HP's Motion To Dismiss For Lack Of Standing Denied Where Plaintiff Demonstrated It Had Substantial Rights To Patents-In-Suit Even Though GE Had Right To Enforce Patents Against Seventeen Specific Companies, None Of Which Were Defendants In The Litiga

Princeton Digital Image Corporation ("PDIC") filed several patent infringement actions against Hewlett-Packard, Fujifilm, Xerox, Facebook and Ricoh, among others. The Defendants moved to dismiss the complaint for lack of standing. The case is based on two patents for digital image processing technology in cameras, computers and other devices. In May 2009, a predecessor to PDIC purchased the patents from GE.

As explained by the district court, "[a]ccording to the "Patent Purchase and License Agreement" between GE and PDIC LLC (the "Agreement"), "GE wish[ed] to sell ownership and all rights in the Patents to [PDIC LLC]" and "[PDIC LLC] wishe[d] to purchase from [GE] ownership and all rights in the Patents and to license and/or grant back to [GE] certain rights." (Id.) Consequently, GE "s[o]l[d], transfer[red], and assign[ed] to [PDIC LLC] all of [GE]'s right, title and interest in the Patents and all of [GE]'s rights and interest to all past, present and future claims of infringement of any of the Patents," and PDIC LLC agreed to grant GE and its affiliates "an irrevocable, non-exclusive, fully paid up, worldwide license under the Patents, for the lives thereof, to make, have made, use, sell, offer for sale and import products." (Id. Ex. A ¶¶ 2, 3.) PDIC LLC further agreed to grant GE "all rights and interest to all past, present, and future claims of infringement and the exclusive right to enforce (e.g., license, bring suit, etc.) the Patents against [sixteen companies]." (Id. Ex. A ¶ 4.) PDIC LLC finally agreed to join any infringement suit brought by GE and to indemnify GE if litigation PDIC LLC initiated required GE's involvement. (Id. Ex. A ¶¶ 4, 6.) In June 2009, GE and PDIC amended the Agreement to grant GE the right to enforce the '056 and '103 Patents against "any entity that is alleged to have infringed a Patent owing to its having previously engaged in making, using, offering for sale or importing articles that comply with the MPEG-2 or MPEG-4 video compression standards, and that may be liable to [GE] arising out of that infringement; but only to the extent of that infringement." (Id. Ex. A at 2, ¶ 4.) In January 2010, GE and PDIC again amended the Agreement to add another company to the original list of sixteen."

Based on these agreements, the district court concluded that "GE ostensibly holds: (1) a non-exclusive, worldwide license to make, use, and sell products under the Patents; (2) the exclusive right to enforce the Patents...