Lone Star Silicon Innovations v. Nanya Technology Corporation

United States Court of Appeals
for the Federal Circuit
______________________
LONE STAR SILICON INNOVATIONS LLC,
Plaintiff-Appellant
v.
NANYA TECHNOLOGY CORPORATION, NANYA
TECHNOLOGY CORPORATION U.S.A., NANYA
TECHNOLOGY CORPORATION DELAWARE,
Defendants-Appellees
______________________
2018-1581
______________________
Appeal from the United States District Court for the
Northern District of California in No. 3:17-cv-04032-WHA,
Judge William H. Alsup.
--------------------------------------------
LONE STAR SILICON INNOVATIONS LLC,
Plaintiff-Appellant
v.
UNITED MICROELECTRONICS CORPORATION,
UMC GROUP (USA),
Defendants-Appellees
______________________
2018-1582
______________________
2 LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP.
Appeal from the United States District Court for the
Northern District of California in No. 3:17-cv-04033-WHA,
Judge William H. Alsup.
______________________
Decided: May 30, 2019
______________________
TIMOTHY P. MALONEY, Fitch, Even, Tabin & Flannery,
Chicago, IL, argued for plaintiff-appellant. Also repre-
sented by DAVID ALLEN GOSSE, NICOLE L. LITTLE, JOSEPH
F. MARINELLI.
PETER JAMES WIED, Nixon Peabody LLP, Los Angeles,
CA, argued for all defendants-appellees. Defendants-ap-
pellees Nanya Technology Corporation, Nanya Technology
Corporation U.S.A., Nanya Technology Corporation Dela-
ware also represented by VINCENT K. YIP.
CHRISTOPHER KAO, Pillsbury Winthrop Shaw Pittman
LLP, San Francisco, CA, for defendants-appellees United
Microelectronics Corporation, UMC Group (USA). Also
represented by BROCK STEVEN WEBER.
______________________
Before O’MALLEY, REYNA, and CHEN, Circuit Judges.
O’MALLEY, Circuit Judge.
LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP. 3
Lone Star Silicon Innovations LLC (“Lone Star”) sued
Appellees 1 for infringing various patents. 2 The district
court concluded that Lone Star does not own these patents
and therefore lacks the ability to assert them. In re Lone
Star Silicon Innovations LLC, No. 3:17-cv-03980-WHA,
2018 WL 500258, at *1 (N.D. Cal. Jan. 20, 2018). We agree
with the district court that Lone Star cannot assert these
patents on its own. But the district court should not have
dismissed this case without considering whether Advanced
Micro Devices, Inc. (“AMD”), the relevant patentee, should
have been joined. Its failure to address this issue was le-
gally erroneous in view of Federal Rule of Civil Procedure
19 and our case law. We therefore vacate the district court’s
dismissal and remand for further proceedings consistent
with this opinion.
I. BACKGROUND
A. The Patent Transfer Agreement
The asserted patents were originally assigned to AMD,
which later executed an agreement purporting to transfer
“all right, title and interest” in the patents to Lone Star.
The transfer agreement, however, imposes several limits
on Lone Star. For example, Lone Star agreed to only assert
the covered patents against “Unlicensed Third Party En-
tit[ies]” specifically listed in the agreement. J.A. 2025; J.A.
2032. New entities can only be added if Lone Star and
1 Appellees in these consolidated appeals include
Nanya Technology Corporation, Nanya Technology Corpo-
ration U.S.A., and Nanya Technology Corporation Dela-
ware (“Nanya”) and United Microelectronics Corporation
and UMC Group (USA) (“UMC”).
2 These include U.S. Patent Nos. 5,912,188;
6,023,085; 6,097,061; 6,388,330; RE39,518; 5,973,372;
6,153,933; 5,872,038; 6,103,611; 6,326,231; 6,380,588; and
6,046,089 (“the asserted patents”).
4 LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP.
AMD both agree to add them. J.A. 2025; J.A. 2048. If Lone
Star sues an unlisted entity, AMD has the right—without
Lone Star’s approval—to sublicense the covered patents to
the unlisted target. J.A. 2028; J.A. 2032. AMD can also
prevent Lone Star from assigning the patents or allowing
them to enter the public domain. J.A. 2026 (“Any assign-
ment of an Assigned Patent in violation of this Section 2.6
shall be void ab initio.”); J.A. 2027 (explaining that if Lone
Star intends to stop paying maintenance fees for a covered
patent it must “notify AMD of its decision” and “assign the
Abandoned Patent to AMD or to a Person selected by AMD
in AMD’s sole discretion if requested by AMD . . . .”). AMD
and its customers can also continue to practice the patents,
J.A. 2027, and AMD shares in any revenue Lone Star gen-
erates from the patents through “monetization efforts.”
J.A. 2029.
B. District Court Litigation
Lone Star sued Appellees, who are all listed as Unli-
censed Third Party Entities in the transfer agreement, in
successive infringement actions filed between Octo-
ber 2016 and December 2016. In each case, Lone Star al-
leged, among other things, that AMD transferred “all right,
title, and interest” in the asserted patents to Lone Star.
See, e.g., J.A. 2621. But it took Lone Star nearly a year af-
ter filing suit to produce the transfer agreement. Once it
did, Appellees filed motions to dismiss their respective
suits under Federal Rule of Civil Procedure 12(b)(1).
J.A. 3913 (Nanya); J.A. 351 (UMC).
