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ARTICLE · 04 JULY 2016

To Confer Standing, Assignment Must Transfer Entire Exclusive Right

When a defendant is confronted by a non-practicing entity suit where standing is alleged based on an agreement between it and the original patent owner, the agreement should be carefully analyzed...

United StatesIntellectual Property

Addressing the issue of standing, the US Court of Appeals for the Federal Circuit affirmed a district court’s dismissal of a patent case brought by an exclusive licensee, finding that the original assignee had not transferred all substantial rights to the patents-in-suit to the plaintiff, and thus the plaintiff alone did not have standing to sue. Diamond Coating Technologies, LLC v. Hyundai Motor America, et al., Case No. 15-1844 (Fed. Cir., May 17, 2016) (Wallach, J).

The patents-in-suit list Sanyo as the original assignee. Diamond Coating Technologies and Sanyo signed a “Patent Assignment and Transfer Agreement” whereby, among other things, (1) Diamond could not assign the agreement to another party without Sanyo’s consent; (2) Sanyo retained an economic interest in future proceeds, including any that arise from infringement litigation; (3) Sanyo retained a license to make, use and sell products covered by the patents-in-suit; and (4) Diamond must act in the best

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