## Facts

- Authentix held legal title to U.S. Patent No. 6,182,219, covering authentication of dispatched documents and contents.
- Authentix and Propat executed a 2002 agreement under which Propat undertook licensing and enforcement efforts for the patent and received a share of proceeds.
- The agreement labeled Authentix as the patent owner and assigned Propat duties relating to licensing and infringement litigation, including an express contractual right to sue.
- Authentix retained material rights, including patent ownership, responsibility for maintenance, a continuing economic interest in licensing/litigation proceeds, notice rights, and a “reasonable” veto over licensing and litigation decisions.
- Authentix also retained the ability to prevent Propat from transferring its interest to third parties.
- Propat sued RPost for patent infringement in the Central District of California.
- The district court dismissed without prejudice for lack of standing, concluding the agreement conveyed no “all substantial rights” and left Propat a bare licensee; the court did not rule on Propat’s request to join Authentix.
- RPost sought attorney fees and costs under 35 U.S.C. § 285, the court’s inherent authority, and 28 U.S.C. §§ 1927 and 1919; the district court denied the requests.
- Propat appealed the standing dismissal; RPost cross-appealed the fee and cost denials.

## Issues

1. Whether the 2002 agreement transferred “all substantial rights” or otherwise gave Propat a proprietary patent interest sufficient to confer standing to sue for infringement in its own name.
2. If Propat lacked all substantial rights, whether Propat could nonetheless maintain the infringement action by joining the patent owner as a co-plaintiff.
3. Whether the district court abused its discretion in denying attorney fees and costs under 35 U.S.C. § 285, inherent authority, and 28 U.S.C. §§ 1927 and 1919.

## Decision

- The Federal Circuit affirmed dismissal for lack of standing.
- The court held the agreement did not transfer all substantial rights and did not give Propat a proprietary interest in the patent; Propat was a bare licensee.
- The court held Propat lacked standing even if the patent owner were joined, because Propat’s interest was only a contractual right to share in proceeds rather than a patent property interest.
- The Federal Circuit affirmed denial of attorney fees and costs, finding no abuse of discretion and no adequate basis for an “exceptional case” finding or sanctions.

## Legal Principles

- A plaintiff must have constitutional and statutory standing to sue for patent infringement; ordinarily this requires legal title or an assignment of all substantial rights that makes the plaintiff effectively the patentee.
- Whether “all substantial rights” were transferred depends on the agreement as a whole; a contractual clause granting a “right to sue” is not dispositive.
- Retained rights by the patent owner—such as control over licensing and litigation, ongoing revenue interests, maintenance responsibility, and limits on assignment—can negate a finding that all substantial rights were conveyed.
- A party with no proprietary patent interest (only a contingent right to proceeds) lacks standing to sue, and cannot cure that defect simply by joining the patent owner.
- Attorney fees under 35 U.S.C. § 285 and sanctions under inherent authority or 28 U.S.C. §§ 1927 and 1919 are reviewed for abuse of discretion and require an adequate showing beyond ordinary litigation conduct.

## Conclusion

Because Authentix retained significant ownership, control, and economic rights under the 2002 agreement, Propat received only a bare license and a contingent share of proceeds, not a proprietary patent interest; it therefore lacked standing to sue for infringement even with the patent owner joined, and the denial of attorney fees and costs to the accused infringer was properly affirmed.


Propat Int’l Corp. v. RPost, Inc., 473 F.3d 1187 (Fed. Cir. 2007)