“Bare Licensee” Lacks Standing to Sue for InfringementJanuary 9, 2007

In Propat International Corp & David Find and Helene Glasser (“Propat”) v. RPsot International Limted, Zafar Khan, Kenneth Barton and Terrance Tomkow (“Rpost”), the Federal Circuit affirmed the district court’s decision that Propat lacked standing to sue for infringement and, on the cross-appeal, affirmed the district court’s order denying RPost’s request for an award of fees and costs. At issue was a patent (“the ‘219 patent”) entitled “Apparatus and Method for Authenticating the Dispatch and Contents of Documents.” The ‘219 patent was assigned to Authenticational Technologies Ltd. (Authentix”) by the inventors. Authentix and Propat entered into a licensing agreement giving Propat responsibility to license the patent to third parties, to enforce the licensing agreement, and to sue infringers. The agreement contemplated that Propat would be engaged in licensing and litigation but did not explicitly address whether Propat enjoyed a license to practice the patent. Similarly, the agreement did not explicitly state whether Authentix retained the right to practice the patent. Subsequently, Propat sued Rpost for infringement of the ‘219 patent. The Federal Circuit affirmed the district court’s holding that Propat was not the owner of the patent and thus did not have standing to sue. This holding was based on a review of the agreement which showed Authentix retained sufficient rights in the patent and that “all substantial rights” in the patent were not assigned to Propat. To read the full decision, click here.

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