ARTICLE
13 May 2015

Patent Licensee's Standing To Sue For Infringement

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Field LLP

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Field Law is a western and northern regional business law firm with offices in Calgary and Edmonton, Alberta and Yellowknife, Northwest Territories. The Firm has been proactively serving clients and providing legal counsel for over 100 years supporting the specific and ever-evolving business needs of regional, national and international clients.
Although you might not think so, given the proliferation of litigation, courts are actually very particular about who can bring a lawsuit.
Canada Intellectual Property

Although you might not think so, given the proliferation of litigation, courts are actually very particular about who can bring a lawsuit. In order for a plaintiff to file a lawsuit, it must have 'standing' or put another way, "A court may exercise jurisdiction only if a plaintiff has standing to sue on the date it files suit." A recent US case examined when a patent licensee has standing to sue for patent infringement.

According to the US court in Luminara Worldwide, LLC v. Liown Electronics Co.: Even if the patent holder does not transfer formal legal title, the patent holder may effect a transfer of ownership for the purposes of standing in a lawsuit if it conveys "all substantial rights in the patent to the transferee." One of those "substantial rights" must include an "exclusive license" to practice the patent in question. In the event that a licensee obtains an exclusive license and all substantial rights, then the licensee is effectively treated just like a patent owner, and has standing to sue for infringement in its own name.

When negotiating patent licenses, ensure that you pay attention to the grant of rights. Do you intend to grant rights to permit the licensee to sue in its own name, or should that right be reserved to the patent owner / licensor?

In Canada, compare the finding of the Federal Court in the copyright context in Milliken & Co. v. Interface Flooring Systems (Canada) Inc.(FC): "A non-exclusive licensee does not derive any right, title or interest in the copyright that could give it the standing to sue. It has no right to sue alone in a copyright infringement action."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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