On June 6, 2014, the Federal Circuit affirmed a decision by the District of New Mexico granting summary judgment for lack of standing due to the plaintiff’s failure to join all co-owners of the patent at issue. In 2010, STC.UNM (STC) filed suit against Intel Corp for infringing U.S. Patent No. 6,042,998 (’998 patent) titled “Method and Apparatus for Extending Spatial Frequencies in Photolithography Images.” During the course of the litigation, in an unsuccessful attempt to fend off summary judgment, STC assigned an undivided interest in the ’998 patent to Sandia Corp (2011 Assignment). (The ’998 patent was a continuation-in-part of U.S. Patent No. 5,705,321 (’321 patent); it was undisputed that Sandia co-owned the ’321 patent). Despite STC’s actions, Intel moved for partial summary judgment on the basis that the ’998 patent was unenforceable because Sandia was not a co-owner when a terminal disclaimer was filed to protect the ’998 patent application from rejection during the prosecution process. (During the prosecution of the ’998 patent application, the PTO rejected it twice for double patenting over the ’321 patent. To overcome the rejections, STC’s predecessor-in-interest filed a terminal disclaimer stating that the ’321 and ’998 patents were commonly owned, which was not correct.) STC’s attempt to cure the terminal disclaimer’s co-ownership problem with the 2011 Assignment did not work. The district court granted summary judgment finding that Sandia did not have an ownership interest in the ’998 patent prior to the execution of the 2011 Assignment.
Following the summary judgment ruling, STC and Intel cross-moved on the issue of standing concerning Sandia’s post-2011 Assignment ownership of the ’998 patent. Unfortunately for STC, Sandia’s refusal to join the lawsuit resulted in dismissal for lack of standing under the holding in Ethicon, Inc. v. United States Surgical Corp., 135 F.3d 1456 (Fed. Cir. 1998) (“as a matter of substantive patent law, all co-owners must ordinarily consent to join as plaintiffs in an infringement suit” and “one co-owner has the right to impede the other co-owner’s ability to sue infringers by refusing to voluntarily join in such a suit”). On appeal, STC argued that it should have been allowed to join Sandia involuntarily under Federal Rule of Civil Procedure 19(a) because the holding in Ethicon does not address or preclude Rule 19(a) joinder. The Federal Circuit emphatically disagreed stating: “To remove any doubt, this court holds that the right of a patent co-owner to impede an infringement suit brought by another co-owner is a substantive right that trumps the procedural rule of involuntary joinder under Rule 19(a).”
STC.UNM v. Intel Corp., 2013-1241 (Fed Cir. June 6, 2014) [Rader (opinion), Newman (dissenting), Dyk]