The district court granted Appellees’ motions. 3 As the
district court correctly explained, we have recognized three
3 Because the district court did not consolidate these
cases below, it entered separate but identical orders as to
Nanya and UMC (as well as other defendants whose ap-
peals have been dismissed). For clarity, we will refer to a
LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP. 5
categories of plaintiffs in patent infringement cases. In re
Lone Star, 2018 WL 500258, at *3. First, a patentee, i.e.,
one with “all rights or all substantial rights” in a patent,
can sue in its own name. Id. Second, a licensee with “ex-
clusionary rights” can sue along with the patentee. Id.
And, finally, a licensee who lacks exclusionary rights has
no authority to assert a patent (even along with the pa-
tentee). Id. The district court concluded that it only
needed to address this first category “since Lone Star
claims to be an ‘assignee’ and ‘sole owner’ of the patents-in-
suit.” Id. As the district court acknowledged, however,
Lone Star had asked to join AMD so that, if Lone Star could
not proceed alone, it could proceed along with AMD.
Id. at *6.
In determining whether the agreement between AMD
and Lone Star transferred “all substantial rights” to the as-
serted patents, the district court examined the rights
transferred to Lone Star and those retained by AMD.
Id. at *3 (“Whether an agreement constitutes an assign-
ment or license depends not on the ‘labels’ or ‘bare formal-
ities’ of title transfer but on the ‘substance of what was
granted.’”). The district court focused on three aspects of
the transfer agreement in particular: (1) AMD’s ability to
control how Lone Star asserts or transfers the patents,
(2) Lone Star’s inability to practice the patents, and
(3) AMD’s right to share in “monetization efforts.” Id. at
*3–5. The district court then compared the balance of
rights here to previous cases where we have said agree-
ments did or did not transfer all substantial rights. Id. Ul-
timately, the district court concluded that AMD did not
transfer all substantial rights in the patents to Lone Star.
Id. at *6.
single order throughout. See In re Lone Star, 2018 WL
500258.
6 LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP.
After it concluded that Lone Star could not sue in its
own name, the district court dismissed the case. Id. And
although it acknowledged that Lone Star had asked to join
AMD, the district court concluded that doing so would “re-
ward Lone Star for its litigation gimmick and unfairly prej-
udice defendants.” Id. In particular, the district court
emphasized that if AMD were joined it “would enjoy earlier
filing dates for [its] claims than defendants would for any
counterclaims for purposes of recovering damages.” Id.
(citing 35 U.S.C. § 286).
Lone Star timely appealed. We have jurisdiction under
28 U.S.C. § 1295(a)(1).
II. DISCUSSION
Lone Star argues that it possesses all substantial
rights in the asserted patents and therefore can assert
them in its own name. And, if it cannot, Lone Star main-
tains that it must be given an opportunity to join AMD as
a plaintiff before this case is dismissed. Appellees argue
that Lone Star does not possess all substantial rights and
therefore lacks standing to bring suit and that the district
court did not err in refusing to consider Lone Star’s request
to join AMD. We address these arguments below.
A. All Substantial Rights
Title 35 allows a “patentee” to bring a civil action for
patent infringement. 35 U.S.C. § 281. The term patentee
includes the original patentee (whether the inventor or
original assignee) and “successors in title.” 35 U.S.C.
§ 100(d). But it does not include mere licensees. See Asym-
metRx, Inc. v. Biocare Med., LLC, 582 F.3d 1314, 1318–19
(Fed. Cir. 2009) (citing Indep. Wireless Tel. Co. v. Radio
Corp. of Am., 269 U.S. 459 (1926)).
If the party asserting infringement is not the patent’s
original patentee, “the critical determination regarding a
party’s ability to sue in its own name is whether an agree-
ment transferring patent rights to that party is, in effect,
LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP. 7
an assignment or a mere license.” Id. at 1319. In distin-
guishing between “an assignment” and a “mere license,” we
“examine whether the agreement transferred all substan-
tial rights to the patents.” Id. (internal quotation marks
omitted). This inquiry depends on the substance of what
was granted rather than formalities or magic words.
See Waterman v. Mackenzie, 138 U.S. 252, 256 (1891)
(“Whether a transfer of a particular right or interest under
a patent is an assignment or a license does not depend upon
the name by which it calls itself, but upon the legal effect
of its provisions.”). For example, in previous cases we have
reviewed how an agreement affected who could use, assert,
license, or transfer the covered patents. Alfred E. Mann
Found. For Sci. Research v. Cochlear Corp., 604 F.3d 1354,
1359 (Fed. Cir. 2010) (collecting cases). We have also con-
sidered whether the transferor retained reversionary
rights in or ongoing control over the patents. Id. at 1360–
61. But our ultimate task is not to tally the number of
rights retained against those transferred. See AsymmetRx,
582 F.3d at 1321. Instead, we examine the “totality” of the
agreement to determine whether a party other than the
original patentee has established that it obtained all sub-
stantial rights in the patent. Id.
If a party cannot bring suit in its own name, it may still
bring suit along with the patentee so long as it possesses
“exclusionary rights.” Morrow v. Microsoft Corp., 499 F.3d
1332, 1340 (Fed. Cir. 2007). In such a case, “the patentee
who transferred these exclusionary rights is usually
joined” according to Federal Rule of Civil Procedure 19. Id.
Against this backdrop, Lone Star asserts two reasons
why it believes it may sue in its own name. First, it argues
that the transfer agreement was a complete assignment be-
cause a single provision in the agreement conveyed “all
right, title and interest” in the patents to Lone Star.
