United States District Court, D. Arizona
Plastronics Socket Partners Limited and Plastronics H-Pin Limited, Plaintiffs,
Highrel Incorporated, Hicon USA LLC, Dong Weon Hwang, and Paul Schubring, Defendants.
HONORABLE SUSAN M. BRNOVICH UNITED STATES DISTRICT JUDGE.
before this Court is a Motion to Dismiss Claims for Lack of
Subject-Matter Jurisdiction filed by Defendants HighRel, Inc.
(“HighRel”) and HiCon USA, LLC (“HiCon
“Defendants”). (Doc. 31, Mot.). Plaintiffs Plastronics
Socket Partners Limited and Plastronics H-Pin
Limited (“Plaintiffs” or
“Plastronics”) filed an opposition, (Doc. 43,
Resp.), and Defendants filed a reply, (Doc. 52, Reply).
Socket is a provider of technology and innovation for the
semiconductor industry, including burn-in sockets and related
components. (Doc. 11 ¶ 2, “FAC”). In 2003,
Defendant Dong Weon Hwang was an engineer based in Korea.
(FAC ¶ 36). In 2004, he joined Plastronics Socket as its
Chief Technology Officer (FAC ¶ 36). Before joining
Plastronics, Hwang had an idea for a new contact pin (the
“Invention”), which became the subject of U.S.
Patent No. 7, 025, 602 (the “'602 Patent”).
(FAC ¶¶ 9, 39). The '602 Patent was issued
April 11, 2006 and entitled “Contact for Electronic
Devices.” (FAC ¶ 9). On September 24, 2005, prior
to obtaining the patent, Hwang and Plastronics executed a
royalty agreement (the “Royalty Agreement”),
under which Plastronics agreed to pay for the development of
the Invention and worldwide patent rights where needed, and
Plastronics was to be assigned the patent jointly with Hwang.
(FAC ¶ 40). The Royalty Agreement also prohibited both
Plastronics Socket and Hwang from granting a license for the
Invention without approval from the other party. (FAC ¶
October 4, 2005, also prior to obtaining the patent, Hwang
and Plastronics Socket executed an assignment agreement,
assigning half of the right, title, and interest in and to
the Invention and any letters patent that may issue thereon
(the “Assignment and Agreement”). (FAC ¶
41). The other half was assigned to Hwang. (FAC ¶ 41).
Additionally, both Hwang and Plastronics Socket agreed to not
transfer any interest in or license the Invention without the
written consent of all Assignees. (FAC ¶ 42).
April 2008, Hwang decided to return to Korea and resigned his
position with Plastronics. (FAC ¶ 56). Also in April
2008, Hwang formed HiCon Ltd. to manufacture and sell
competing products. (FAC ¶ 57). On or about July 27,
2009, Hwang formed HiCon Co. to design and sell competing
products. (FAC ¶ 60). In 2016, Hwang and Defendant Paul
Schubring formed HiCon USA,  which signed an exclusive
distribution agreement with HiCon Ltd. and/or HiCon Co. for
the territory of North America. (FAC ¶ 65).
October 10, 2018, Plaintiffs filed their First Amended
Complaint (FAC) alleging counts of patent infringement
against Defendants HiCon USA and HighRel, as well as a count
of tortious interference with business expectancy,
prospective business relations. Plaintiffs also alleged
various counts against Defendants Hwang and Shubring, all but
one of which was dismissed by this Court's May 9, 2019
order, (Doc. 58). Defendants now move to dismiss, asserting
that Plaintiffs lack standing because this patent
infringement suit was not brought by both owners of the
patent. (Mot. at 2).
Federal Rule of Civil Procedure 12(b)(1), a party may move to
dismiss a claim for lack of subject-matter jurisdiction.
“A defect in standing is a defect in subject matter
jurisdiction, for ‘standing in its most basic aspect
can be one of the controlling elements in the definition of a
case or controversy under Article III.'”
