Aspex Eyewear, Inc. v. Altair Eyewear, Inc., 02 CIV. 6195(SCR).

• Decision Date: 07 March 2005
• Docket Number: No. 02 CIV. 6195(SCR).,02 CIV. 6195(SCR).
• Citation: 361 F.Supp.2d 210
• Parties: ASPEX EYEWEAR, INC., Contour Optik, Inc., Plaintiffs v. ALTAIR EYEWEAR, INC., Defendant
• Court: U.S. District Court — Southern District of New York

361 F.Supp.2d 210

ASPEX EYEWEAR, INC., Contour Optik, Inc., Plaintiffs v. ALTAIR EYEWEAR, INC., Defendant

No. 02 CIV. 6195(SCR).

United States District Court, S.D. New York.

March 7, 2005.

COPYRIGHT MATERIAL OMITTED

Matthew C. Wagner, Collen Intellectual Property Law, P.C., Ossining, NY, for Plaintiffs.

Brian G. Bodine, Kaustuv M. Das, Vitaliana Conforti, Davis Wright Tremaine LLP, Seattle, WA, Edward J. Davis, Davis, Wright, Tremaine LLP, New York, NY, for Defendant.

MEMORANDUM DECISION AND ORDER

ROBINSON, District Judge.

I. Background

A. Factual History

Aspex Eyewear, Inc. ("Aspex") is a Delaware corporation engaged in the distribution of eyewear, including certain auxiliary lenses which engage primary frames via magnetic attraction, as opposed to mechanical "clips," at the bridge region. Contour Optik, Inc. ("Contour"; Aspex and Contour are collectively referred to herein as the "Plaintiffs") is a Taiwanese corporation owned by the family of Richard and David Chao, who are the named inventors of patents at issue in this case.

Altair Eyewear, Inc., ("Altair" or "Defendant") is a California corporation also engaged in the distribution of eyewear. Altair is a wholly-owned subsidiary of Vision Services Plan ("VSP"), which is also a California corporation.

Aspex allegedly derives all of its rights with respect to the resale of bridge mounted magnetic eyewear from its Canadian sister company, Chic Optik ("Chic"). Both Chic and Aspex are owned and operated by the Ifergan family. Nonu Ifergan, a resident of Montreal, Canada, is the President of both companies. Thierry Ifergan, Nonu Ifergan's son, is the Executive Vice President of Aspex and a resident of Florida, Aspex's principal place of business.

On March 26, 1998, Chic and Aspex entered into a License Agreement ("Chic-Aspex Agreement"), which contains the following language:

LICENSOR [Chic] grants to LICENSEE [Aspex] an exclusive license to make, use, sell or have made products under the LICENSED PATENTS including all divisional, continuations, continuations-in-part, continuing patent applications (whether related to such application(s) directly or through one or more intervening applications), extensions or reissues of said licensed patents, and any patent which may issue thereon. LICENSOR shall update and advise the LICENSEE when pending patent applications which are divisional, continuations, continuations-in-part, extensions or reissues of the LICENSED PATENTS have been filed or have issued as patents (whether related to such application(s) directly or through one or more intervening applications).

Although the Chic-Aspex Agreement does not include a separate provision expressly defining "LICENSED PATENTS," it includes the following statement: "WHEREAS, LICENSOR [Chic] is the owner of the rights ("LICENSED PATENTS") embodied in various Agreements ("LICENSOR'S AGREEMENT") relating to magnetic eyewear for eyeglasses."

This case involves the alleged infringement of three patents: 1) United States Patent No. 5,737,054, entitled "Auxiliary Lenses for Eyeglasses" (the "'054 Patent"), which was issued by the PTO on April 7, 1998; 2) United States Patent No. 6,012,811, entitled "Eyeglass Frames with Magnets at Bridges for Attachment" (the "'811 Patent"), issued on January 11, 2000; 3) United States Patent Number 6,092,896, entitled "Eye-wear With Magnets" (the "'896 Patent"), issued on July 25, 2000 (the '054 Patent, '811 Patent and the '896 Patent are collectively referred to herein as the "Patents-in-Suit").

Richard Chao is the named inventor of the '054 Patent. Richard Chao and his brother David Chao are the named inventors of the '811 Patent and the '896 Patent. On July 31, 1998, after the Chic-Aspex Agreement was executed, Richard Chao granted Chic an exclusive license to then Patent Applications 08/766,327 and 08/963,299, from which the Patents-in-Suit ultimately issued. In July 1999, the Chaos assigned their ownership interests in the Patents-in-Suit to Contour.

B. Procedural History

The Plaintiffs filed their complaint in this action in August 2002, alleging violations of United States patent laws, 25 U.S.C. §§ 271, 281, 283. They filed an amended complaint later that month, which the Defendant answered in September 2002. Along with its answer, the Defendant made counterclaims against both Plaintiffs. The case was initially assigned to the docket of Judge Koeltl, but was reassigned to this court in September 2003.