J.A. 2025. Second, Lone Star argues that, even if we look
beyond this provision, the transfer agreement gave it all
substantial rights in the patents, at least with respect to
8 LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP.
these alleged infringers. The district court rejected both
arguments. We review the district court’s conclusions de
novo. Luminara Worldwide, LLC v. Liown Elecs. Co., 814
F.3d 1343, 1347 (Fed. Cir. 2016). We agree with the district
court that, while Lone Star was given a number of rights
in the transfer agreement, it was not given all substantial
rights in the asserted patents.
1. “All Right, Title and Interest”
Lone Star argues that our analysis begins and ends
with the transfer agreement’s broad conveyance of “all
right, title and interest” in the covered patents. J.A. 2025.
But, as the district court correctly recognized, the rest of
the agreement “substantially curtail[s] Lone Star’s rights.”
Lone Star, 2018 WL 500258 at *2. To say that this
amounts to an assignment because of the initial, broad
grant ignores the total effect of the agreement. Our analy-
sis in these types of cases has never been so reliant on la-
bels. See, e.g., Diamond Coating Techs., LLC v. Hyundai
Motor Am., 823 F.3d 615, 618 (Fed. Cir. 2016) (“We have
not . . . treat[ed] bare formalities of ‘title’ transfer as suffi-
cient to determine that an ‘assignment’ of the entire exclu-
sive right has occurred.”); A123 Sys., Inc. v. Hydro-Quebec,
626 F.3d 1213, 1218 (Fed. Cir. 2010) (“In determining own-
ership for purposes of standing, labels given by the parties
do not control. Rather, the court must determine whether
the party alleging effective ownership has in fact received
all substantial rights from the patent owner.”).
Lone Star’s reliance on Rude v. Westcott, 130 U.S. 152,
162-63 (1889), to support its argument is misplaced. Ap-
pellant’s Br. at 23–24. In Rude, the Supreme Court con-
cluded that a transferor retaining royalty rights did not
affect ownership for the transferee because the royalties
“reserve[d] to [the transferor] no control over the patents
or their use or disposal, or any power to interfere with the
management of the business growing out of their owner-
ship.” 130 U.S. at 163. This suggests that limits affecting
LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP. 9
“control over the patents” might “modify or limit the abso-
lute transfer of title.” Id. Indeed, the Supreme Court cau-
tioned two years later in Waterman that “[w]hether a
transfer of a particular right or interest under a patent is
an assignment or a license does not depend upon the name
by which it calls itself, but upon the legal effect of its provi-
sions.” 138 U.S. at 256 (emphasis added). That is con-
sistent with our analysis here.
Lone Star also argues that the district court “miscon-
strued the [transfer agreement] at a fundamental level.”
Appellant Br. at 26. According to Lone Star, the broad con-
veyance of rights transferred AMD’s rights to Lone Star.
That AMD retains certain rights, such as the right to neu-
tralize any enforcement effort by Lone Star against an un-
listed target, reflects a “contractual promise[]” from Lone
Star back to AMD rather than a limit on which rights were
transferred to Lone Star. Id. at 27. But such a distinction
finds no support in our case law. As stated above, the sub-
stance of the transaction is what matters and the sub-
stance of this transfer agreement gave AMD important
rights in the patents. The relevant question here is
whether AMD’s rights, however retained or reacquired, in-
clude any substantial rights. See AsymmetRx, 582 F.3d at
1320 (“Although the AsymmetRx License effected a broad
conveyance of rights to AsymmetRx, Harvard retained sub-
stantial interests . . . and AsymmetRx therefore does not
have the right to sue for infringement as a ‘patentee’ under
the patent statute.”). Lone Star’s argument invites us to
ignore the totality of the circumstances and instead focus
on a single part of the agreement. We decline to do so.
2. The Totality of the Transfer Agreement
We turn next to whether the “totality” of the transfer
agreement reflects a transfer of all substantial rights in the
asserted patents to Lone Star. Id. at 1321. We conclude
that it does not.
10 LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP.
In considering this question, we have often focused on
two salient rights: enforcement and alienation. For exam-
ple, in Intellectual Property Development, Inc. v. TCI Ca-
blevision of California, Inc., 248 F.3d 1333 (Fed. Cir. 2001),
we noted that the transferee could only bring suit, at least
in some cases, with consent from the transferor. 248 F.3d
at 1344. But, as we explained, “a transferee that receives
all substantial patent rights from a transferor would never
need consent from the transferor to file suit.” Id. (emphasis
added). The transferor also retained the right to prevent
the transferee from assigning the patents at issue without
prior consent. Id. at 1345. Again, we explained, this sort
of restriction on alienation “weigh[ed] in favor of finding a
transfer of fewer than all substantial rights.” Id. Taken
together, these facts indicated that the transferor retained
substantial rights in the patents. Id. at 1345 (“In light of
[the transferor’s] right to permit infringement in certain
cases, the requirement that [the transferor] consent to cer-
tain actions and be consulted in others, and the limits on
[the transferee’s] right to assign its interests in the ’202 pa-
tent, we find that the [transfer] agreement at issue trans-
fers fewer than all substantial rights in the ’202 patent
from [the transferor] to [the transferee].”). The extent of
Lone Star’s ability to enforce and alienate the asserted pa-
tents is also instructive.
