AngleFix, LLC v. Wright Medical Technology, Inc.

Filing 169

ORDER granting in part and denying in part 130 Sealed Motion. Signed by Judge Jon Phipps McCalla on 6/27/2016. (McCalla, Jon)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
ANGLEFIX, LLC,
Plaintiff,
v.
WRIGHT MEDICAL TECHNOLOGY, INC.,
Defendant.

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No. 2:13-cv-02407-JPM-tmp

ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

Before the Court is Defendant Wright Medical Technology
Inc.’s (“Defendant”) Motion for Summary Judgment for Lack of
Standing (ECF No. 130), filed April 25, 2016.

For the reasons

stated below, Defendant’s Motion for Summary Judgment is GRANTED
IN PART and DENIED IN PART.
I.

PROCEDURAL BACKGROUND
The relevant procedural history prior to the instant motion

is provided in the Court’s claim construction order, entered on
December 30, 2015.

(ECF No. 93 at 2-5.)

On April 25, 2016, Defendant Wright Medical Technology,
Inc. filed the instant motion for summary judgment for lack of
standing.

(ECF No. 130.)

Plaintiff AngleFix, LLC (“AngleFix”

or “Plaintiff”) responded in opposition on May 11, 2016.
No. 146.)

Defendant filed a reply brief on May 31, 2016.

(ECF
(ECF

No. 153.)

The Court held a motion hearing on June 21, 2016.

(Min. Entry, ECF No. 164.)
Plaintiff filed a motion for summary judgment of
infringement on May 23, 2016.

(ECF No. 150.)

On May 31, 2016,

Defendant filed a motion to strike the expert reports of Matthew
Davies and preclude Davies from offering expert testimony.
No. 154.)

(ECF

On the same day, Defendant filed a motion for summary

judgment of invalidity and a motion for summary judgment of
non-infringement.

(ECF Nos. 155, 157.)

These motions are not

yet ripe.
II.

UNDISPUTED MATERIAL FACTS
The following material facts are undisputed for the

purposes of the instant motion. 1
A.

The ’677 Patent

The patent-in-suit is U.S. Patent No. 6,955,677 (“the ’677
Patent”), which issued on October 18, 2005, and is entitled
“Multi-angular fastening apparatus and method for surgical bone

1

Defendant filed its statement of undisputed material facts (“SUF”) on
April 25, 2016. (ECF No. 131.) Plaintiff did not respond, and the time in
which to do so has expired. See LR 56.1(b); see also LR 56.1(d) (“Failure to
respond to a moving party’s statement of material facts . . . within [28 days
after the motion is served] shall indicate that the asserted facts are not
disputed for purposes of summary judgment.”).
Defendant asserts in its reply brief that Plaintiff’s failure to submit
a statement of additional facts while asserting additional facts in exhibits
attached to its response should, under the Local Rules preclude the Court
from considering additional facts stated in Plaintiff’s response. (ECF No.
153 at 3.) The Court, for the sake of a complete record and understanding of
the pertinent facts, will consider any additional facts presented in
Plaintiff’s response, but instructs both parties to ensure that future
filings are in compliance with the Local Rules.

2

screw/plate systems.”

(’677 Patent at PageID 3743, ECF No.

130-3; Statement of Undisputed Facts (“SUF”) ¶ 1, ECF No. 131.)
On December 11, 2002, the University of North Carolina at Chapel
Hill (“UNC”) purportedly obtained by assignment all rights,
title, and interests in the ’677 Patent from the named inventor,
Laurence E. Dahners.

(See ECF No. 130-4; SUF ¶ 2; see also ’677

Patent at PageID 3743.)
B.

The Licensing Agreement

On March 9, 2006, UNC and Plaintiff entered into a License
Agreement (the “Original License”).

(ECF No. 130-6; SUF ¶ 5.)

Plaintiff and UNC amended the Original License by Amendment #1
on March 8, 2007.

(ECF No. 130-7; SUF ¶ 5.)

Sometime in late

2008, 2 UNC and Plaintiff entered into an Amended and Restated
License Agreement (the “Amended License”), which superseded the
Original License.
¶ 6.)

