Patent Co-owner's Refusal to Join Infringement Suit Trumps Involuntary Joinder Under Rule 19: Federal Circuit | Practical Law

Patent Co-owner's Refusal to Join Infringement Suit Trumps Involuntary Joinder Under Rule 19: Federal Circuit | Practical Law

In STC.UNM v. Intel Corp., the US Court of Appeals for the Federal Circuit held that a patent co-owner's right to refuse to join another co-owner's infringement suit is a substantive patent right that trumps the procedural rule for involuntary joinder under Federal Rule of Civil Procedure 19(a).

Patent Co-owner's Refusal to Join Infringement Suit Trumps Involuntary Joinder Under Rule 19: Federal Circuit

by Practical Law Intellectual Property & Technology
Published on 09 Jun 2014 • USA (National/Federal)
In STC.UNM v. Intel Corp., the US Court of Appeals for the Federal Circuit held that a patent co-owner's right to refuse to join another co-owner's infringement suit is a substantive patent right that trumps the procedural rule for involuntary joinder under Federal Rule of Civil Procedure 19(a).
On June 6, 2014, in STC.UNM v. Intel Corp., the US Court of Appeals for the Federal Circuit affirmed the US District Court for the District of New Mexico's decision to dismiss STC.UNM's patent infringement suit where STC failed to join patent co-owner Sandia Corp. (Case No. 2013-1241, (Fed. Cir. June 6, 2014)). The Federal Circuit held that the right of a patent co-owner to impede an infringement suit brought by another co-owner is a substantive right that trumps the procedural rule for involuntary joinder under Federal Rule of Civil Procedure (FRCP) 19(a).
On November 15, 2010, STC sued Intel Corp. for patent infringement. Sandia is a co-owner of the asserted patent through a series of assignments, but Sandia refused to join the case. Intel moved to dismiss the case for lack of standing on the basis that both patent co-owners must be parties to the case, and the district court granted the motion. STC appealed, arguing that the district court should have applied FRCP 19(a) to join Sandia as an involuntary plaintiff.
The Federal Circuit first cited its holding in Ethicon, Inc. v. U.S. Surgical Corp. that as a matter of substantive patent law, all co-owners must ordinarily consent to join as plaintiffs in an infringement suit (135 F.3d 1456 (Fed. Cir. 1998)). The Federal Circuit emphasized that rules of procedure, like FRCP 19(a), must give way to substantive patent rights.
The Federal Circuit affirmed the district court's dismissal of STC's case and held that the right of a patent co-owner to impede an infringement suit filed by another co-owner is a substantive right that trumps the procedural rule for involuntary joinder under FRCP 19(a). The court acknowledged the following two scenarios where involuntary joinder may apply:
  • Where a patent owner has granted an exclusive license, it may be joined in its licensee's infringement suit.
  • When, by agreement, a co-owner waives its right to refuse to join suit, his co-owners may later force him to join in a suit against infringers.
The court found that neither exception applied in this case and that STC did not argue for any additional exception that would allow Sandia to be joined as a plaintiff. The court therefore affirmed the district court's decision that STC lacked standing to maintain its infringement suit against Intel.
Judge Newman issued a dissenting opinion, arguing that the majority's opinion is contrary to law because it prevents a patent co-owner from exercising its right to enforce its patent and ignores the language of FRCP 19(a) requiring courts to join necessary parties.
Update: On September 17, 2014, a split Federal Circuit denied panel rehearing and rehearing en banc (No. 2013-1241, ).
Update: On March 30, 2015, the US Supreme Court denied a petition for certiorari filed by STC ( (Mar. 30, 2015)).