Federal Circuit Upholds District Court’s Decision to Dismiss Patent Lawsuit by STC.UNM against Intel Corp.

The lawsuit filed by STC.UNM, the licensing arm of the University of New Mexico, against Intel Corp. for infringement of the ‘998 patent’ was dismissed by the district court while the Federal Circuit affirmed the lower court’s dismissal of the case. The ‘998 patent was filed as a continuation-in-part (CIP) of the ‘321 patent’ as a CIP or continuation-in-part.

The court dismissed the suit for lack of standing because it was mandatory for all patent co-owners to join the suit. Saleem Zaidi, An-Shyang Chu, and Steven Brueck were employed by the University of New Mexico (UNM) while Bruce Draper, a fourth inventor, was employed by Sandia Corp. They executed a joint assignment to UNM of the application but the assignment wrongly defined all assignors as employees of UNM.

Complications

UNM executed an assignment to Sandia Corp. to correct the fourth inventor Draper’s prior assignment to UNM and referenced the invention that led to the ‘321 patent, transferring the rights and interests previously assigned to UNM by Draper to Sandia. It included any and all patents that may be issued thereon. Two of the UNM inventors continued their research and filed the application that led to the ‘998 patent while the application leading to the ‘321 patent was pending. The application did not claim priority to any earlier application but referred to the ‘321 patent. While UNM obtained assignments from both inventors, Draper, who was Sandia’s employee, was not listed as an inventor to the ‘998 patent.

The PTO rejected the claims for double patenting over the ‘321 patent which shared two common inventors. However, to overcome the rejections on double-patenting, the UNM through its patent lawyers filed a terminal disclaimer that stated that patents granted on the application will be enforceable only while both ‘998 and ‘321 patents were commonly owned. This resulted in UNM assigning interest of both patents to STC. The licensing arm of the UNM corrected the ‘998 patent to include Hersee and Malloy, both employees of UNM at the time of invention, in 2008.

Filing Lawsuits

The STC was also successful in procuring a certificate of correction from the PTO to make the ‘998 patent a CIP of the ‘321 patent. STC claimed sole ownership of the ‘998 patent and licensed and asserted the patent without Sandia Corp. In 2010, STC through its patent attorneys filed a suit asserting the ‘998 patent against Intel without naming Sandia Corp. as a co-plaintiff.

Intel’s patent lawyers declared that under the terms of the terminal disclaimer, STC did not have the right to enforce the ‘998 patent. The disclaimer required identical ownership of both the ‘998 and ‘321 patents. The STC responded by stating that Sandia co-owned the ‘998 patent either from UNM assigning Draper’s interest to Sandia Corp. or by formal designation of the ‘998 patent as a CIP of the ‘321 patent.

The district court ruled that Sandia was not a co-owner of the ‘998 patent with UNM or STC prior to the December 2011 assignment. Given Sandia’s co-ownership prior to 2011, and its absence from the case, Intel and STC cross-moved on the issue of standing. However, Sandia refused to join the case, and the district court ruled in favor of Intel’s motion, citing a lack of standing and dismissed STC’s suit.

Sandia Says No

The STC went ahead and filed an appeal with the US Court of Appeals for the Federal Circuit. However, the Court rejected STC’s argument and found that although there are instances where the rule against involuntary joiner of a patent owner or co-owner can be surpassed, neither were applicable in the concerned case. Since the STC could not maintain its suit without Sandia, who affirmatively and consistently retained the right to refuse to join the suit, the Court declined to address the appeal concerning the ‘998 patent.