United States District Court, N.D. Illinois, Eastern Division
December 19, 2005.
THE CHAMBERLAIN GROUP, INC., and JOHNSON CONTROLS INTERIORS LLC, Plaintiffs,
LEAR CORPORATION, and FORD MOTOR COMPANY, Defendants.
The opinion of the court was delivered by: JAMES MORAN, Senior District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff, as patentee, has sued for infringement. Johnson
Controls Interior LLC (JCI) has joined as a plaintiff, and
defendant Lear Corporation (Lear) has moved to dismiss JCI for
lack of standing. That motion is denied.
The Federal Circuit, viewing standing as a prudential concern,
has developed three separate scenarios of licensee standing. In
one, when all substantial rights are assigned, including an
unrestricted right to sue for infringement, the exclusive
licensee is deemed the effective patentee and may sue without
joining that patentee. Prima Tek II, L.L.C. v. A-Roo Co.,
222 F.3d 1372, 1377 (Fed. Cir. 2000). In another, the licensee,
generally an exclusive licensee, has fewer than all substantial
rights. It may sue for infringement only if it brings in the
patentee as an indispensable party. But when the patentee has
given no express or implied promise to exclude others and the
licensee has only a "bare" license, it has no standing to sue
even if it joins the patentee. Rite-Hite Corp. v. Kelley Co.,
Inc., 56 F.3d 1538, 1552-53 (Fed. Cir. 1995).
The JCI license agreement purports to grant an exclusive
license in the Licensed Field of Use. If the patentee decides to
issue a license outside the Licensed Field of Use, JCI has a right of first refusal. A royalty rate adjustment is to be made
if the patentee grants a license to another after the JCI license
term expires or the license becomes non-exclusive because of a
judicial determination or a settlement, or by governmental
action. The patentee has the obligation to initiate infringement
actions and, if it fails to do so and if the infringement exceeds
50,000 units per year, JCI has the right to file suit.
Emphasizing the provision that the patentee may grant a license
to settle a lawsuit, Lear contends that JCI is a "bare" licensee.
We disagree. We are not at all sure that the patentee could issue
a license to settle a lawsuit if doing so would be unreasonable
in light of JCI's exclusive license. In any event, at the present
time JCI has an exclusive license all others are excluded.
While it has fewer than all substantial rights, it has enough to
join in a suit by the patentee. Its rights extend beyond those
held by the licensee in Abbott Laboratories v. Diamedix Corp.,
47 F.3d 1128, 1132-33 (Fed. Cir. 1995), which were subject to
some prior non-exclusive licenses, and to manufacture and sale by
the patentee, and in Intellectual Property Development, Inc. v.
TCI Cablevision of California, Inc., 248 F.3d 1333 (Fed. Cir.
2001) (IPD), which were subject to a prior non-exclusive
IPD turned, for instruction, to Lujan v. Defenders of
Wildlife, 504 U.S. 555 (1992). The Lujan factors are also
present here. JCI has an exclusive license and it will suffer an
injury in fact of a legally-protected interest that is concrete
and particularized and also actual if another infringes. There is
a casual connection between any infringement and injury. And that
injury can be redressed by a favorable decision.
Plaintiffs also seek to amend the protective order, but we
think that should be addressed by the parties directly now that
the status of JCI has been determined. We recognize that
discovery can be complicated by the competitive status of the
parties, but infringement actions are generally between competitors, and the
management of the case takes that into consideration.
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