As to enforcement, Lone Star needs AMD’s consent to
file suit against unlisted entities. For example, if Lone Star
asserts the patents against a target that is not listed in the
transfer agreement, then AMD can grant a sublicense and
negate the lawsuit. AMD can also negate any effort to add
new targets to the agreement. Lone Star’s enforcement
rights are, thus, illusory, at least in part. See Speedplay,
Inc. v. Bebop, Inc., 211 F.3d 1245, 1251 (Fed. Cir. 2000) (ex-
plaining that the right to sue is “illusory” when one party
“can render that right nugatory by granting the alleged in-
fringer a royalty-free sublicense”). Lone Star therefore
does not possess the right to sue for “all infringement.” See
LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP. 11
Sicom Sys., Ltd. v. Agilent Techs., Inc., 427 F.3d 971, 979
(Fed. Cir. 2005) (concluding that the right to sue for com-
mercial infringement, but not non-commercial infringe-
ment, signified that the transferee lacked “the exclusive
right to sue for all infringement”). This suggests that Lone
Star therefore lacks all substantial rights in the asserted
patents. See Intellectual Prop. Dev., 248 F.3d at 1344–45;
see also Diamond Coating, 823 F.3d at 621 (agreeing with
a district court’s conclusion that a transferee’s exclusionary
rights were not “unfettered” because the transferor enu-
merated who it wanted the transferee to sue).
Lone Star emphasizes that it possesses the right to in-
itiate lawsuits and the right to indulge infringement (by
not initiating a lawsuit) at least as to unlicensed entities,
which includes Appellees. It is true that we have treated
the exclusive right to sue as significant. See, e.g., Sicom,
427 F.3d at 979 (“[A]n important substantial right is the
exclusive right to sue for patent infringement.”); Abbott
Labs. v. Diamedix Corp., 47 F.3d 1128, 1132 (Fed. Cir.
1995) (“[T]he right to indulge infringements . . . normally
accompanies a complete conveyance of the right to sue.”).
But, as explained above, it is AMD who decides whether
Lone Star can challenge or indulge infringement with re-
spect to unlisted targets. For example, if an unlisted entity
begins practicing the patents, AMD—without Lone Star’s
consent—can indulge that infringement by refusing to add
that party to the list of approved targets. AMD could even
withhold its consent conditional on payments from the un-
listed target. See Oral Arg. at 17:45–18:02, available at
http://oralarguments.cafc.uscourts.gov/de-
fault.aspx?fl=2018-1580.mp3.
Lone Star insists that restrictions on suing unlisted
targets are irrelevant here because Appellees are all Unli-
censed Third Party Entities. Appellant Br. at 32 (“[I]n Di-
amond Coating . . . and other similar cases, the
transferor’s retained control over litigation had the poten-
tial to impact the licensee’s litigation conduct and
12 LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP.
strategies with respect to the named defendants.”). But we
rejected this same argument in Sicom:
We find unpersuasive Sicom’s response that it
is not suing Appellees’ customers, nor suing for
non-commercial infringement, and that this court
should not consider risks that are outside the scope
of the facts in this case. Sicom’s focus on the par-
ties in suit is misplaced where this court has estab-
lished that the intention of the parties to the
Agreement and the substance of what was granted
are relevant factors in determining whether all
substantial rights in a patent were conveyed.
Sicom, 427 F.3d at 979. The fact that the transfer agree-
ment allows Lone Star to assert the patents against Appel-
lees is important, but it is the effect of the agreement on
the respective rights of the patentee and the transferee
that controls. 4 See, e.g., Intellectual Prop. Dev., 248 F.3d at
1336 (concluding that a transferee that possessed the ex-
clusive right to file suit still did not possess all substantial
rights); Diamond Coating, 823 F.3d at 619 (same). And the
effect of this agreement is that AMD did not fully transfer
the right to enforce its patents. The fact that AMD may
have transferred some rights, with respect to certain un-
listed entities, does not mean it transferred all substantial
rights in the full scope of the patent.
As to alienation, the agreement restricts Lone Star’s
ability to transfer the asserted patents. In particular, Lone
Star cannot transfer the patents to a buyer unless that
buyer agrees to be bound by the same restrictions as Lone
Star. J.A. 2026. Otherwise, AMD can withhold its
4 For the same reason, the fact that Lone Star has
paid the maintenance fees for the asserted patents does not
negate the reversionary interest provided to AMD in the
agreement.
LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP. 13
required consent and halt the sale. While Lone Star argues
that this restriction is insignificant because AMD cannot
“unreasonably” withhold its consent, Lone Star concedes
that it would be reasonable, indeed expected, for AMD to
withhold consent if the prospective transferee refuses to be
bound by the transfer agreement. Appellant’s Br. at 46
(“In the full context of § 2.6, it would not be reasonable for
AMD to withhold consent so long as [Lone Star] complied
with the requirement . . . to secure the transferee’s agree-
ment to be bound by [the transfer agreement].”). Not only
does this substantially restrict Lone Star’s ability to trans-
fer the patents, it ensures that AMD will always control
how the patents are asserted. See Propat Int’l Corp. v.
Rpost, Inc., 473 F.3d 1187, 1191 (Fed. Cir. 2007) (“The right
to dispose of an asset is an important incident of owner-
ship, and such a restriction on that right is a strong indica-
tor that the agreement does not grant [the transferee] all
substantial rights under the patent.”). This is fundamen-
tally inconsistent with a transfer of all substantial rights.
