SUE L. ROBINSON, Chief Judge.
Plaintiff Monsanto Company ("Monsanto") filed this action on December 4, 2000 against defendants Aventis Cropscience SA and Aventis Cropscience USA LP (collectively, "Aventis")
A. The Comai Patents
The Comai patents relate generally to crops that are genetically engineered to be tolerant to glyphosate, a commercial herbicide that kills plants by binding to a critical plant enzyme called EPSPS.
In January 1986, Calgene and Aventis entered into an agreement (the "1986 Partnership Agreement") for the joint development of glyphosate-resistant crops. (D.I.9, Ex. 1) In 1989, the parties amended the 1986 Partnership Agreement (the "1989 Amendment") to grant Aventis
(Id. at A20-21) Calgene retained for itself the "co-exclusive right, without the right to sublicense," to make and use the aroA gene in corn for experimental research purposes, and sufficient rights to meet its obligations under the DeKalb Seed Agreement.
(Id. at A28)
B. The 1985 and 1991 DeKalb Agreements
In February 1985, Calgene and DeKalb Plant Genetics ("DeKalb") entered into an
Thus, as of 1991, DeKalb held an exclusive license only to the bacterial gene under the Comai patents in corn. All other rights under the Comai patents in corn were held by Calgene, or by Aventis on behalf of the Calgene-Aventis Partnership.
C. The 1994 Monsanto Litigation
In June 1994, Calgene and Aventis jointly sued Monsanto in the District of Delaware for patent infringement over Monsanto's development of glyphosate-tolerant soybeans using a bacterial EPSPS gene called CP4.
(Id. at A66) (emphasis added). With the 1994 DeKalb Agreement executed, Calgene, Aventis and Monsanto signed the 1994 Settlement Agreement, which provides, in pertinent part:
(Id. at A94) (emphasis added). The 1994 Settlement Agreement further provides that Aventis "shall convey title to Calgene of any of the [Comai] Patents held in the name of [Aventis]" and that "Monsanto shall have the right to bring an action for enforcement [of the Comai patents] against an infringer," but Calgene could bring such an action if Monsanto declined.
(Id. at A100).
D. Monsanto's Acquisition of Calgene
In 1996, Monsanto acquired Calgene.
(D.I.61, Ex. 17). The panel also found that
(Id.). On September 30, 2002, this court confirmed the arbitration award.
E. The North Carolina Litigation
In 1996, DeKalb and Monsanto agreed to develop a commercial glyphosate tolerant corn, introduced into the market the following year as Roundup Ready ® corn. In October 1997, Aventis sued DeKalb and Monsanto in the Middle District of North Carolina over Roundup Ready ® corn, which Aventis claimed was based on its corn-based EPSPS gene misappropriated by DeKalb. Aventis sought to, inter alia: (1) rescind the 1994 DeKalb Agreement because of DeKalb's concealment and fraud; and (2) enjoin Monsanto and DeKalb from commercializing Roundup Ready ® corn because the rescission of the license terminated their rights under certain patents. (Id. at A121-126)
The case went to trial in April 1999. A federal jury found that DeKalb had defrauded Aventis into entering the 1994 DeKalb Agreement and awarded Aventis unjust enrichment and punitive damages. Later, another jury found that Roundup Ready ® corn infringed an Aventis patent, and that DeKalb misappropriated Aventis's trade secrets. On February 8, 2000, the North Carolina court affirmed the jury verdicts, rescinded the 1994 DeKalb Agreement, and enjoined DeKalb from further patent infringement. (Id., Ex. 10). On November 19, 2001, the Federal Circuit affirmed the rulings of the North Carolina court. (D.I.61, Ex. 16). Although the North Carolina court dismissed Monsanto from the North Carolina litigation on grounds not relevant to the present action, Monsanto has agreed to be bound and is bound by the final judgment entered against DeKalb.
In rescinding the 1994 DeKalb Agreement, the North Carolina court held that DeKalb and Aventis were "returned to their respective positions prior to the signing of the 1994 Agreement." (Id. at A149). In other words, the North Carolina court reinstated the 1985 and 1991 DeKalb Agreements. Thus, DeKalb was left with an exclusive license to only the bacterial aroA gene under the Comai patents in corn. The 1994 Settlement Agreement was not altered by the North Carolina litigation.