Knowles Elecs. LLC v. Iancu, 886 F.3d 1369, 1380
(Fed. Cir. 2018) (quoting ASARCO Inc. v. Kadish, 490
U.S. 605, 613 (1989)). “The doctrine of standing limits
federal judicial power and has both constitutional and
prudential components.” Media Techs. Licensing,
LLC. v. Upper Deck Co., 334 F.3d 1366, 1369 (Fed. Cir.
2003). Constitutional standing requires that a plaintiff
suffer an injury-in-fact, that there be a causal connection
between the plaintiff's injury and a defendant's
conduct, and that the plaintiff's injury be capable of
redress by a favorable court decision. Lujan v. Defenders
of Wildlife, 504 U.S. 555, 560 (1992). “In
addition to the three-prong Article III standing test
delineated in Lujan, standing doctrine embraces
judicially self-imposed limits, known as prudential limits,
on the exercise of jurisdiction.” Intellectual
Prop. Dev., Inc. v. TCI Cablevision of Cal., Inc., 248
F.3d 1333, 1348 (Fed. Cir. 2001).
to sue for infringement stems from the Patent Act, which
provides: ‘[a] patentee shall have remedy by civil
action for infringement of his patent.'” Israel
Bio-Eng'g Project v. Amgen, Inc., 475 F.3d 1256,
1264 (Fed. Cir. 2007) (quoting 35 U.S.C. § 281).
“Where one co-owner possesses an undivided part of the
entire patent, that joint owner must join all the other
co-owners to establish standing.” Id.
“[O]ne co-owner has the right to limit the other
co-owner's ability to sue infringers by refusing to join
voluntarily in the patent infringement suit.”
Id. (citing Ethicon, Inc. v. U.S. Surgical
Corp., 135 F.3d 1456, 1468 (Fed. Cir. 1998) (holding
that “as a matter of substantive patent law, all co-
owners must ordinarily consent to join as plaintiffs in an
have, however, recognized at least two exceptions to the rule
that all co-owners must consent to join as plaintiffs in an
infringement suit. “‘First, when any patent owner
has granted an exclusive license, he stands in a relationship
of trust to his licensee' and can be involuntarily joined
as a plaintiff in the licensee's infringement
suit.” STC.UNM v. Intel Corp., 754 F.3d 940,
946 (Fed. Cir. 2014) (quoting Ethicon, 135 F.3d at
1468 n.9). Second, “[i]f, by agreement, a co-owner
waives his right to refuse to join suit, his co-owners may
subsequently force him to join in a suit against
infringers.” Id. (quoting Ethicon,
135 F.3d at 1468 n.9). Courts have also recognized a possible
third situation in holding that “an exclusive licensee
that does not have all substantial rights does have standing
to sue in his own name when ‘necessary to prevent an
absolute failure of justice, as where the patentee is the
infringer, and cannot sue himself.'” Textile
Prods., Inc. v. Mead Corp., 134 F.3d 1481, 1484 (Fed.
Cir. 1998) (quoting Waterman v. Mackenzie, 138 U.S.
252, 255 (1891)).
parties agree that Plastronics and Hwang retain equal shares
of all the rights in the '602 patent. (Mot. at 2) (Resp.
at 3). Therefore, the inquiry here is not one involving an
exclusive licensee, but rather two co-owners. Neither party
argues that Plastronics does not have constitutional standing
to sue. See Evident Corp. v. Church & Dwight
Co., 399 F.3d 1310, 1314 (Fed. Cir. 2005) (holding that
plaintiff with significant rights to the patent
“[c]learly . . . had constitutional standing to sue
under the patent”). The question is one of whether
Plastronics has prudential standing to bring a patent
infringement action without Hwang joined as a plaintiff. As
noted above, it is well-settled law that “[w]here one
co-owner possesses an undivided part of the entire patent,
that joint owner must join all the other co-owners to
establish standing.” Israel Bio-Eng'g
Project, 475 F.3d at 1264. Defendants argue that
Plaintiffs do not have standing for two reasons. First,
Defendants argue that Hwang's involvement as a defendant
does not confer standing. Second, Defendants argue that none
of the recognized exceptions to the rule that all co-owners
must be joined as plaintiffs apply to this action.
Hwang's Status as a Defendant Does ...