Requiring Lone Star to assign the patents back to AMD, or
an agent of its choice, before abandoning the patents has a
similar effect. See Aspex Eyewear, Inc. v. Miracle Optics,
Inc., 434 F.3d 1336, 1340–41 (Fed. Cir. 2006) (discussing
how reversionary interests favoring the transferor signal,
to varying degrees, a transfer of fewer than all substantial
rights).
In addition to these restrictions on enforcement and al-
ienation, several other aspects of the agreement further
support our conclusion. For example, the agreement se-
cures a share of Lone Star’s “monetization efforts” for
AMD. See Propat, 473 F.3d at 1191 (“[T]he fact that a pa-
tent owner has retained a right to a portion of the proceeds
of the commercial exploitation of the patent . . . does not
necessarily defeat what would otherwise be a transfer of all
substantial rights . . . [but] the fact that [the transferor] re-
tains a substantial share of the proceeds is consistent with
[transferor’s] retaining ownership rights in the
14 LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP.
patent . . . .”). And the agreement allows AMD and its af-
filiates to make, use, and sell products practicing the pa-
tents. See Diamond Coating, 823 F.3d at 619 (“We have
held that a licensor’s retention of a limited right to develop
and market the patented invention indicates that the licen-
see failed to acquire all substantial rights.” (internal quo-
tation marks omitted)). While these facts may not be
dispositive alone, together they suggest that AMD did not
transfer all substantial rights in its patents to Lone Star. 5
Lone Star argues that the policy underpinning our “all
substantial rights” test, the danger of multiple litigations
against the same defendant by multiple plaintiffs, is not
present here because AMD cannot sue Appellees. But we
have also recognized a danger in allowing patentees to
award a “hunting license” to third-parties. See Prima Tek
II, L.L.C. v. A-Roo Co., 222 F.3d 1372, 1381 (Fed. Cir. 2000)
(“[A] ‘right to sue’ clause cannot confer standing on a bare
licensee . . . To hold otherwise would allow a patent owner
to effectively grant a ‘hunting license,’ solely for the pur-
pose of litigation, in the form of a pro forma exclusive li-
cense . . . The Supreme Court long ago disapproved of such
arrangements.”); see also Crown Die & Tool Co. v. Nye Tool
& Mach. Works, 261 U.S. 24, 40 (1923) (concluding that the
transfer of the right to sue for patent infringement, by it-
self, does not permit a plaintiff to bring suit for infringe-
ment in its own name); John Wiley & Sons, Inc. v. DRK
Photo, 882 F.3d 394, 409 (2d Cir. 2018) (“Crown Die sug-
gests to us that the realm of intellectual property law has
5 Relying on Diamond Coating, the district court also
considered whether Lone Star has the right “to make, use,
and sell products or services under the patent[s].” In re
Lone Star, 2018 WL 500258, at *3 (referring to this “right”
as “vitally important”). Even assuming Lone Star pos-
sesses such a right, our conclusion remains the same in
view of the agreement as a whole.
LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP. 15
special characteristics that place it outside of any generally
permissive regime for the assignment of federal claims.”).
This additional policy concern lends support to our conclu-
sion here.
In sum, we agree with the district court that AMD did
not transfer all substantial rights in the asserted patents.
Lone Star is therefore not the relevant patentee and cannot
assert these patents in its own name under § 281.
B. Article III Standing
Appellees argue that, because Lone Star is not a pa-
tentee and never explicitly alleged that it was an exclusive
licensee, it lacks standing to bring suit. We disagree.
The Constitution of the United States vests judicial
power in the federal courts. U.S. Const. art. III, § 1.
That power may only be exercised to resolve “Cases” or
“Controversies.” Id. art. III, § 2. “The doctrine of constitu-
tional standing serves to identify which disputes fall within
these broad categories and therefore may be resolved by a
federal court.” WiAV Sols. LLC v. Motorola, Inc., 631 F.3d
1257, 1264 (Fed. Cir. 2010). A party must establish stand-
ing, i.e. show that its case or controversy is amenable to
resolution by a federal court, by demonstrating that it suf-
fers an injury which can be fairly traced to the defendant
and likely redressed by a favorable judgment. Lujan v.
Defs. of Wildlife, 504 U.S. 555, 560–61 (1992). At the plead-
ing stage, “general factual allegations . . . may suffice” to
satisfy these requirements. Id. at 561.
We have recognized that those who possess “exclusion-
ary rights” in a patent suffer an injury when their rights
are infringed. See, e.g., WiAV, 631 F.3d at 1264–65 (“[A]
party holding one or more of those exclusionary rights—
such as an exclusive licensee—suffers a legally cognizable
injury when an unauthorized party encroaches upon those
rights and therefore has standing to sue.”). As we ex-
plained in Morrow, “exclusionary rights” involve the ability
16 LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP.
to exclude others from practicing an invention or to “forgive
activities that would normally be prohibited under the pa-
tent statutes.” 499 F.3d at 1342. Lone Star alleged that it
possesses the sort of exclusionary rights that confer Article
III standing. See, e.g., J.A. 13082–13084 (alleging that it
possesses rights in the asserted patents). The transfer
agreement, which is referenced in each complaint, also sug-
gests as much. See, e.g., J.A. 2621 (mentioning AMD’s “as-
sign[ment]” of rights to Lone Star); J.A. 2025 (allowing
Lone Star to “collect royalties”). These rights distinguish
Lone Star from the plaintiff in Morrow, who lacked the
ability to grant licenses or “forgive” infringement. 499 F.3d
at 1338–43. Lone Star also alleged that Appellees infringe
its exclusionary rights. See, e.g., J.A. 2623–2655. And it is
clear that a court could redress an injury caused by that
infringement. This is enough to confer standing at the
pleadings stage. See WiAV, 631 F.3d at 1266 (noting that
licensees “may have standing to sue some parties and not
others”).