(Amended License at 1, ECF No. 130-8; SUF

On March 24, 2010, UNC and Plaintiff amended the Amended

License, by an Amendment to Exclusive License Agreement.

(ECF

No. 130-9 (naming an entity as a sublicensee of Plaintiff); SUF
¶ 7.)
The Amended License permits Plaintiff “to make, have made,
use, offer for sale, sell, and import LICENSED PRODUCTS in the
2
While the first paragraph of the Amended License did not include an
“effective date” in November 2008 (see ECF No. 130-8 at 1), the Amended
License was signed by UNC’s Director of the Office of Technology Development,
Catherine Innes, on November 24, 2008, and by Plaintiff’s president, Michael
Shinsheimer, on December 12, 2008 (see id. at 18).

3

LICENSED FIELD.”

(Amended License ¶ 2.2; SUF ¶ 23.)

The term

“LICENSED FIELD” refers only to “the practice and
commercialization of any of the INVENTIONS for orthopedic and
craniomaxillofacial purposes.”
¶ 24.)

(Amended License ¶ 1.3; SUF

The term “INVENTIONS” describes the multi-angular

system, the screw locking system, and the lag tool system,
individually or collectively.
PageID 3804; SUF ¶ 25.)

(Amended License ¶ 1.10; id. at

UNC reserves the right to make use of

the licensed products for non-commercial purposes.
License ¶ 2.3; SUF ¶ 26.)

(Amended

Plaintiff may sublicense any or all

of its rights in the ’677 Patent, except the right to sublicense
further those rights, unless UNC provides written consent.
(Amended License ¶ 5.1; SUF ¶¶ 27-28.)
Under the Amended License, Plaintiff has the primary right
to institute an infringement action against a third-party
infringer.

(Amended License ¶ 8.2; SUF ¶ 34.)

Any voluntary

disposition of an infringement action, including settlement or
consent judgment, requires UNC’s approval, which shall not be
unreasonably withheld.

(Amended License ¶ 8.2; SUF ¶ 34.)

UNC

has rights to owed royalties on lost profits damages recovered
from a third-party infringer and to 20% of any reasonable
royalty awarded.

(Amended License ¶ 8.2; SUF ¶ 34.)

If

Plaintiff chooses not to pursue litigation against a third-party
infringer, it must notify UNC within sixty days of receiving

4

notice of the infringement, and UNC may then defend or enforce
the patent itself.

(Amended License ¶ 8.3; SUF ¶ 34.)

Plaintiff may not assign the Amended License to any other person
or entity without UNC’s consent, which shall not be unreasonably
withheld.

(Amended License ¶ 11.2; SUF ¶ 33.)

The Amended License states that Plaintiff “shall use
commercially reasonable efforts” to bring licensed products to
market and to meet certain deadlines, including a March 1, 2009,
deadline to begin animal testing and a March 1, 2010, deadline
to begin human testing of a licensed product.
License ¶ 3.12; SUF ¶ 9.)

(See Amended

As of January 27, 2016, the date

Defendant deposed Plaintiff’s president, Michael Shinsheimer,
Plaintiff had not conducted animal or human testing of a
licensed product.
SUF ¶ 10.)

(Shinsheimer Dep. 53:13-54:5, ECF No. 130-10;

Neither Plaintiff nor any sublicensee of Plaintiff

has brought to market any products practicing the patent rights
under the Amended License (see Amended License ¶ 1.7), including
those of the ’677 Patent.

(Shinsheimer Dep. 106:25-107:6,

239:14-240:5; SUF ¶ 11.)
The Amended License states that, until Plaintiff sells a
licensed product, Plaintiff shall submit a biannual report to
UNC that describes Plaintiff’s efforts to commercialize the
licensed product.

(Amended License ¶ 4.1; SUF ¶ 13.)

Plaintiff

did not submit reports as required by the Amended License.

5

(Shinsheimer Dep. 110:4-12, 143:12-22; SUF ¶ 14; see also ECF
No. 130-11.)
The Amended License also states that Plaintiff shall make
minimum royalty payments if the amount payable to UNC, based on
sales and royalty income, does not meet the minimum royalty
amount.

(Amendment to Exclusive License Agreement ¶ 2, ECF No.

130-9; SUF ¶ 15.)
payments to UNC.

