By Matthew Osborne
Standing can be a tricky issue in situations where affiliated
corporate entities assign and cross-license patents amongst themselves.
In Pfizer, Inc., v. Teva Pharmaceuticals USA, Inc., Case No. 2:10cv128, 2011 U.S. Dist. LEXIS 90021 (E.D.Va. Aug. 12, 2011) [enhanced version available to lexis.com subscribers],
Judge Smith weighed-in on two interesting scenarios:
trustee-beneficiary patent ownership and exclusive licenses with
Before delving into the facts of Pfizer's multiplicity of corporate
entities and transfers of patent rights therebetween, Judge Smith
broadly covered the categories of plaintiffs that have standing in suits
of patent infringement, along with their respective remedies, as set
out by the CAFC:
In a rather interesting contractual
maneuver, dubbed the "Patent Filing Agreement," Pfizer, Ltd. developed
technology to be pursued before the USPTO under the control of affiliate
Pfizer, Inc. The arrangement assigned all Pfizer, Ltd. invention rights
to Pfizer, Inc., to be held "in trust" for beneficiary, Pfizer, Ltd.
The ability to grant licenses in issued patents was retained by Pfizer,
Judge Smith held both Pfizer, Ltd. and Pfizer, Inc. to have standing as plaintiffs in the suit.
Regarding Pfizer, Inc., the Court found the Patent Filing Agreement to
clearly rest ownership of US patents in the hands of Pfizer, Inc. and,
accordingly, the ability to stand as sole plaintiff in litigation.
Regarding Pfizer, Ltd., the Court found the beneficiary relationship to the patent-in-suit, coupled with the right to grant licenses and enforce the patent, to independently give the beneficiary the ability of sole plaintiff standing in litigation.
Judge Smith further noted that a beneficiary would, at the very least,
be able to hold standing in tandem with the patent owner or in equity.
Exclusive Licensee (with Retained Rights)
The Court then turned to the complicated
case of subsidiary Pfizer Ireland Pharmaceuticals Unlimited Liability
Co. ("Pfizer Ireland"), also a party to the litigation. Pfizer Ireland
had received an exclusive license to the patent-in-suit though a series
of conveyances too complex to list here. With the chain of custody
blessed by the Court, Judge Smith turned to the terms of the exclusive
license, to determine whether it met the burden required for
co-plaintiff standing. In its examination of the license, the Court
After analysis, Pfizer Ireland was deemed a bare licensee for the purposes of standing.
The Court pointed to Pfizer, Ltd.'s retained "Right of Conversion,"
which allowed Pfizer, Ltd. to revoke exclusivity at a later date, and
Pfizer Ireland's lack of a primary right of enforcement in cutting
against a truly exclusive license.
Based on this analysis, Judge Smith
removed Pfizer Ireland from the suit, while keeping both Pfizer, Inc.
and Pfizer, Ltd. as co-plaintiffs.
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