Appellees insist that Lone Star lacks constitutional
standing because it did not allege it was an “exclusive li-
censee.” Appellees’ Br. at 59 (“[Lone Star] has no basis for
constitutional standing, for it never alleged that it is an ex-
clusive licensee.”). But constitutional standing also does
not depend on labels; it is the substance of the allegations
that matters. Lone Star adequately alleged that it pos-
sesses exclusionary rights and that Appellees infringe
those rights. See, e.g., J.A. 2621–2655. The fact that it be-
lieved its rights included all substantial rights does not
mean its allegations fall short of alleging a cognizable in-
jury. Cf. Morrow, 499 F.3d at 1340 (concluding that a party
“hold[ing] exclusionary rights and interests created by the
patent statutes, but not all substantial rights to the patent”
still has constitutional standing to sue for infringement).
Although Lone Star cleared this constitutional thresh-
old, the district court concluded that it lacked standing to
proceed without AMD. But treating AMD’s absence as
LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP. 17
implicating Lone Star’s standing confuses the require-
ments of Article III—which establish when a plaintiff may
invoke the judicial power—and the requirements of § 281—
which establish when a party may obtain relief under the
patent laws. The district court’s mistake, repeated by the
parties on appeal, is understandable. Indeed, we have of-
ten treated “statutory standing,” i.e. whether a party can
sue under a statute such as § 281, as jurisdictional. See
AsymmetRx, 582 F.3d at 1318 (‘The issue of AsymmetRx’s
standing to bring suit without Harvard joining as a plain-
tiff was not raised by either party or by the district court.
However, an appellate court must satisfy itself that it has
standing and jurisdiction whether or not the parties have
raised them.”).
But the Supreme Court has recently clarified that so-
called “statutory standing” defects do not implicate a
court’s subject-matter jurisdiction:
We have on occasion referred to [whether a plaintiff
may bring suit under a certain statute] as “statu-
tory standing” and treated it as effectively jurisdic-
tional . . . That label is an improvement over the
language of “prudential standing,” since it correctly
places the focus on the statute. But it, too, is mis-
leading, since “the absence of a valid (as opposed to
arguable) cause of action does not implicate sub-
ject-matter jurisdiction, i.e., the court’s statutory or
constitutional power to adjudicate the case.”
Lexmark Int’l, Inc. v. Static Control Components, Inc., 572
U.S. 118, 128 n.4 (2014); see also Flast v. Cohen, 392 U.S.
83, 99 (1968) (“The fundamental aspect of standing is that
it focuses on the party seeking to get his complaint before
a federal court and not on the issues he wishes to have ad-
judicated.”).
Lexmark is irreconcilable with our earlier authority
treating § 281 as a jurisdictional requirement. Indeed, fol-
lowing Lexmark, several courts have concluded that
18 LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP.
motions to dismiss based on “statutory standing” defects
are properly brought under Rule 12(b)(6) rather than Rule
12(b)(1) in recognition of the fact that such defects are not
jurisdictional. See, e.g., Minden Pictures, Inc. v. John Wiley
& Sons, Inc., 795 F.3d 997, 1001 (9th Cir. 2015) (noting
that “[defendant’s] Rule 12 motion to dismiss [because the
plaintiff was not the owner of the copyright at issue] should
have been brought under Rule 12(b)(6) . . . rather than un-
der Rule 12(b)(1) . . . for the issue is statutory rather than
Article III standing”); John Wiley & Sons, 882 F.3d at 402
n.4 (distinguishing between a plaintiff’s “right to pursue a
cause of action under the Copyright Act” and “Article III
standing” in view of Lexmark). Where intervening Su-
preme Court precedent makes clear that our earlier deci-
sions mischaracterized the effects of § 281, we are bound to
follow that precedent rather than our own prior panel de-
cisions. Cf. Troy v. Samson Mfg. Corp., 758 F.3d 1322, 1326
(Fed. Cir. 2014) (“It is established that a later panel can
recognize that the court’s earlier decision has been implic-
itly overruled as inconsistent with intervening Supreme
Court authority.”). We therefore firmly bring ourselves
into accord with Lexmark and our sister circuits by con-
cluding that whether a party possesses all substantial
rights in a patent does not implicate standing or subject-
matter jurisdiction. 6
6 Although the district court erred in treating Appel-
lees’ motions as jurisdictional, its error was harmless be-
cause we review motions to dismiss under Rule 12(b)(1)
and Rule 12(b)(6) de novo. See Harris v. Amgen, Inc., 573
F.3d 728, 732 n.3 (9th Cir. 2009) (acknowledging that “dis-
missal for lack of statutory standing is properly viewed as
dismissal for failure to state a claim” but finding the error
harmless in light of analogous standard of review).
LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP. 19
Accordingly, although Lone Star does not possess all
substantial rights in the asserted patents its allegations
still satisfy Article III. See Lexmark, 572 U.S. at 128 n.4.
