C.A. No. 12-10562-NMG, 2012 WL 139737 (D. Mass. Jan. 8, 2013) (Gorton, D. J.) [Standing]

PerkinElmer Health Sciences, Inc. (“PerkinElmer”) brought suit against Agilent Technologies, Inc. (“Agilent), alleging that Agilent breached a sublicense agreement and infringed patents for which PerkinElmer holds an exclusive license. Agilent moved to dismiss the case on the basis of lack of standing. The Court denied Agilent’s motion, finding that PerkinElmer had “all substantial rights” in the patents. The patents at issue in this case—U.S. Patent No. 5,130,538, No. 5,686,726, and No. 5,581,080—resulted from the work of three researchers at Yale University (“Yale”) in the field of charged ions. The patents were assigned to Yale, which continues to hold them.  

In March 1997, Yale granted an exclusive license to the ‘538 Patent and any subsequently-issued, related patents to Analytica of Branford, Inc. (“AoB”) and its successors. According to this agreement, Yale retained the right to use the patents for non-commercial purposes, to participate in infringement actions brought by AoB, and to sue an alleged infringer if, after providing notice to AoB, AoB declined to sue. The license otherwise granted AoB an exclusive, world-wide license for the life of the patents. In 2009, AoB merged with and into PerkinElmer.  

In March 2012, PerkinElmer filed a complaint alleging that Agilent willfully and materially breached a sublicense agreement related to the patents-in-suit when it failed to make royalty payments. PerkinElmer also alleged that Agilent infringed the patents. Agilent moved to dismiss the complaint under Fed. R. Civ. P. 12(b)(1) arguing that PerkinElmer lacked standing to sue Agilent because it did not own all substantial rights to the patent.

The patentee and its successors-in-title have standing to bring an infringement claim under the Patent Act. Moreover, an exclusive licensee is considered a successor-in-title with standing to sue for patent infringement if the patent owner transferred “all substantial rights” to the patent under the license agreement. In assessing whether “all substantial rights” were transferred from Yale to PerkinElmer, the Court reviewed the nine factor test set forth in Alfred E. Mann Found. For Scientific Research v. Cochlear Corp., 604 F.3d 1354, 1360-61 (Fed. Cir. 2010). According to that case, “the nature and scope of the licensor’s retained right to sue accused infringers is the most important.” 

The District Court analogized PerkinElmer’s rights to those rights retained by the licensor in Vaupel Textilmaschinen KG v. Meccanica Euro Italia S.P.A., 944 F.2d 870, 874 (Fed. Cir. 1991). There, the Federal Circuit held that an exclusive patent licensee had standing to sue for infringement where it acquired: (1) rights from the patentee to bring lawsuits for infringement, (2) the exclusive right to make, use, and sell items practicing the patent, and (3) total responsibility to incur costs arising from the pursuit of an infringement action. The dispositive grant was the right to sue, which was subject only to the obligation to inform the patent owner. The District Court noted that “[a]lthough the patentee retained a veto right on sublicensing the patent, a reversionary right in the event of bankruptcy and a right to receive infringement damages, the Federal Circuit ruled that none of those rights ‘was so substantial as to reduce the transfer to a mere license or indicate an intent not to transfer all substantial rights.’” In the case at hand, the license agreement’s limitation on assignments was counteracted by PerkinElmer’s ability to sublicense its rights and to use the patents and settle claims without Yale’s supervision. The only limitations on PerkinElmer’s rights were Yale’s right to bring suit against alleged infringers if PerkinElmer chose not to and the limitation on assignment of the license. Accordingly, Judge Gorton concluded that “all substantial rights” in the patents had been transferred to PerkinElmer and, thus, PerkinElmer had standing to pursue the present infringement case.