Standing Defect Cannot Be Cured By A Retroactive License Agreement

Alps South, LLC v. The Ohio Willow Wood Company, No. 2013-1452, -1488, 2014-1147, -1426, 2015 U.S. App. LEXIS 9368 (Fed. Cir. Jun. 5, 2015) (Chen, J.). Click Here for a copy of the opinion.

Alps South ("Alps"), an exclusive licensee of US Patent 6,552,109, sued The Ohio Willow Wood Company ("OWW") for infringement without joining the patent owner (AEI) as a co-plaintiff. OWW moved to dismiss the case for lack of standing under the Patent Act, which the district court denied. At trial, a jury found the '109 patent valid and willfully infringed. OWW appealed.

The main issue addressed by the Federal Circuit on appeal was whether Alps, without joining AEI as a co-plaintiff, had standing to sue. "An exclusive licensee has standing to sue it its own name, without joining the patent holder where 'all substantial' rights' in the patent are transferred." Here, the license "granted Alps the right to enforce the '109 patent and provided that AEI would cooperate 'to the extent necessary... to enable [Alps] to enforce the patent rights...'" Concurrently, the license limited the licensee's rights to prosthetic products, even though the '109 patent does not limit the patented articles to any application or use. Because AEI retained the patent right for all areas outside of the prosthetics field, the Federal Circuit concluded that the license "did not convey sufficient rights" in the '109 patent to provide Alps with standing to sue independently, without joining AEI as a plaintiff.

Alps also argued that it cured the standing defect by executing a nunc pro tunc amended agreement while the motion to dismiss was pending. In addition to expanding Alps' rights by eliminating the field of use restriction, the amended agreement purported to be effective as of the date of the original license. Neither party disputed that the amended agreement...