Plaintiff has not made any minimum royalty
(Shinsheimer Dep. 138:21-140:18; Quay Dep.

93:25-94:6, ECF No. 130-5; SUF ¶ 16.)
A material breach of the Amended License includes, but is
not limited to: “the failure to deliver . . . any accrued
royalty or other accrued payment at the time or times the same
should be due . . . , [and] failure to provide reports as
specified in Section 4.1.”

(Amended License ¶ 6.2; SUF ¶ 22.)

If Plaintiff fails to cure any material breach of the Amended
License within sixty days of receipt of written notice by UNC,
the Amended License shall automatically terminate.

(Amended

License ¶ 6.2; SUF ¶ 2.2.)
III. LEGAL STANDARD
“The court shall grant summary judgment if the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”

Fed. R.

Civ. P. 56(a); accord Haddad v. Alexander, Zelmanski, Danner &
Fioritto, PLLC, 758 F.3d 777, 781 (6th Cir. 2014) (per curiam).

6

“A genuine dispute of material facts exists if ‘there is
sufficient evidence favoring the nonmoving party for a jury to
return a verdict for that party.’”

Am. Copper & Brass, Inc. v.

Lake City Indus. Prods., Inc., 757 F.3d 540, 543-44 (6th Cir.
2014) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
249 (1986)).
“The moving party bears the initial burden of demonstrating
the absence of any genuine issue of material fact.”

Mosholder

v. Barnhardt, 679 F.3d 443, 448 (6th Cir. 2012) (citing Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986)).

“In considering a

motion for summary judgment, [the] court construes all
reasonable inferences in favor of the nonmoving party.”
Robertson v. Lucas, 753 F.3d 606, 614 (6th Cir. 2014) (citing
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
587 (1986)).
“Once the moving party satisfies its initial burden, the
burden shifts to the nonmoving party to set forth specific facts
showing a triable issue of material fact.”

Mosholder, 679 F.3d

at 448-49 (citing Matsushita, 475 U.S. at 587; Fed. R. Civ.
P. 56(e)).

“When the non-moving party fails to make a

sufficient showing of an essential element of his case on which
he bears the burden of proof, the moving parties are entitled to
judgment as a matter of law and summary judgment is proper.”
Martinez v. Cracker Barrel Old Country Store, Inc., 703 F.3d

7

911, 914 (6th Cir. 2013) (quoting Chapman v. UAW Local 1005, 670
F.3d 677, 680 (6th Cir. 2012) (en banc)).
To show that a fact is, or is not, genuinely disputed,
both parties are required to either “cite[] to
particular parts of materials in the record” or
“show[] that the materials cited do not establish the
absence or presence of a genuine dispute, or that an
adverse party cannot produce admissible evidence to
support the fact.”
Bruederle v. Louisville Metro Gov’t, 687 F.3d 771, 776 (6th Cir.
2012) (alterations in original) (quoting Fed. R. Civ. P.
56(c)(1)), cert. denied, 133 S. Ct. 866 (2013).
“The court need consider only the cited materials, but it
may consider other materials in the record.”

Fed. R. Civ.

P. 56(c)(3); see also Pharos Capital Partners, L.P. v. Deloitte
& Touche, 535 F. App’x 522, 523 (6th Cir. 2013) (per curiam)
(acknowledging that a district court has no duty to search
entire record to establish grounds for summary judgment).
IV.

ANALYSIS
In the instant motion, Defendant asserts that Plaintiff has

neither constitutional nor prudential standing to bring the
instant suit.

(ECF No. 130-1 at 14-24.)

Defendant asserts that

Plaintiff, having breached the Amended License, holds only a
“bare license” and thus lacks constitutional standing to sue.
(Id. at 14-17.)

Defendant further asserts that Plaintiff does

not have “all substantial rights” in the ’677 Patent such that
it would be able to establish prudential standing.

8

(Id. at

17-24.)

Plaintiff argues that it has not materially breached

the Amended License (ECF No. 146 at 2-6), and that it has both
constitutional and prudential standing (id. at 10-23).

The

Court finds that Defendant is not entitled to summary judgment
for lack of constitutional standing because there are genuine
issues of material fact as to whether Plaintiff has materially
breached the Amended License.