C. Rule 19
Lone Star argues that, because it has standing, even if
it lacks all substantial rights in the patents, it should be
given an opportunity to join AMD as a necessary party be-
fore this case is dismissed. We agree. This result is com-
pelled by Federal Rule of Civil Procedure 19 and our case
law.
In Independent Wireless, the Supreme Court acknowl-
edged that licensees cannot bring suit in their own name.
269 U.S. at 466–68. But the Court also concluded that an
exclusive licensee should be able to join the patent owner,
involuntarily if need be, to maintain suit. Id. at 473. Oth-
erwise, the licensee possesses a right without a remedy.
Id. at 472. Joinder, by contrast, “secur[es] justice to the
exclusive licensee.” Id. It also honors “the obligation the
[patent] owner is under to allow the use of his name and
title to protect all lawful exclusive licensees and sublicen-
sees against infringers.” Id. The joinder rule outlined in
Independent Wireless was incorporated into Federal Rule
of Civil Procedure 19. See 7 Charles Alan Wright et al.,
Federal Practice and Procedure § 1606 (3d ed. 2018) (noting
that “the involuntary-plaintiff procedure” embodied in
Rule 19 was “first enunciated by the Supreme Court in In-
dependent Wireless” and observing that the rule “has been
used extensively to allow the exclusive licensee of a patent
or a copyright . . . to prosecute an action by compelling the
joinder of the owner” (internal footnotes omitted)); see also
Caprio v. Wilson, 513 F.2d 837, 839 (9th Cir. 1975) (ac-
knowledging the same).
The rule of Independent Wireless, as incorporated into
Rule 19, provides a clear command. A necessary party who
is subject to service of process and whose joinder will not
otherwise destroy a court’s subject-matter jurisdiction
20 LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP.
“must be joined.” Fed. R. Civ. P. 19(a)(1). The rule extends
its command directly to courts. See Fed. R. Civ. P. 19(a)(2)
(“If a person has not been joined as required, the court must
order that the person be made a party.” (emphasis added)).
Of course, while the rule’s command is mandatory, it is
not inflexible. If a party whose joinder is otherwise re-
quired by part (a) cannot be feasibly joined, part (b) allows
a court to consider whether the case should proceed any-
way or be dismissed because that party is indispensable.
Fed. R. Civ. P. 19(b); see also A123 Sys., 626 F.3d at 1222
(concluding that dismissal was appropriate because the ab-
sent patent owner, who could not be joined because it had
not waived sovereign immunity, “was not only a necessary
party but also an indispensable party”). Put simply, the
rule requires courts to engage with this two-step inquiry
when a plaintiff asserts claims that also implicate the
rights of necessary third parties. 7
We have interpreted Rule 19 and Independent Wireless
as directing courts to join patentees along with licensees
who otherwise have standing. In Abbott, for example, we
explained that such joinder is “required” and consistent
with “the policies underlying Fed. R. Civ. P. 19.” 47 F.3d
7 We have recognized a limited exception to Rule 19’s
mandatory command where the rule conflicts with “sub-
stantive patent rights.” STC.UNM v. Intel Corp., 754 F.3d
940, 946 (Fed. Cir. 2014) (“[T]he 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 Rule 19(a).”). Setting
aside of the merits of such an exception, this is not a case
where substantive patent rights and the rules of procedure
point in different directions because, as Independent Wire-
less recognized, patent owners have no substantive patent
right to shield themselves from being joined along with an
appropriate licensee.
LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP. 21
at 1133. And, while the patentee in Abbott sought to vol-
untarily join the case, Rule 19 applies with equal force re-
gardless of whether joinder is prompted by the patentee or
the licensee. In either case, the patentee must be joined, if
feasible, when it is a necessary party. Fed. R. Civ. P. 19.
Abbott is no outlier in this respect. See, e.g., Intellectual
Prop. Dev., 248 F.3d at 1347 ( “As a general rule, in accord-
ance with Independent Wireless, this court adheres to the
principle that a patent owner should be joined, either vol-
untarily or involuntarily, in any patent infringement suit
brought by an exclusive licensee having fewer than all sub-
stantial patent rights.”); Morrow, 499 F.3d at 1340 (noting
that “[a] patentee who transferred these exclusionary in-
terests is usually joined to satisfy prudential standing con-
cerns” and stating that “[t]his joinder analysis has been
incorporated in Federal Rule of Civil Procedure 19”); Asym-
metRx, 582 F.3d at 1321–22 (concluding that the plaintiff
lacked all substantial rights in the asserted patents, but
remanding for consideration of whether the patentee
should be joined under Rule 19); Univ. of Utah v. Max-
Planck-Gesellschaft Zur Forderung Der Wissenschaften
E.V., 734 F.3d 1315, 1326 (Fed. Cir. 2013) (noting that our
cases “strongly support the conclusion that patent owners
are required to be joined if feasible under Rule 19(a)”); Alps
S., LLC v. Ohio Willow Wood Co., 787 F.3d 1379, 1385 (Fed.
Cir. 2015) (acknowledging “our practice of endorsing join-
der of patent owners . . . in order to avoid dismissal for lack
of standing”); see also 7 Charles Alan Wright et al., Federal
Practice and Procedure § 1611 (3d ed. 2019) (“[T]he non-
joinder of someone described in Rule 19(a) does not result
in a dismissal if that person can be made a party to the
action.”).
Joinder also furthers the purposes of Rule 19. As the
Supreme Court recognized in Independent Wireless, joining
a patentee under Rule 19 helps “secur[e] justice” for licen-
sees so they can vindicate their rights. 269 U.S. 472–73.
