## Facts

- A USDA scientist developed an in-ovo bird-vaccination method patented as U.S. Patent No. 4,458,630.
- USDA publicly announced the patent was available for commercial licensing and, after a notice-and-comment process, granted an exclusive license to Embrex, Inc. in 1986 (initially expiring in 1996).
- In 1994, USDA extended Embrex’s exclusive license through the full patent term.
- Embrex later sued Service Engineering Corporation (SEC) and Edward G. Bounds, Jr. for infringement of the ’630 patent; a jury found substantial infringement and awarded enhanced damages and attorney’s fees.
- In late 1996, after the infringement litigation, SEC applied to USDA for a nonexclusive license; USDA denied the request because of Embrex’s exclusive license and denied administrative appeals.
- SEC and Bounds sued USDA seeking a declaration that the 1986 exclusive license and the 1994 extension were unlawful under the Bayh–Dole Act, asserting (among other contentions) deficient statutory notice related to the exclusive licensing decision.

## Issues

1. Whether SEC and Bounds fell within the Bayh–Dole Act’s “zone of interests” such that they had prudential standing to challenge USDA’s grant and extension of an exclusive license for a federally owned patent.
2. Whether a party that did not exist and did not participate as a prospective licensee during the original licensing process may later use Bayh–Dole to attack the agency’s earlier exclusive-licensing actions.

## Decision

- The court granted USDA’s motion for summary judgment.
- The court held SEC and Bounds lacked prudential standing to pursue their Bayh–Dole challenge to the exclusive license and its extension.
- The action was dismissed without reaching the merits of the alleged Bayh–Dole notice violations.

## Legal Principles

- Prudential standing limits statutory challenges to plaintiffs whose interests are arguably within the “zone of interests” protected or regulated by the statute invoked.
- Bayh–Dole’s exclusive-licensing notice-and-comment provisions principally protect interests of potential licensees and the public objectives of federal technology transfer at the time of the licensing decision.
- Parties who neither existed nor participated as potential licensees when an agency made the challenged licensing decision generally are not within Bayh–Dole’s zone of interests for purposes of contesting that decision years later.
- Summary judgment may resolve standing where material facts relevant to standing are undisputed and standing fails as a matter of law.

## Conclusion

The court concluded that SEC and Bounds—later entrants who sought to invalidate USDA’s longstanding exclusive license after infringement consequences and a denied license request—were not within the Bayh–Dole Act’s protected zone of interests and therefore could not use the Act to challenge USDA’s exclusive licensing decisions.


Serv. Eng’g Corp. v. U.S. Dep’t of Agric., No. 98-3173, 1999 U.S. Dist. LEXIS 21952 (D. Md. Dec. 20, 1999)