On the left we have a disinterested patent owner; there was a mixup about the status of an inventor, Bruce Draper, so he assigned his rights in what ultimately became the ‘321 patent to the University of New Mexico (UNM) rather than his employer, Sandia. UNM realized the mistake and assigned to Sandia “those rights and interests previously assigned to [UNM] by Bruce Draper … and to any and all Patents which may issue thereon … and to any and all divisions, reissues, continuations, and extensions.”
On the right we have plaintiff STC.UNM (STC), a successor-in-interest to the ‘321 patent and another patent filed by UNM, the ‘998 patent. Draper made no inventive contribution to the invention in the ‘998 patent and was not listed as an inventor. Although the application for the ‘998 patent originally didn’t claim any priority to the ‘321 patent, it was corrected after issue to claim that it was a continuation-in-part of the ‘321 patent and it was subject to a terminal disclaimer with the ‘321 patent.
STC sued Intel for infringement of the ‘998 patent.
Sandia has never claimed an interest in the ‘998 patent, including during discovery, and STC has consistently held itself out as the sole owner of the ‘998 patent. When Intel pointed out that STC couldn’t enforce the ‘998 patent because it didn’t have the same owners as the ‘321 patent, STC decided that Sandia was, in fact, a co-owner of the ‘998 patent. Which meant that Sandia had to be a party in the lawsuit, but there was a hitch with that too: Sandia wasn’t interested in joining the suit, “preferring to take a neutral position with respect to the matter.”
According to 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.” Indeed, Ethicon recognizes that “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.”
STC challenged the district’s court conclusion that Ethicon meant that Sandia could not be joined as an indispensible party on the theory that Ethicon didn’t involve Rule 19(a), the rule of involuntary joinder.
But according to the Court of Appeals for the Federal Circuit, “Rules of procedure, such as that in Rule 19(a), must give way to substantive patent rights.” The only situations where involuntary joinder has been allowed are where an exclusive licensee is bringing suit and where a co-owner has by agreement waived it right to refuse to join a suit. Neither was the case here nor was this situation similar to those two situations:
Each of the recognized exceptions relies predominantly on an absent co-owner who has in some way affirmatively given up its substantive right to refuse to join the suit. In this case, Sandia has—at the other end of the spectrum—affirmatively retained this right by consistently expressing its desire to not join the case.
Judge Newman disagreed in dissent: “The panel majority offers the anomalous rationale that when an infringement suit is brought by an exclusive licensee, the patent owner can be joined; but when an infringement suit is brought by a co-owner, the other co-owner cannot be involuntarily joined.”
STC.UNM v. Intel Corp., No. 2013-1241 (Fed. Cir,. June 6, 2014).
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