It makes little sense here to ignore this rule, even if we
22 LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP.
could, because the licensee brought suit thinking it was the
patentee and turned out to be wrong. Joinder also ensures
that the resulting judgment affords complete relief be-
tween AMD, Lone Star, and Appellees. See AsymmetRx,
582 F.3d at 1322 (concluding that “the purpose of
Rule 19 . . . is best served by joinder of [the patentee],
which would permit the relationships between [the licen-
see], [the defendant], and [the patentee] to all be resolved
at the same time as well as solve the standing problem”);
Abbott, 47 F.3d at 1133 (nothing that “[t]he purpose of Rule
19 . . . is thus served by joinder” to “permit [the patentee’s]
dispute with [the defendant] to be adjudicated along with
[the licensee’s]”).
The district court’s dismissal was inconsistent with
Rule 19 and our case law. If AMD is the patentee, as the
district court correctly concluded, then AMD’s joinder
would ordinarily be “required.” See Abbott, 47 F.3d at 1133
(citing Rule 19). And since Lone Star agreed that AMD
should be joined, assuming it retained substantial rights in
the asserted patents, Lone Star essentially conceded that
AMD is a necessary party. The district court therefore
should have considered whether AMD’s joinder was feasi-
ble. If so, then AMD must be joined—involuntarily if need
be. If not, then the district court should consider whether
AMD is indispensable. Rather than engaging in this anal-
ysis, however, the district court declined to join AMD be-
cause it thought doing so “would reward Lone Star” for a
“litigation gimmick” and prejudice Appellees. In re Lone
Star, 2018 WL 500258, at *6. But the application of Rule
19 is mandatory, not discretionary. 8
8 Appellees contend that the decision to allow joinder
of parties is discretionary under Rule 15. Appellees’ Br. at
49 (“Rule 15(a)(2) . . . prove[s] that curative amendments
are permissive, not mandatory, and fall within the district
court’s broad discretion.”). But Rule 15 and Rule 19 serve
LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP. 23
The district court also faulted Lone Star for not ex-
pressly alleging that it was an “exclusive licensee.” Id.
(“To repeat, Lone Star’s complaints alleged only that it is
an ‘assignee’ and ‘sole owner’ of the patents-in-suit. It can-
not simply retreat to the position of an ‘exclusive licensee’
to evade arguments that it did not actually receive ‘all sub-
stantial rights’ in the patents-in-suit.”). As explained
above, Lone Star alleged that it possesses exclusionary
rights. Although its rights are less than all substantial
rights, we have consistently said that the cure for this de-
fect is to join the patent owner and not to dismiss the case.
See, e.g., Morrow, 499 F.3d at 1340.
Appellees argue that Rule 19 is inapposite because it
only applies where a district court dismisses for failure to
join a party under Rule 12(b)(7). Appellees’ Br. at 57 (“The
Rule 19 cases and commentary . . . explain how courts
should proceed in the face of motions to dismiss for failure
to join a required party, which is a Rule 12(b)(7) motion.”).
In fact, some of the defendants below did move for dismis-
sal under Rule 12(b)(7). See, e.g., J.A. 14534. Regardless,
Rule 19 is mandatory and so it applies whether a defendant
invokes Rules 12(b)(1), (6), (7), or none of the above.
Finally, while Appellees point to cases in which we
have affirmed dismissals where licensees lacked all sub-
stantial rights, these cases are distinguishable. Appellees’
Br. at 51–53. In Sicom, for example, the licensee did not
contest that its case should be dismissed assuming it could
not establish that it possessed all substantial rights. 427
F.3d at 980 (noting that dismissal “is generally inappropri-
ate where the standing defect can be cured”). But Lone
Star argued in the alternative that the trial court should
join AMD if the court found that Lone Star did not possess
all substantial rights in the patents. In Prima Tek II, the
different functions. Where there is a request to join an ab-
sent party, it is Rule 19 that governs.
24 LONE STAR SILICON INNOVATIONS v. NANYA TECH. CORP.
parties disputed whether we should join parties in the first
instance on appeal, after a trial, where it was unclear that
the patent owner could even be joined. 222 F.3d at 1381
(concluding that we should exercise our authority to join
parties on appeal “sparingly” and noting that the patent
owner may have been “beyond the jurisdiction of the dis-
trict court”). And in Propat, we concluded that the licensee
could not sue “even with [the transferor] named as a co-
plaintiff,” which is not the case here. 473 F.3d at 1194; see
also Textile Prods., Inc. v. Mead Corp., 134 F.3d 1481, 1485
(Fed. Cir. 1998) (same).
Ultimately, once the district court correctly concluded
that AMD did not transfer all substantial rights in the as-
serted patents to Lone Star, the district court should have
considered whether AMD could have been or needed to be
joined before dismissing this case. Its failure to do so was
legally erroneous.
III. Conclusion
We have considered the parties’ remaining arguments
and find them unpersuasive. Accordingly, we agree with
the district court that Lone Star cannot bring suit in its
own name because it does not possess all substantial rights
in the asserted patents. But we vacate the district court’s
dismissal and remand with an instruction that it consider
whether AMD must be joined here. We offer no view, how-
ever, on whether AMD must be or even can be joined. Our
instruction to the district court is simply that it must con-
sider the question.
VACATED AND REMANDED
COSTS
No costs.