In STC.UNM v. Intel Corp., Fed. Cir., No. 2013-1241 (June 6, 2014), The Federal Circuit found that the plaintiff patent owner did not have standing for its infringement claims because one of the four co-owners had not been joined and could not be involuntarily joined.

The asserted patent, U.S. Patent No. 5,705,321 ("Method for Manufacture of Quantum Sized Periodic Structures in Si Materials") issued in 1998 with four named inventors: three employees of the University of New Mexico ("UNM") and the fourth an employee of Sandia Corp. A joint assignment made two years prior to issuance incorrectly identified all four inventors as UNM employees. This was subsequently corrected with an assignment by UNM to Sandi Corp. Before the issuance of the '321 patent, two of the UNM inventors filed another patent, U.S. Patent No. 6,042,998, that incorporated the '321 patent by reference and issued in 2000. During the prosecution of the '998 patent, the PTO rejected the application for double-patenting in view of the '321 patent. UNM filed a terminal disclaimer to overcome the double-patenting rejection, which represented that "any patent granted on this instant application shall be enforceable only for and during such period" that the two patents were commonly owned, and that UNM was "the owner of record of a 100 percent interest." However, Sandia never claimed ownership in the '998 patent.

UNM later assigned the two patents to its licensing arm, STC.UNM, which sued Intel Corp. in 2010 for infringement of the '998 patent. Intel argued that the terminal disclaimer required the two patents to have common ownership, and in response STC.UNM represented that Sandia was a co-owner of the '998 patent.

Citing Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456 (Fed. Cir. 1998) for the proposition that standing required all co-owners to join as plaintiffs, the district court dismissed STC.UNM's suit because Sandia failed to voluntarily join and could not be involuntarily joined under Fed. R. Civ. P. 19(a). The Federal Circuit affirmed this on appeal and noted that the two exceptions under which a co-owner could be involuntarily joined as set forth in Ethicon were not present:

"First, when any patent owner has granted an exclusive license, he stands in a relationship of trust to his licensee" and can be involuntarily joined as a plaintiff in the licensee's infringement suit; second, "[i]f, by agreement, a co-owner waives his right to refuse to join suit, his co-owners may subsequently force him to join in a suit against infringers."

Ethicon at 1468. The Federal Circuit reasoned that this result followed from a patent co-owner's right to resist being forced into costly litigation. Thus, absent the aforementioned exceptions, the Court made clear that the congressional policy expressed in 35 U.S.C. §262 places a patent co-owner at the mercy of the other co-owners when it comes to establishing standing for a patent suit. Id. Accordingly, this case underscores the need to carefully assess the impact of ownership arrangements and patent prosecution strategies on potential litigation.