III. STANDARDS OF REVIEW
Standing in a patent infringement case is derived from the Patent Act, which provides that "[a] patentee shall have remedy by civil action for infringement of his patent." 35 U.S.C. § 281 (1994). "The question of standing to sue is a jurisdictional one." Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1551 (Fed.Cir.1995). Standing is a "threshold issue in every federal case, determining the power of the court to entertain the suit." Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). Federal courts are under an independent obligation to examine their own jurisdiction, and standing "is perhaps the most important of [the jurisdictional] doctrines." FW/PBS Inc. v. City of Dallas,
It is well settled that standing cannot be "inferred argumentatively from averments in the pleadings," Grace v. Am. Cent. Ins. Co., 109 U.S. 278, 284, 3 S.Ct. 207, 27 L.Ed. 932 (1883), but rather "must affirmatively appear in the record," Mansfield, C. & L.M.R. Co. v. Swan, 111 U.S. 379, 382, 4 S.Ct. 510, 28 L.Ed. 462 (1884). Additionally, the party who seeks the exercise of jurisdiction in its favor has the burden of clearly alleging facts demonstrating that it is a proper party to invoke judicial resolution of the dispute. Id. In the present case, the court must determine whether there is affirmative evidence in the record indicating that Monsanto and Calgene have standing to sue Aventis for patent infringement.
B. Summary Judgment
A court shall grant summary judgment only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears the burden of proving that no genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n. 10, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). "Facts that could alter the outcome are `material,' and disputes are `genuine' if evidence exists from which a rational person could conclude that the position of the person with the burden of proof on the disputed issue is correct." Horowitz v. Fed. Kemper Life Assurance Co., 57 F.3d 300, 302 n. 1 (3d Cir.1995) (internal citations omitted). If the moving party has demonstrated an absence of material fact, the nonmoving party then "must come forward with `specific facts showing that there is a genuine issue for trial."' Matsushita, 475 U.S. at 587, 106 S.Ct. 1348 (quoting Fed.R.Civ.P. 56(e)). The court will "view the underlying facts and all reasonable inferences therefrom in the light most favorable to the party opposing the motion." Pa. Coal Ass'n v. Babbitt, 63 F.3d 231, 236 (3d Cir.1995). The mere existence of some evidence in support of the nonmoving party, however, will not be sufficient for denial of a motion for summary judgment; there must be enough evidence to enable a jury reasonably to find for the nonmoving party on that issue. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). If the nonmoving party fails to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof, the moving party is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
A. Plaintiffs' Standing to Sue on Corn
Only a "patentee" can bring an action for patent infringement. 35 U.S.C. § 281 (1994); Textile Prods., Inc. v. Mead Corp., 134 F.3d 1481, 1483 (Fed.Cir.1998). The term "patentee" comprises "not only the patentee to whom the patent was issued but also the successors in title to the patentee." 35 U.S.C. § 100(d). An exclusive licensee may bring suit in its own name if the exclusive licensee holds "all substantial rights" in the patent. Textile Prods., 134 F.3d at 1484; Vaupel Textilmaschinen KG v. Meccanica Euro Italia S.P.A., 944 F.2d 870, 875 (Fed.Cir.1991). "A grant of all substantial rights in a patent amounts to an assignment — that is, a transfer of title in the patent — which confers constitutional standing on the assignee to sue another for patent infringement
Intellectual Prop. Dev., 248 F.3d 1333, 1345 (citations omitted).
To determine whether an agreement transfers all or fewer than all substantial patent rights, a court must ascertain the intention of the parties and examine the substance of what was granted by the licensing agreement. See Vaupel, 944 F.2d at 874. The party asserting that it has all substantial rights in the patent "must produce ... written instrument[s] documenting the transfer of proprietary rights." Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245, 1250 (Fed.Cir.2000). "The title of the agreement at issue, which uses the term `license' rather than the term `assignment,' is not determinative of the nature of the rights transferred under the agreement; actual consideration of the rights transferred is the linchpin of such a determination." Intellectual Prop. Dev., 248 F.3d 1333, 1344 (citing Speedplay, 211 F.3d at 1250).
