nor Mars decision freed the constitutional standing inquiry from its legal injury mooring.
In
Textile Productions,
the court considered a narrow question: “whether a requirements contract for a patented product automatically converts the exclusive supplier into an exclusive licensee of the patent.”
Mars is similarly inapposite. There, the court addressed whether a party was an
implied
exclusive licensee of the patents in suit in the absence of a written agreement explicitly granting the party exclusionary rights in the patents.
See Mars,
In sum, neither of these cases supports the proposition pressed by the Defendants on appeal: that for a licensee to be an exclusive licensee of a patent, the licensee must be the
only
party with the ability to license the patent. Indeed, this court has recently held otherwise.
See Alfred E. Mann Found. For Scientific Research v. Cochlear Corp.,
Because an exclusive licensee derives its standing from the exclusionary rights it holds, it follows that its standing will ordinarily be coterminous with those rights. Depending on the scope of its exclusionary rights, an exclusive licensee may have standing to sue some parties and not others. For example, an exclusive licensee lacks standing to sue a party for infringement if that party holds a preexisting license under the patent to engage in the allegedly infringing activity. Similarly, an exclusive licensee lacks standing to sue a party who has the ability to obtain such a license from another party with the right to grant it. In both of these scenarios, the exclusive licensee does not have an exclusionary right with respect to the alleged infringer and thus is not injured by that alleged infringer. But if an exclusive licensee has the right to exclude others from practicing a patent, and a party accused of infringement does not possess, and is incapable of obtaining, a license of those rights from any other party, the
This court therefore holds that an exclusive licensee does not lack constitutional standing to assert its rights under the licensed patent merely because its license is subject not only to rights in existence at the time of the license but also to future licenses that may be granted only to parties other than the accused. If the accused neither possesses nor can obtain such a license, the exclusive licensee’s exclusionary rights with respect to that accused party are violated by any acts of infringement that such party is alleged to have committed, and the injury predicate to constitutional standing is met.
With these principles in mind, the key question in determining whether WiAV has standing to assert the Mind-speed Patents against the Defendants is not, as the Defendants would have it, whether WiAV has established that it has the right to exclude all others from practicing the patent. The question is whether WiAV has shown that it has the right under the patents to exclude the Defendants from engaging in the alleged infringing activity and therefore is injured by the Defendants’ conduct. This court concludes that WiAV has satisfied this standard.
Skyworks granted WiAV the exclusive right to practice and enforce the Mind-speed Patents in the Wireless Handset field, and neither Rockwell Science Center, Mindspeed, Conexant, Skyworks, Qualcomm, nor Sipro has the right to extend licenses to the Defendants in this area. Rockwell Science Center has the right to license Rockwell International and its Affiliates, as well as to transfer its license in connection with a sale by Rockwell International or its Affiliates of all or part their businesses related to the Mindspeed Patents; it is undisputed that the Defendants do not and cannot fall into any of these categories. The ability of Mindspeed and Conexant to extend their licenses is limited to: (1) subsidiaries; (2) divested, spun off, or sold business units; and (3) joint development partners developing either a “Mindspeed Product” or a “Conexant Product,” respectively. There is no evidence in the record that suggests the Defendants satisfy any of these criteria.
The Defendants assert that WiAV cannot be an exclusive licensee of the Mind-speed Patents because Skyworks still holds the right to license Qualcomm under the patents in all fields, despite Skyworks promising that it would not grant any new licenses under the Mindspeed Patents. But the relevant question is whether Sky-works can license the Defendants to practice the patents in WiAV’s field of exclusivity, and nothing in the record indicates that Skyworks has this right.
The ability of Qualcomm to license its “Affiliates” is also immaterial, as there is no argument or evidence suggesting that the Defendants are Qualcomm Affiliates. The Defendants contend that Qualcomm could purchase and then license a supplier of the alleged infringing technology and thereby insulate downstream users of the technology from claims of infringement. But, whatever the merits of this proposition, to have standing to sue the Defendants at this point in the proceedings WiAV need only present a sufficient allegation of legal injury.
Cf. Davis v. Passman,
Finally, the Defendants suggest that Si-pro, unlike the other third parties at issue, can extend licenses to the Defendants under at least two of the Mindspeed Patents to engage in the allegedly infringing activi
Conclusion
For the foregoing reasons, this court reverses the judgment of the district court and remands for further proceedings consistent with opinion.
REVERSED AND REMANDED
Costs
Costs are awarded to WiAV.
Notes
. An exclusive licensee generally must' join the patent owner to the suit to satisfy prudential standing constraints, i.e., the "judicially self-imposed limits on the exercise of federal jurisdiction.”
Elk Grove Unified Sch. Dist. v. Newdow,
