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Owner's Retention of Substantial Rights in Patents for Cochlear Implants

By FindLaw Staff on May 14, 2010 | Last updated on March 21, 2019

In Alfred E. Mann Found. for Scientific Research v. Cochlear Corp., No. 09-1447, the Federal Circuit faced a challenge to the dismissal of plaintiff's patent infringement suit, involving patents for cochlear implants, for lack of standing to sue on the ground that plaintiff's 2004 agreement with a third party (AB) granting an exclusive license to the patents at issue was a virtual assignment of the patents-in-suit. 

As stated in the decision: "While AMF's right to choose to sue an infringer does not vest until AB chooses not to sue that infringer, it is otherwise unfettered.  Once its right to sue an infringer activates, AMF can decide whether or not to bring suit, when to bring suit, where to bring suit, what claims to assert, what damages to seek, whether to seek injunctive relief, whether to settle the litigaiton, and the terms on which the litigation will be settled."

 Thus, in concluding that such a broad right to sue and control litigation is inconsistent with an assignment of the patents-in-suit to the third party, the court reversed the dismissal of the case as plaintiff is the sole owner of the patents-in-suit because it retained substantial rights in the patents, including the right to sue for infringement if the third party declines to do so.  

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