Propat v. RPost (Fed. Cir. 2006).
Standing: Only a "patentee" has standing to sue for patent infringement. In order to qualify as a "patentee" the plaintiff must possess "all substantial rights in the patent."
Propat sued RPost for patent infringement. The district court, however, dismissed the case for lack of standing — finding that Propat was merely a licensee and not in possession of sufficient patent. Propat appealed.
By its plain terms, the Propat’s license gives the company rights to initiate and enforce license agreements and to sue infringers. Prior to any lawsuits, however, Propat must "consult and obtain prior approval" from the superior interest-holder. The license can also be terminated for breach or other reasons. In addition, the license forbids transfer of Propat’s rights.
Based on the license agreement, the appellate panel agreed that Propat did not have sufficient rights to bring suit. The court pointed to several elements of the license in its decision:
- An express provision retaining ownership in the superior interest-holder;
- Superior party was required to pay any maintenance fees;
- Superior party continued to enjoy some control over the use of the patent; and
- Superior party held a right to terminate the license under certain circumstances.
In addition, the court reaffirmed that a "right to sue" clause in a license does not actually entitle the licensee to sue.