Appellants appealed from decision of United States District Court for the Central District of California dismissing appellant’s patent infringement action for lack of standing on the district court’s finding that appellants did not own the patent. The Federal Circuit reversed, finding proper ownership and standing. The Federal Circuit also remanded to determine whether all necessary parties were joined. 
| The primary issue in this patent litigation was whether the appellant, the original assignee of the patent in suit, had transferred all substantial ownership rights in the patent to a third party, or merely granted a license to the third party. If the former, the appellant was divested of ownership and standing to sue. If the latter, ownership and standing still existed. The agreement granted to the third party (1) the exclusive right to make, use, and sell patented products, (2) the right to sue for infringement and collect damages, and (3) authority to sublicense its rights. But the agreement also limited the term of the grant to a definite period with a fixed termination date, following which the rights would revert to the appellant. The Federal Circuit began with the proposition that “[t]o determine whether an agreement to transfer rights to a patent at issue amounts to an assignment or a license, we must ascertain the intention of the parties and examine the substance of what was granted.” The court recounted the “all substantial rights” standard employed in previous ownership/standing cases. At bottom, the court’s key question was “who owns the patent? Does the transfer or retention of certain rights amount to an assignment of the patent or not?” Looking to the substance of the agreement, the Federal Circuit found no transfer of ownership. The grant of exclusive rights, especially the rights to sue and sublicense, strongly weighed toward assignment. But, ultimately, there was no transfer primarily because the agreement limited the grant term to a definite period, to terminate on a specified date at which rights would revert to the appellant. “By having rights for only a limited portion of the patent term," the court explained, "it [the third party] simply did not own the patent. It was merely an exclusive licensee without all substantial rights.” The agreement was a license, not an assignment that would negate standing. Due to a dispute as to which of two parties was an exclusive licensee at the time appellant filed the infringement complaint, the case was remanded to the district court for analysis of which party should be joined as a necessary party to the action. Vacated and remanded. |