The Court also finds that

Defendant is entitled to summary judgment for lack of prudential
standing because there is no genuine issue of material fact that
Plaintiff does not have all substantial rights in the ’677
Patent and cannot bring this suit without joining UNC.
A.

Constitutional Standing

A party has constitutional standing if it can show that it
“(1) suffered an injury in fact, (2) that is fairly traceable to
the challenged conduct of the defendant, and (3) that is likely
to be redressed by a favorable judicial decision.”

Spokeo, Inc.

v. Robins, 136 S. Ct. 1540, 1547 (2016) (citing Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)).

A

plaintiff bears the burden of establishing the elements of
constitutional standing.

Id.

“In an action for patent

infringement, ‘[t]he party [that] hold[s] the exclusionary
rights to the patent suffers legal injury in fact under the
statute.’”

MHL TEK, LLC v. Nissan Motor Co., 655 F.3d 1266,

1274 (Fed. Cir. 2011) (first alteration in original) (quoting

9

Morrow v. Microsoft Corp., 499 F.3d 1332, 1339 (Fed. Cir.
2007)); see also WiAV Sols. LLC v. Motorola, Inc., 631 F.3d
1257, 1264-65 (Fed. Cir. 2010) (“a party holding one or more . .
. exclusionary rights . . . suffers a legally cognizable injury
when an unauthorized party encroaches upon those rights and
therefore has standing to sue”).
Defendant asserts that Plaintiff lacks constitutional
standing because Plaintiff cannot have suffered an injury in
fact when it materially breached the Amended License by failing
to meet certain deadlines and requirements.
14-17.)

(ECF No. 130-1 at

Plaintiff argues that, because neither it nor UNC has

stated that there was a material breach of the Amended License,
it still holds at least one exclusionary right in the ’677
Patent, and therefore has constitutional standing.

The Court

finds that a genuine dispute of material fact exists as to
whether a material breach of the Amended License exists; thus,
Defendant is not entitled to summary judgment for lack of
constitutional standing.
1.

Exclusionary Rights

Exclusionary rights under the Patent Act include the right
to prevent others from practicing the invention.
at 1264-65.

WiAV, 631 F.3d

A plaintiff need not have all exclusionary rights

to establish constitutional standing.

Id. at 1265 (“the

touchstone of constitutional standing in a patent infringement

10

suit is whether a party can establish that it has an
exclusionary right in a patent.” (emphasis added)).
According to the Amended License, Plaintiff holds at least
one exclusionary right in the ’677 Patent.

(See Amended License

¶ 2.2, ECF No. 130-8 (granting Plaintiff an exclusive license
“to make, have made, use, offer for sale, sell and import
LICENSED PRODUCTS in the LICENSED FIELD”).)

The limitation on

Plaintiff’s exclusive license to the licensed field is not fatal
to Plaintiff’s constitutional standing argument.

See WiAV, 631

F.3d at 1266 (“there [is no] indication that the [Federal
Circuit] created a bright-line rule [in Textile Prods., Inc. v.
Mead Corp., 134 F.3d 1481 (Fed. Cir. 1998)] that a party cannot
be an exclusive licensee of a patent if others have the right to
license the patent”); Textile Prods., 134 F.3d at 1484 (“To
qualify as an exclusive license, an agreement must clearly
manifest the patentee’s promise to refrain from granting to
anyone else a license in the area of exclusivity.” (emphasis
added)).

Thus, having found that the Amended License conferred

at least one exclusionary right on Plaintiff that would be
sufficient to establish constitutional standing, the Court next
considers whether Plaintiff materially breached the Amended
License such that it can no longer enforce its patent rights.

11

2.

Breach of Contract

The parties do not dispute that Plaintiff has not complied
with the terms of the Amended License.
13-16.)

(See SUF ¶¶ 9-11,

Both Plaintiff and UNC assert, however, that Plaintiff

has not materially breached the Amended License.
146 at 2-6.)

(See ECF No.

Jacqueline Quay, the Director of Licensing and

Innovation Support at UNC, stated in her affidavit that
Plaintiff “is not in material breach of any Agreement with UNC”
and that “all previous potential and actual breaches, if any”
have been resolved.

