United States District Court, E.D. Texas, Marshall Division
MEMORANDUM OPINION AND ORDER
WILLIAM C. BRYSON, UNITED STATES JUDGE CIRCUIT
the Court is Defendant Level 3 Communications, LLC's
Motion to Dismiss for Lack of Standing, Dkt. No. 177.
The motion is DENIED.
Communications, LLC (“Level 3”), seeks dismissal
of the complaint against it on the ground that plaintiff
Sycamore IP Holdings LLC (“Sycamore IP”) is
merely a co-owner of asserted U.S. Patent No. 6, 952, 405
(“the '405 patent”) and cannot bring this
action without joining the other co-owner. According to Level
3, the other co-owner of the '405 patent is the Hong Kong
University of Science and Technology (“HKUST” or
“the University”). Because HKUST has not joined
the action as a co-plaintiff, Level 3 contends that Sycamore
IP lacks standing to bring this action on its own and that
the action should therefore be dismissed. In the alternative,
Level 3 makes the related claim that the action should be
dismissed under Rule 19 of the Federal Rules of Civil
Procedure because of Sycamore IP's failure to join HKUST
as an indispensable party.
other defendants in this consolidated action have not joined
Level 3's motion. Moreover, HKUST has not taken a
position with respect to the issue of patent ownership, and
the record does not reflect that HKUST has ever asserted any
claim of an ownership interest in the '405 patent.
281 of the Patent Act, 35 U.S.C. § 281, provides that
“a patentee shall have remedy by civil action for
infringement of his patent.” That provision has been
construed to require that any entity with an ownership
interest in a patent must be joined in any infringement suit
brought by another co-owner. Prima Tek II, L.L.C. v.
A-Roo Co., 222 F.3d 1372, 1376-77 (Fed. Cir. 2000). The
Federal Circuit sometimes refers to that doctrine as the
“prudential standing” requirement, see WiAV
Solutions LLC v. Motorola, Inc., 631 F.3d 1257, 1265
& n.1 (Fed. Cir. 2010), or as “standing as defined
by § 281 of the Patent Act, ” see Alps S., LLC
v. Ohio Willow Wood Co., 787 F.3d 1379, 1382 (Fed. Cir.
2015). As applied to a case such as this one, the doctrine of
prudential standing is based on the principle that each
co-inventor “presumptively owns a pro rata undivided
interest in the entire patent.” Ethicon, Inc. v.
U.S. Surgical Corp., 135 F.3d 1456, 1460 (Fed. Cir.
1998) (footnote omitted). For that reason, all of the
co-owners of a patent must be joined in any action brought
for infringement of the patent. Israel Bio-Eng'g
Project v. Amgen Inc., 401 F.3d 1299, 1304-05 (Fed. Cir.
The factual basis for Level 3's theory of lack of
prudential standing is as follows: The two named co-inventors
of the '405 patent are Dr. Danny Tsang and Dr. Murat
Azizoglu. They assigned their interests in the patent to
Sycamore Networks. Sycamore Networks then assigned the patent
to Dragon Intellectual Property, LLC, through which it was
ultimately assigned to the plaintiff, Sycamore IP. There is
no dispute that Dr. Azizoglu was a co-owner of the patent and
therefore had an interest that could be conveyed to Sycamore
Networks and ultimately to Sycamore IP. With respect to Dr.
Tsang's interest in the patent, however, the matter is
argues that Dr. Tsang, as a faculty member at HKUST, was
bound by the University's Patent Policy, Dkt. No. 177-10
(“Patent Policy”), and that the effect of the
Patent Policy was to make his interest in the patent the
property of HKUST. Sycamore IP responds that Dr. Tsang was on
University-approved unpaid sabbatical leave at the time he
conceived of the invention and applied for the patent, and
that Dr. Tsang's contribution to the invention was the
product of his individual efforts during the course of his
work for Sycamore Networks. Under HKUST's Patent Policy,
according to Sycamore IP, Dr. Tsang's invention was not
considered to have been made in the course of his University
employment, and as a result, HKUST had no proprietary
interest in the resulting patent.
the parties have submitted lengthy briefs on this issue, the
Court regards the issue as turning on a straightforward
reading of the HKUST's Patent Policy. The relevant
portions of the Patent Policy read as follows:
1.4 Policy Applicability to Faculty, Staff and Students For
the purpose of application of the Patent Policy of the Hong
Kong University of Science and Technology, the term
“Members of the University” is defined to include
all part-time and full-time members of the faculty and staff
and all other agents, employees, students, and fellows of the
University. Subject to restrictions imposed by contracts with
sponsoring organizations, the University shall have the sole
right to determine the disposition of all inventions by the
Members resulting from their employment or use of facilities
administered by the University. . . .
1.5 Assignment of Rights
All Members of the University as defined above shall, as a
condition of employment with the University, assign all
rights, title, and interest, to the extent prescribed in this
policy, in any invention as defined herein to the University.
. . .
The University has vested the sole right to hold and, to
transfer, the ownership of all intellectual properties (which
term includes inventions and patents) generated by its
faculty, students and employees in the Hong Kong University