Patent Owner Unsuccessfully Challenges Licensee's Standing

In Evident Corp., et al. v. Church & Dwight Co., et al., (Fed. Cir., Feb. 22, 2005) patent owner Peroxydent and exclusive licensee Evident were on the losing side of their own patent infringement claim and an opposing claim for attorney fees. Seeking escape from the judgment, the atent owner argued that its exclusive licensee lacked standing in to bring the original lawsuit.

The doctrine of standing limits federal judicial power and has both constitutional and prudential components." Constitutional standing requires only that a plaintiff must have suffered an injury in fact, that there be a causal connection between the injury and a defendant’s conduct, and that the injury be redressable by a favorable court decision. However, whether a patentee should be joined, either voluntarily or involuntarily, in any infringement suit brought by an exclusive licensee is "prudential rather than constitutional in nature."

The court went on to note that although the presence of the owner of the patent as a party is indispensable to give jurisdiction under the patent laws, the policy concerns motivating the need for a patent owner to be joined in an infringement suit with its licensee—principally, from the standpoint of an accused infringer, avoidance of lawsuits and liabilities, and, from the standpoint of the patentee, ensuring that its patent is not invalidated or held unenforceable without its participation—are surely met here by Peroxydent having been joined as a third-party defendant.

"The typical challenge to prudential standing in a patent infringement case
occurs when an alleged infringing party asserts that the plaintiff, a licensee
with rights to or under the asserted patent, lacked standing to bring the
original lawsuit because the patent owner was not a party to the suit. This is
not such a case. Here, the underlying infringement action involves the licensee
suing alleged infringers, and the patent owner being brought into the suit by
the alleged infringers’ counterclaim. The objection to standing, tardy though it
was—raised now for the first time after seven years of litigation and a prior
appeal to this court—was made by Peroxydent, the patent owner, not by an accused
infringer. Nonetheless, regardless whether Peroxydent was brought into the suit
by the accused or the licensee, there is no standing problem.

* * *

"Although Peroxydent asserts that it had no stake in the litigation, the fact that its patent was in jeopardy in the litigation certainly would have affected Peroxydent’s interest. As a result, Peroxydent, properly joined in the counterclaim, cannot fairly argue that it had no interest in the litigation. Furthermore, Peroxydent’s presence precludes Church & Dwight from being subject to a separate lawsuit even if it was not liable to Evident. Under these circumstances, there can be no lack of prudential standing in the original patent infringement lawsuit. Accordingly, we conclude that
Peroxydent’s presence in the litigation as a third-party defendant fully satisfied any standing requirements. "