(Quay Aff. ¶¶ 1, 3-4, ECF No. 146-3.)

The

Amended License also includes a provision that indicates UNC and
Plaintiff may waive breaches.

(See Amended License ¶ 11.3.)

Defendant argues that Quay’s statements “do not demonstrate
a triable issue of fact as to” a material breach of the Amended
License and serve only to support Defendant’s position that UNC
has merely forbore the termination of the Amended License.
No. 153 at 4.)

(ECF

While Defendant asserts that Plaintiff is “in

constant and continuing jeopardy of termination” of the Amended
License (ECF No. 130-1 at 16), Quay stated that “UNC does not
intend to terminate any agreement between AngleFix and UNC
related to the ’677 Patent any time before expiration of the
patent.”

(Quay Aff. ¶ 5.)

Since UNC has not asserted a

material breach (id. ¶¶ 3-4), there is also no risk of automatic
termination of the Amended License.

12

(See Amended License ¶ 6.2

(“if LICENSEE should materially breach this LICENSE AGREEMENT
and fail to cure any such breach within sixty (60) days of
receipt of written notice from UNIVERSITY describing such
breach, then this LICENSE AGREEMENT shall automatically
terminate” (emphasis added)).)
Although the Amended License defines “material breach” to
include certain of Plaintiff’s failures, such as the failure to
provide biannual reports (see Amended License ¶ 6.2; SUF
¶¶ 13-14), there is a genuine dispute of material fact as to
whether an actual material breach of the Amended License exists,
as neither party to the contract has asserted one.

Defendant’s

reliance, therefore, on the reasoning in Cordis Corp. v.
Medtronic, Inc., 780 F.2d 991 (Fed. Cir. 1985), is tenuous.

As

a policy, the Federal Circuit found, “[i]t would not be fair for
the plaintiffs to be allowed simultaneously to reap all the
benefits of the licensing agreement and to deprive the licensor
of all his royalties.”

Cordis, 780 F.2d at 995 (quoting

Warner-Jenkinson Co. v. Allied Chem. Corp., 567 F.2d 184, 188
(2d Cir. 1977)).
In Cordis, the plaintiff-licensee itself asserted that its
licensing agreement with the defendant-patentee was void because
the licensed patents were invalid, yet also sought an injunction
to protect itself from litigation under the license agreement.
Id. at 993.

The Federal Circuit vacated the district court’s

13

granting of the injunction, finding that the plaintiff could
withhold royalty payments but could not then avoid the
consequences of doing so, such as being sued for infringement.
Id. at 995, 997.
In the instant case, both Plaintiff and UNC assert that
there is no breach of the Amended License and there do not
appear to be undesirable consequences arising from Plaintiff’s
failure to make royalty payments. 3
Thus, Defendant has not met its burden to establish the
absence of any genuine issue of material fact; the parties
dispute whether Plaintiff has materially breached the contract.
Accordingly, Defendant’s motion for summary judgment is DENIED
as to Plaintiff’s lack of constitutional standing.
B.

Prudential Standing

Constitutional standing alone is insufficient to bring a
claim for patent infringement; a plaintiff must also have
prudential standing as a patentee pursuant to 35 U.S.C. § 281.
Alps South, LLC v. Ohio Willow Wood Co., 787 F.3d 1379, 1382
(Fed. Cir. 2015).

The general rule governing prudential

standing in a patent case is that the patentee should be joined

3

It is unclear whether UNC has even been deprived of “all its
royalties.” Quay stated in her deposition that she believed that the
settlement of a previous litigation brought by Plaintiff consisted of
royalties, that Plaintiff had paid royalties, and that “[UNC] do[es]n’t
always have licensees paying ongoing royalties.” (Quay Dep. 163:16-19, ECF
No. 146-2.)

14

in any infringement suit brought by an exclusive licensee.
Prima Tek II L.L.C., v. A-Roo Co., 222 F.3d 1372, 1377 (Fed.
Cir. 2000).