In the case at bar, the court concludes that plaintiffs do not hold "all substantial rights" in the Comai patents to enable the court to exercise jurisdiction over plaintiffs' claims concerning corn-based EPSPS genes. In 1994, the Calgene-Aventis Partnership granted Monsanto and DeKalb "co-exclusive" licenses to the Comai patents in corn, which enabled each to make, use, sell and license the patents to anyone without regard to the other. Thus, these "co-exclusive" licenses amounted to nothing more than nonexclusive licenses, which confer no standing on a party to bring or even join a suit for infringement. Upon rescission of the 1994 DeKalb Agreement, Monsanto's "co-exclusive" license remained nonexclusive, and DeKalb was left with only an exclusive license to the bacterial EPSPS gene pursuant to the 1985 and 1991 DeKalb Agreements. DeKalb's "co-exclusive" license reverted to the Calgene-Aventis Partnership, which now held the right to make, use, sell and license the Comai patents in corn to anyone without regard to Monsanto (but subject to Monsanto's rights to do the same). Upon termination of the Calgene-Aventis Partnership, Calgene granted Aventis a "royalty-free, exclusive, worldwide license" to all partnership technology, including the corn-based EPSPS gene, rendering Aventis "the exclusive owner or assignee of all such property." Consequently, the court finds that Calgene transferred "all substantial rights" in the Comai patents in
B. Defendants' License to the Comai Patents in Soybeans
Plaintiffs' motion for summary judgment that defendants are not licensed to the Comai patents in soybeans is granted.
C. Assignor Estoppel
Plaintiffs argue that defendants should be estopped from challenging the validity of the Comai patents under the doctrine of assignor estoppel. Assignor estoppel prevents a party who assigns a patent to another from later challenging the validity of the assigned patent. See Mentor Graphics Corp. v. Quickturn Design Sys., Inc., 150 F.3d 1374, 1377 (Fed. Cir.1998). This doctrine prevents the "unfairness and injustice" of permitting a party "to sell something and later to assert that what was sold is worthless." Id. An assignment contains an "implicit representation by the assignor that the patent rights that he is assigning (presumably for value) are not worthless." Id.
"A determination whether assignor estoppel applies in a particular case requires a balancing of the equities between the parties." Carroll Touch, Inc. v. Electro Mech. Sys., Inc., 15 F.3d 1573, 1579 (Fed. Cir.1993). Nevertheless,
Mentor, 150 F.3d at 1378. Assignor estoppel also prevents parties in privity with an estopped assignor from challenging the validity of the patent. See Diamond Scientific v. Ambico, Inc., 848 F.2d 1220, 1224 (Fed.Cir.1988).
In the case at bar, the Calgene-Aventis Partnership granted Monsanto an exclusive, worldwide license in the Comai patents to all crops except corn in exchange for $8 million. Although Calgene was the legal owner of the Comai patents at the time of the assignment to Monsanto, Aventis was in privity with Calgene and received value for the assignment. Thus, the court finds that Aventis made an implicit representation to Monsanto that the Comai patents were valid. As there are no exceptional circumstances present in this case, the court concludes that it would be inequitable for Aventis to now challenge the validity of the Comai patents.
For the reasons stated, defendants' motion for partial dismissal is granted, defendants' motion for partial summary judgment is denied as moot, and plaintiffs' motion for summary judgment is granted in part and denied in part. An appropriate order shall issue.
At Wilmington, this 30th day of September, 2002, consistent with the memorandum opinion issued this same day;
IT IS ORDERED that:
1. Defendants' renewed motion for partial dismissal (D.I.59-1) is granted.
2. Defendants' renewed motion for partial summary judgment (D.I.59-2) is denied as moot.
3. Plaintiffs' motion for partial summary judgment of absence of license and validity with regards to the Comai patents (D.I.70) is granted in part and denied in part as follows:
(Id. at A23)
(Id. at A58-59)
(Id. at A90).
(Id. at A14).
The Partnership Agreement identified "industrial property right" as
(Id. at A5).
(Id. at A108).
"Exhibit A" includes both the bacterial and corn EPSPS genes. (Id. at A109).
(D.I.9, Ex. 1)