Page 130 - Intellectual Property Disputes

The Federal Circuit concluded that Mars’ claim "that it ‘inherently’ lost profits when the subsidiary lost
profits is unsupported." fn 90

When Mars licensed MEI, Mars gave not only a nonexclusive license, but Mars also gave MEI the right
to sue for infringement. The Federal Circuit found that a patentee cannot give an entity the right to sue
without also giving it the right to exclude. On the second issue, the court stated that the subsidiary was
not the exclusive licensee to the patents in the United States prior to 1996. It, consequently, lacked
constitutional standing. Standing, according to the Federal Circuit, is inexorably bound to the right to
exclude others from making, using, or selling. Therefore, MEI lacked standing. The Federal Circuit
opinion was consistent with the district court opinion that concluded the following:

• Mars’s arrangement with MEI was a licensing arrangement, rather than an arrangement where
profits ‘flow[ed] inexorably from MEI to Mars.

• Mars’s nonexclusive licensing policy signified that it expected only reasonable royalties, rather
than lost profits.

• Mars lacked the capacity to manufacture the patented products itself, without relying on MEI.’ fn
91

The Federal Circuit also provided guidance on a patent holder’s standing to sue for lost profits and
whether a licensee has such standing. The appellate court cited Crown Die & Tool Co. v. Nye Tool &
Machine Works, fn 92 for the proposition that "[t]he plaintiff in an [infringement] action ... must be the
person or persons in whom the legal title to the patent resided at the time of the infringement." fn 93 The
Federal Circuit also cited Sicom Systems, Ltd. v. Agilent Technologies, Inc. fn 94 for the proposition that
"[o]nly a patent owner or an exclusive licensee can have constitutional standing to bring an infringement
suit; a non-exclusive licensee does not." fn 95 "This standing deficiency cannot be cured by adding the
patent title owner to the suit." fn 96 "To be an exclusive licensee for standing purposes, a party must have
received, not only the right to practice the invention within a given territory, but also the patentee’s
express or implied promise that others shall be excluded from practicing the invention within that
territory as well." fn 97

fn 90 Mars, Inc. v. Coin Acceptors, Inc., 527 F.3d 1359 (Fed. Cir. 2008).

fn 91 Id. (citing 2006 U.S. Dist. LEXIS 77521).

fn 92 Crown Die & Tool Co. v. Nye Tool & Mach. Works, 261 U.S. 24 (1923).

fn 93 Mars, 527 F.3d at 1359.

fn 94 Sicom Sys., Ltd. v. Agilent Techs., Inc., 427 F.3d 971, 976 (Fed. Cir. 2005).

fn 95 Mars, 527 F.3d at 1359.

fn 96 Id. (citing Morrow v. Microsoft Corp., 499 F.3d 1332, 1341 (Fed. Cir. 2007)).

fn 97 Mars, 527 F.3d at 1359 (citing Rite-Hite, 56 F.3d at 1551).

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