In August 2004, the Defendant moved for partial summary judgment that Plaintiff Aspex does not have standing to sue for infringement of the Patents-in-Suit. Shortly thereafter, the Plaintiffs filed a motion, pursuant to Rule 19 of the Federal Rules of Civil Procedure, to add VSP as a defendant in this matter.

II. Analysis

A. Standard of Review

Under Federal Rule of Civil Procedure 56(c), summary judgment is appropriate when "there is no genuine issue as to any material fact [.]" FED. R. CIV. P. 56(c). Summary judgment may not be granted unless "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). Summary judgment is as appropriate in a patent case as it is in any other. See Union Carbide Corp. v. American Can Co., 724 F.2d 1567, 1571 (Fed.Cir.1984).

B. Defendant's Motion For Partial Summary Judgment Against Plaintiff Aspex For Lack Of Standing

Whether a plaintiff has standing to bring suit is a question of law, reviewed de novo. Consol. Edison Co., v. Richardson, 233 F.3d 1376, 1379 (Fed.Cir.2000). Under United States patent law, only "a patentee shall have remedy by civil action for infringement of his patent." 35 U.S.C. § 281. The term patentee includes "not only the patentee to whom the patent was issued but also the successors in title to the patentee." 35 U.S.C. § 100(d). The Plaintiffs have the burden of demonstrating standing. See Ortho Pharmaceutical Corp. v. Genetics Inst., 52 F.3d 1026, 1032-33 (Fed.Cir.1995).

Where a patentee makes an assignment of all significant rights under a patent, such assignee may be deemed the effective "patentee" under the statute and has standing to bring a suit in its own name for infringement. See Ortho, 52 F.3d at 1031. In addition to assignees of all significant patent rights, holders of exclusive licenses also have standing. See id. at 1032. In contrast, holders of non-exclusive licenses have no right to exclude others and, as such, have no standing to sue for infringement. See id. at 1031.

Federal Circuit precedents suggest that there are two kinds of exclusive licensees for the purpose of standing: 1) exclusive licensees who are "virtual assignees" and can, as a result, sue for patent infringement in their own names; and 2) other exclusive licensees who can sue only as co-plaintiff with the patentee. In order to be a "virtual assignee," it is clear that, at the very least, the exclusive licensee must have received his patent rights via a written instrument executed prior to bringing suit. See Enzo APA & Son v. Geapag A.G., 134 F.3d 1090, 1093-94 (Fed.Cir.1998). The requirements for other exclusive licensees, who sue as co-plaintiff with the patentee, appear to be less onerous, however.

The Defendant, apparently rejecting any distinction between exclusive licensees, argues that any exclusive licensee must have been granted its exclusive license prior to filing suit regardless of whether the patentee is a co-Plaintiff in its case. The court disagrees. In Waymark Corp. v. Porta Sys. Corp., the court directly confronted the argument that Waymark Corp., one of the plaintiffs in the underlying patent infringement suit, did not have standing to allege infringement of the patent at issue because no written exclusive license agreement existed at the time the case was filed. 334 F.3d 1358, 1364 (Fed.Cir.2003). The court rejected that argument summarily, explaining that it was "not a correct statement of the law." Id. Crucially, the court noted that another entity, the Caravello Partnership, which was Waymark's co-plaintiff in the underlying infringement action, had claimed a written assignment of the patent and, therefore, had standing to bring the action and join Waymark as a co-plaintiff. See id. Under these circumstances, it did not matter to the court that Waymark could allege that it was the holder of only an oral exclusive license because "[o]nly assignments need be in writing" while "[l]icenses may be oral." See id.

This interpretation of Waymark is consistent with Enzo because, in Enzo, the only plaintiff in the underlying patent infringement action was the exclusive licensee — the patentee was not joined. See 134 F.3d at 1091-92. Given that the underlying plaintiff had, at most, an oral exclusive license or a nunc pro tunc license executed after suit was brought, the court concluded that the holder of title must be joined in order to confer standing. See Enzo, 134 F.3d at 1093. The court did not hold however, that the plaintiff could not have standing under any circumstances.

Enzo, it is crucial to note, is not this case, because here Aspex joined Contour, the assignee of the rights to the Patents-in-Suit, as co-Plaintiff, and no party appears to challenge Contour's standing to sue. In light of this, Aspex has premised its argument for standing on two separate sources of patent rights: 1) the Chic-Aspex Agreement¹; and 2) oral and implied agreements between Contour, Chic and Aspex.

The Chic-Aspex Agreement is a problematic source of license rights, though, because it was executed before Chic had any rights to the Patents-in-Suit. As a result, Plaintiffs are left to contend that the Chic-Aspex Agreement conveyed an exclusive license not only to rights relating to magnetic eyewear that Chic held on March 26, 1998, the day the Agreement was executed, but...