We will be discussing two recent, relevant opinions in our weekly SoCal IP Institute meeting on Monday, May 2, 2011. The first case discusses the requirement of an exclusive license in order to have standing to sue for copyright infringement. The second case addresses issues of personal jurisdiction in patent cases. A brief synopsis of the cases is presented below.
HyperQuest, Inc. v. N’Site Solutions, Inc., 08-2257, 08-3979, 08-4176 (7th Cir. Jan. 19, 2011) (attached). This case concerns the standing requirement to sue for copyright infringement of a software product for processing insurance claims. The product was licensed by Quivox Systems to N’Site Solutions. The terms of this license are in dispute. Quivox later sold its assets including the copyright for the software to Safelite Group who later granted those rights to HyperQuest. HyperQuest maintained the license originally entered into by Quivox. The source code for the software was eventually sold to Unitrin Direct Insurance. Eventually, HyperQuest sued N’Site and Unitrin for infringement.
The district court concluded that HyperQuest held only a non-exclusive license and, therefore, lacked standing to sue. The court also awarded costs and attorneys’ fees to N’Site and Unitrin. HyperQuest appealed and, in this case, the 7th Circuit affirmed. Essentially, the 7th Circuit agreed with the district court’s determination that, pursuant to the original agreement, HyperQuest was never in exclusive control of any one of the bundle of copyright rights in the eDoc software. As such, it was not an exclusive licensee in the appropriate meaning of that term, and lacked standing to sue for copyright infringement.
Radio Systems Corp. v. Accession, Inc., 2010-1390 (Fed. Cir. April 25, 2011) (attached). In this case, the Federal Circuit is reviewing a decision of the U.S. District Court for the Eastern District of Tennessee dismissing a patent declaratory judgment suit filed by Radio Systems. Accession, over a course of a number of years and through various actions, sought to license its patent on electronic pet door access systems to Radio Systems. Radio systems refused, attempted to patent its own product and, eventually brought suit. The district court dismissed the case for lack of personal jurisdiction over Accession in Tennessee.
Radio Systems sought review of this decision and asserted a number of basis for personal jurisdiction. First, Radio Systems argued that Accession’s activities in seeking to license the patent to Radio Systems were “directed” to Tennessee sufficiently to support personal jurisdiction. Second, Accession made ex parte efforts to inform the Patent and Trademark Office of its own patent application during the course of the prosecution of Radio System’s own patent. Radio Systems alleged that this was sufficient for personal jurisdiction in Tennessee because it’s primary effect was on Radio Systems in Tennessee. Finally, Radio Systems asserted that an NDA signed between the parties included a choice of forum clause that named Tennessee and that this conferred personal jurisdiction. The Federal Circuit disagreed with each contention and confirmed the district court’s dismissal of the declaratory judgment suit.
All are invited to join us in our discussion of these cases during the SoCal IP Institute meeting on Monday, May 2, 2011 at Noon in our Westlake Village office. This activity is approved for 1 hour of MCLE credit. If you will be joining us, please RSVP to Amanda Jones by 9 am Monday morning.