Exclusive Enterprise Licensee Lacks Standing to Sue for Patent Infringement According to Federal Circuit

Yesterday, the Federal Circuit decided that an "exclusive enterprise license" (an amalgam of an exclusive territorial license and an exclusive field of use license) does not confer standing to sue for patent infringement under 35 U.S.C. 281 (link to precedential opinion here).

Plaintiff International Gamco, Inc. owns rights under U.S. Patent No. 5,324,035 which claims a gaming system network configured to allow multiple players to engage in games drawn from a finite and centrally controlled pool of game plays, including predetermined numbers of winning and losing plays. Technology claimed in the '035 patent covers many state lottery games, including video poker and other such games. Gamco had originally owned the '035 patent by way of an assignment. Subsequently, Gamco assigned the '035 patent to International Game Technology, the well-known manufacturer of gaming products and systems with headquarters in Reno, Nevada. In its assignment of the '035 patent to IGT, Gamco reserved certain rights in the "New York State Lottery Market." In its opinion finding that Gamco lacked standing to sue for alleged violations of its reserved rights, the Federal Circuit characterized its own statements in a prior case, Textile Products, inc. v. Mead Corp., 134 F.3d 1481, 1484 (Fed. Cir. 1998), as "dicta." The Textile opinion contains broad language regarding exclusive "fields of use" licenses, suggesting that a licensee with exclusive "fields of use" under a patent would have standing to sue for infringement under section 281.

Note: This opinion marks a significant deviation between patent and copyright law (at least in the Ninth Circuit). In copyright law, an exclusive licensee of any exclusive right under 17 U.S.C. 106 may sue for infringement. See Silvers v. Sony Pictures Entm't, inc. 402 F.3d 881, 885 (9th Cir. 2005) ("'the owner of' the particular exclusive right allegedly infringed" may sue for infringement).