When is an exclusive license effectively a patent assignment?


As readers of IP Value Wire know, valuation analysts dealing with IP are advised to audit ownership issues early on in the project. Pamela Chestek, writing in Property Intangible, offers some sage counsel as she analyzes CopyTele, Inc. v. E Ink Holdings, Inc.:

Generally, patent owners or assignees have standing to sue in their own name alone.  Exclusive licensees can sue as long as the patent owner is joined in the suit. Non-exclusive licensees cannot even participate as a party to an infringement suit.

It does get sticky when the transfer of rights in an exclusive license is so complete that it is effectively an assignment. The case of CopyTele, Inc. offers an example.

There few rights that CopyTele retained when granting an exclusive license to the patent in suit to AU Optronics Corp.: CopyTele was responsible for maintenance fees; CopyTele “retained a non-exclusive right to use the Licensed Patents and Licensed Products in a non-competitive manner;” and AUO couldn’t assign the agreement without CopyTele’s prior written consent. That was enough. The court deemed the patent assigned, and CopyTele had no longer any standing to sue. The value of the patent to CopyTele had been stripped.


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