The opinion of the court was delivered by: Hon. Rudi M. Brewster United States Senior District Court Judge
ORDER ON THE NON-JURY ISSUE OF STANDING REGARDING U.S. PATENT NO. 5,341,457
On January 29, 2007, a jury trial commenced in case no. 02cv2060 on issues pertaining to U.S. Patent Nos. 5,341,457 and RE 39,080 ("the '457 patent" and "the '080 patent," respectively). On February 22, 2007, the jury returned a verdict in favor of Lucent Technologies, Inc. ("Lucent") finding the patents valid and infringed by Defendant Microsoft Corporation ("Microsoft"). In addition to the affirmative defenses put before the jury, Microsoft raised a number of additional non-jury defenses regarding the patents. Several of these were decided as set forth in the Court's Orders of March 19 and 27, 2007. A remaining issue, Lucent's standing with respect to the '457 patent, is addressed herein.
When the '457 patent was issued in 1994, AT&T was the named assignee. In 1996, AT&T created Lucent as an independent entity. On March 29, 1996, AT&T and the newly created Lucent entered into a series of agreements that concerned the rights pertaining to the '457 patent. In the first of these agreements, AT&T transferred and assigned the entire right, title and interest in the '457 patent to Lucent. (Trial Ex. 1375.) In the second agreement, titled "Patent Assignment" (Trial Ex. 6711.) Lucent assigned "an undivided one-half (1/2 ) ownership interest" in the '457 patent back to AT&T subject to a separate Defensive Protection Agreement between Lucent and AT&T.*fn1 (Trial Ex. 6724; hereinafter "Defensive Agreement.")
The Defensive Agreement sets forth several provisions on licensing and enforcing the '457 patent with the intention of defining "the scope of their respective rights and obligations under such jointly owned patents." (Id. ¶ 6.) The period of the agreement ("Ownership Period") is ten years from the execution of the agreement (March 29, 1996 -March 29, 2006) or for the life of the patent, whichever expires first. (Id. § 1.4.)
On ownership, the Defense Agreement set forth:
2.1 Ownership Interest in Joint Patents. (a)(l) During the Ownership Period, the Parties shall each have an equal title interest in each Joint Patent, with AT&T holding an undivided one half (1/2) interest and LUCENT holding an undivided one half (1/2) interest.
(a)(2) Notwithstanding AT&T's ownership interest in Joint Patents under Section 2.1(a)(1), during the Ownership Period AT&T shall not assign its entire interest, or any portion thereof, in any Joint Patent to any third party without the express written consent of LUCENT. . . .
(b) At the expiration of the Ownership Period, AT&T shall, by separate instrument and without charge to LUCENT, assign to LUCENT all of AT&T's entire one half (1/2) ownership interest in Joint Patents. . . .
On the rights of each party, the Defensive Agreement states:
2.2 Rights of each Party under Joint Patents. AT&T and LUCENT shall each have, under Joint Patents, the rights to make, have made, use, lease, sell and import any products and services of their respective businesses in which they are now or hereafter engaged. Such rights shall also extend to AT&T's and LUCENT's Related Companies and Foreign Affiliates.
The Defensive Agreement addresses licensing by each party:
2.4 Licensing of Joint Patents for fields other than Telecommunications Services. LUCENT shall have all rights to grant nonexclusive licenses under Joint Patents to any Person for any grant area other than telecommunications services. AT&T hereby consents to the grant of such licenses by LUCENT and to LUCENT retaining ...