By Memorandum entered by The Honorable Richard G. Andrews in Acceleration Bay LLC v. Activision Blizzard, Inc., Civil Action No. 15-228-RGA (D.Del., June 3, 2016) (consolidated), the Court held that, unless Boeing joins the action within fourteen (14) days, Defendants’ motion to dismiss for lack of standing will be granted because Boeing is a required party under Federal Rule of Civil Procedure 19(a). In reaching its holding, the Court concluded that Acceleration Bay was an exclusive licensee rather than the owner of the patents-in-suit. Id. at *3-5. Thus, given that Boeing did not transfer all substantial rights to Acceleration Bay under the provisions of the purchase agreement, Boeing maintained a right to sue on the patents-in-suit as well and Boeing’s absence would place Defendants at substantial risk of multiple suits and multiple liabilities for the same act of infringement if Boeing was not required to be a party in the action. Id. at *10.
A copy of the Memorandum is attached.
The general takeaway is whether one labels a transfer of a particular right or interest under a patent an assignment or license is not determinative of whether the provision is an assignment or license. Rather, what is determinative of whether a transfer is an assignment or license is the legal effect of the provision. Unlike an assignee that may sue in its own name, a licensee having fewer than all substantial patent rights that seeks to enforce its rights in a patent generally must sue jointly with the patent owner.