District Court Must Consider Whether the Patentee Must be Joined Before Dismissing the Case for Lack of Statutory Standing
The question of who must join a patent infringement suit often raises interesting questions of rights, obligations, and control of the litigation. In the global marketplace with increased licensing arrangements, the extent of retaining rights can have a direct impact on the viability of a lawsuit and protecting intellectual property. Recently, the Federal Circuit in Lone Star Silicon Innovations v. Nanya Technology provided further clarification on what meets the standing requirement to bring a patent infringement case, and for dismissing a case for lack of standing. In this patent litigation, the asserted patents (twelve in all) were originally assigned to Advanced Micro Devices (AMD). AMD later executed an agreement purporting to transfer “all right, title and interest” in the patents to Lone Star. The transfer agreement, however, imposes several limitations on Lone Star. For example, Lone Star may only assert the patents against “Unlicensed Third Party Entit[ies]” specifically listed in the agreement. To add new entities, Lone Star and AMD both must agree. If Lone Star sues an unlisted entity, AMD has the right, without Lone Star’s approval, to sublicense the patents to the unlisted entity. Further, AMD can prevent Lone Star from assigning the patents, and AMD and its customers can continue to practice the patents. Finally, AMD shares in any revenue Lone Star...