Lone Star sued multiple parties, asserting multiple patents in each suit. Furthermore, AMD was entitled to a share of the proceeds of Lone Star’s “monetisation efforts” and was allowed to continue to practise the patents in its own right. AMD retained certain rights and control over the patents, including limiting the parties against which Lone Star could bring suit and controlling the entities to which the patents could be further transferred. However, the transaction involved no payment from Lone Star to AMD at the time of the agreement. In Lone Star, AMD had provided Lone Star Silicon Innovations LLC with a number of patents under a patent transfer agreement that purported to convey “all right, title and interest” in the patents to Lone Star. This decision could leave many IP owners rethinking their patent transfer agreements and arrangements with transferees. The Federal Circuit then went on to clarify the ease with which the transferee can invoke Rule 19 of the Federal Rules of Civil Procedure to forcibly join the transferee in the litigation if it is found that the transferee does not have sufficient rights to bring suit in its own name. Nanya Technology Corp – the court relied on the combination of numerous rights retained by the transferer to hold that the transferee did not obtain “all substantial rights” and could not bring suit in its own name. In a recent Court of Appeals for the Federal Circuit decision – Lone Star Silicon Innovations LLC v. What has been a common practice for monetising patents may now result in your company being forcibly dragged into litigation. You also want to be certain that your company will not be required to join in any enforcement litigation. You want to make sure that the new owners do not transfer the patents to your competitors. You want to be sure that certain customers and business partners will be shielded from any infringement suits. You decide to transfer the rights to a non-practising entity in order to monetise them. But you are not interested in suing your competitors.
There could be some untapped value in them. Your company’s patents are reaching expiration.
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