“The Supreme Court has long recognized that an

exclusive licensee cannot sue for infringement without joining
the patent owner if the license grants merely ‘an undivided part
or share of th[e] exclusive right [granted under the patent].’”
Alps South, 787 F.3d at 1383-84 (alterations in original)
(quoting Waterman v. Mackenzie, 138 U.S. 252, 255 (1891))
(citing Pope Mfg. Co. v. Gormully & Jeffery Mfg. Co., 144 U.S.
248, 252 (1892)).
When an exclusive licensee has “all substantial rights”
under the patent, however, it can be considered an assignee, and
thus the effective patentee under 35 U.S.C. § 281, and bring the
infringement suit itself.

Int’l Gamco, Inc. v. Multimedia

Games, Inc., 504 F.3d 1273, 1276 (Fed. Cir. 2007) (citing Prima
Tek, 222 F.3d at 1377).

Rights a district court should

“examine[] to determine whether a licensor has transferred away
sufficient rights to render an exclusive licensee the owner of
patent” include:
transfer of the exclusive right to make, use, and sell
products or services under the patent . . . . , the
scope of the licensee's right to sublicense, the
nature of license provisions regarding the reversion
of rights to the licensor following breaches of the
license agreement, the right of the licensor to
receive a portion of the recovery in infringement
suits brought by the licensee, the duration of the
license rights granted to the licensee, the ability of

15

the licensor to supervise and control the licensee's
activities, the obligation of the licensor to continue
paying patent maintenance fees, and the nature of any
limits on the licensee's right to assign its interests
in the patent.
Alfred E. Mann Found. for Sci. Research v. Cochlear Corp., 604
F.3d 1354, 1360-61 (Fed. Cir. 2010) (citation omitted).
Defendant asserts that Plaintiff does not have “all
substantial rights” in the ’677 Patent because UNC’s retention
of certain rights significantly restricts Plaintiff’s rights.
(ECF No. 130-1 at 17-22.)

Plaintiff argues that, despite UNC’s

retention of limited rights, Plaintiff “has been granted
sufficient substantial rights from [UNC] which allow AngleFix to
proceed as the sole plaintiff in this case.”
17-23.)

(ECF No. 146 at 2,

The Court finds that there is no genuine dispute of

material fact that Plaintiff does not have all substantial
rights in the ’677 Patent and thus, that Plaintiff does not have
prudential standing.

Specifically, the Court finds that, to

establish prudential standing, Plaintiff must join UNC in the
suit because UNC transferred to Plaintiff only the exclusive
right to make, use, and sell products within the licensed field.
1.

“Field of Use” Limitation

As stated in the Amended License, Plaintiff is an exclusive
licensee “to make, have made, use, offer for sale, sell and
import LICENSED PRODUCTS in the LICENSED FIELD.”
License ¶ 2.2.)

(Amended

It is undisputed that the “LICENSED FIELD” is

16

limited to “the practice and commercialization of any of the
INVENTIONS for orthopedic and craniomaxillofacial purposes.”
(Amended License ¶ 1.3; SUF ¶ 24.)

Thus, like the patentee in

Alps South, UNC “retained the exclusive right to make, use, and
sell products covered by the [’677 Patent] in all areas outside”
the licensed field of orthopedic and craniomaxillofacial
products.

787 F.3d at 1383.

The Federal Circuit in Alps South

reiterated that “our standing jurisprudence ‘compels an
exclusive licensee with less than all substantial rights, such
as a field of use licensee, to join the patentee before
initiating suit.’”

Id. at 1384 (quoting Int’l Gamco, 504 F.3d

at 1278).
Plaintiff argues that it is only required to establish that
it has the right to exclude Defendant, and not all persons or
entities, from practicing the ’677 Patent.
(citing WiAV, 631 F.3d at 1267).)

(ECF No. 146 at 12

But see In’tl Gamco, 504 F.3d

at 1279 (“The Supreme Court emphasized that an assignment that
confers standing also excludes ‘all other persons, even the
patentee.’” (quoting Waterman, 138 U.S. at 256)).

In WiAV,

since the plaintiff had established prudential standing by
joining the patentee to the suit, see 631 F.3d at 1265 n.1,
whether the plaintiff needed to establish its right to exclude
all others from practicing the patent was a question to resolve
constitutional standing only.

See id. at 1267.

