Property, intangible

a blog about ownership of intellectual property rights and its licensing

How to Put a Dead Stop to a Patent Infringement Suit … For Now

I previously wrote about a Federal Circuit decision with a bit of an odd fact pattern. There was some kind of joint development between the University of New Mexico (UNM) and Sandia. A Sandia inventor assigned a resulting patent, the ‘998 patent, to UNM instead of his employer, Sandia. UNM then assigned the patent to Sandia. UNM (actually a successor in interest, STC.UNM) later asserted a different patent against defendant Intel. But the patent asserted had been terminally-disclaimed with the ‘998 patent, so, in order to have any case at all, STC.UNM had to say that Sandia was a co-owner, or the patent would have been unenforceable.

But that decision created a new problem for STC.UNM, which is that all patent co-owners have to be joined but Sandia didn’t want to participate in the suit, preferring to remain “neutral.” STC.UNM therefore moved under Federal Rule of Civil Procedure 19 to have Sandia involuntarily joined.

A panel of the Federal Circuit held that substantive patent law gives a co-owner the right not to be joined and, since procedural law cannot abridge substantive law, the suit would be dismissed because not all co-owners could be joined. STC.UNM filed for a rehearing in banc, which was denied.

But there were two strong dissents from the denial, one by Judge Newman and one by Judge O’Malley. Judge Newman’s dissent focused on the exceptionalism of categorically exempting patent suits from the reach of Rule 19. Judge O’Malley attacked the basic premise that all co-owners must be joined, arguing that it “is predicated upon a series of misinterpretations and misstatements of that purported authority.” Judge O’Malley’s dissent is, in my opinion, a good demonstration of how “black letter” law sometimes is the result of extensions of the law over time that eventually reach a place far different from where the rule started.

Some theorize that its teed up for the Supreme Court (paywall).

STC.UNM v. Intel Corp., No. 2013-1241 (Fed. Cir. Sept. 17. 2014)(denial of rehearing en banc).

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