Plaintiff Had Standing to Pursue Patent Infringement Action Against AOL and Google Where It Had Acquired All Substantial Rights to the Patent-In-Suit

December 19, 2012

Plaintiff Suffolk Technologies, LLC ("Suffolk") brought a patent infringement action against AOL and Google. Suffolk's complaint alleged that "AOL and Google have infringed U.S. Patent No. 6,082,835 (135 patent) entitled "Internet Server and Method of Controlling an Internet Server." The '835 patent claims a method of controlling an internet server whereby the server receives a hypertext transfer protocol file request from a web browser with an identification signal and then compares the identification signal with one or more predetermined identification signals, and based on the results of the comparison, a file may be transmitted from the server back to the requesting web browser."

AOL and Google filed a motion to dismiss the action based on lack of standing. As explained by the district court, "[t]his patent infringement suit presents the increasingly common, but always vexing jurisdictional question whether plaintiff, the assignee of the patent in issue, possesses ''all substantial rights' to the patent, such that it has standing to sue putative infringers."

The district court addressed the requirements for standing to bring a patent infringement action. "It is well settled that in order to determine whether a party holds title in a patent, a court must look beyond the name of the transfer, as '[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 provisions.' Waterman v. Mackenzie, 138 U.S. 252, 256 (1891). It is only 'if the patentee transfers all substantial rights under the patent, [that the transfer] amounts to an assignment and the assignee may be deemed the effective patentee . . . for purposes of [standing.]' Sicom Sys., Ltd., 427 F.3d at 976 (emphasis added). Put simply, for a successor in interest to have standing to sue, the patentee must have conveyed 'all substantial rights in the patent to the transferee.' Propat Int'l Corp, 473 F.3d at 1189; see Morrow v. Microsoft Corp., 499 F.3d 1332,1341 (Fed. Cir. 2007)."

The district court also noted that the "Federal Circuit has identified two rights as 'vitally important' to determining whether an assignment is sufficient to confer 'all substantial rights' and hence standing to sue for infringement: (i) the assignee's right to make, use, and sell a product or service under the patent and (ii) assignee's right to bring suit. See id. at 1361."

Applying those principles to the facts here, the district court concluded that Suffolk had obtained all of the substantial rights to the patent. "In other words, the parties to the assignments undeniably intended that Suffolk have standing to sue for infringement of the '835 patent and therefore, surely intended that the assignments would transfer to Suffolk all substantial rights to the '835 patent, including the right to practice the patent."

Finally, the district court rejected AOL's and Google's arguments that Suffolk had not obtained all of the substantial rights to the patent because a prior owner had retained a non-exclusive license and a right to share revenue from the exploitation of the patent. "In sum, the BT Assignment and the Suffolk Assignment have transferred all substantial rights in the '835 patent to Suffolk, which now possesses the core rights to practice the patent and to enforce the patent. In addition, Suffolk possesses all other substantial rights. As a result of the assignments, BT retained only a non-exclusive license to practice the patent and the right to share in revenue from the exploitation of the patent. Accordingly, Suffolk possesses "all substantial rights" to the '835 patent and thus has standing to maintain this infringement action."

Suffolk Technologies LLC v. AOL Inc. and Google Inc., Case No. 1:12cv625 (E.D. Va. Dec. 7, 2012)

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.