17

While this

Court follows the WiAV standard in its consideration of
constitutional standing, see supra Part IV.A.1, the standard
does not apply to analysis of prudential standing, particularly
in light of Alps South.
The prudential standing requirement to join a patentee when
an exclusive licensee with less than all substantial rights
brings suit alleviates the risk of multiple suits or
liabilities.

See Int’l Gamco, 504 F.3d at 1278.

Plaintiff

further argues that there is no risk of multiple suits and
multiple liabilities because UNC “is contractually and legally
bound by the decision in this case.”

(ECF No. 146 at 12-13.)

As Defendant notes in its reply, Plaintiff corroborates its
position that there is no such risk only by Quay’s affidavit
(see Quay Aff. ¶ 5), and no provision of the Amended License
appears to support the position.

(ECF No. 153 at 5-6.)

Accordingly, the Court finds that the facts are
insufficient to establish a genuine dispute as to Plaintiff’s
purported prudential standing. 4

Defendant’s motion for summary

4
Both parties also present arguments about other substantial rights
such as the right to bring infringement suits and the right to control
assignments and sublicensing. (See ECF No. 130-1 at 19-22; ECF No. 146 at
17-23.) The Court need not consider whether UNC transferred these other
rights to Plaintiff because it has determined that the exclusive right to
exclude was not transferred completely, see supra pp. 16-18, and Plaintiff’s
prudential standing depends on the transfer of all substantial rights,
including the right to exclude. See Prima Tek, 222 F.3d at 1379 (“In
evaluating whether a particular license agreement transfers all substantial
rights in a patent to the licensee, we pay particular attention to whether
(cont.)

18

judgment is GRANTED as to Plaintiff’s lack of prudential
standing.
2.

Joinder of UNC to Cure Defect in Standing

While a defect in constitutional standing cannot be cured
once a suit has begun, Paradise Creations, Inc. v. UV Sales,
Inc., 315 F.3d 1304, 1310 (Fed. Cir. 2003), joinder of UNC to
this suit can cure the defect in prudential standing.

See

Fieldturf, Inc. v. Sw. Recreational Indus., Inc., 357 F.3d 1266,
1269 (Fed. Cir. 2004) (“An exclusive licensee can cure a defect
in [prudential] standing by joining the patentee . . . .”).
“The appropriate way of bringing a joinder question . . . is by
motion.”

Mentor H/S, Inc. v. Medical Device All., Inc., 240

F.3d 1016, 1019 (Fed. Cir. 2001).

Therefore, to establish

prudential standing, Plaintiff shall file a motion to add UNC as
a co-plaintiff within thirty (30) days of the entry of this
order.

Defendant may respond within fourteen (14) days from the

filing of Plaintiff’s motion.

Because Plaintiff currently does

not have prudential standing, the Court hereby stays proceedings
in the instant case pending UNC’s joinder as co-plaintiff.
V.

CONCLUSION
For the reasons stated above, Defendant’s motion for

summary judgment for lack of constitutional standing is DENIED.

the agreement conveys in full the right to exclude others from making, using
and selling the patented invention in the exclusive territory.”).

19

Defendant’s motion for summary judgment for lack of prudential
standing is GRANTED.

Plaintiff must move to join UNC within

thirty (30) days of this order, up to and including July 27,
2016.

If Plaintiff fails to do so, the Court will dismiss the

instant case without prejudice. 5

The case is hereby STAYED until

UNC is joined as a co-plaintiff.
IT IS SO ORDERED, this 27th day of June, 2016.

/s/ Jon P. McCalla
JON P. McCALLA
UNITED STATES DISTRICT JUDGE

5

Under the law of the regional circuit, “the decision whether to
dismiss with or without prejudice is committed to the sound discretion of the
district court.” H.R. Techs., Inc. v. Astechnologies, Inc., 275 F.3d 1378,
1384 (Fed. Cir. 2002) (citing Grover by Grover v. Eli Lilly & Co., 33 F.3d
716, 718 (6th Cir. 1994)). “Ordinarily, dismissal for lack of standing is
without prejudice” unless it is “plainly unlikely” that the defect in
standing can be cured. Fieldturf, 357 F.3d at 1269 (citing H.R. Techs., 275
F.3d at 1385).

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