from the United States District Court for the Southern
District of New York in Nos. 1:15-cv-04626-CM,
1:15-cv-04631-CM, 1:15-cv-04632-CM, Judge Colleen McMahon.
William Morris, Eckert Seamans Cherin & Mellott, LLC,
White Plains, NY, argued for plaintiff-appellant. Also
represented by Ojeiku Christopher Aisiku, Thomas Martin
Lyn Keefe, Cooley LLP, Palo Alto, CA, argued for all
defendants-appellees. Defendants-appellees HTC Corporation,
HTC America, Inc. also represented by Kyle Dakai Chen, Mark
A. Kaminski, Venable LLP, Washington, DC, for
defendants-appellees Blackberry LTD, Blackberry Corporation.
Also represented by William Dean Coston; Christopher T. La
Testa, Baltimore, MD.
Frederick Lee Whitmer, Kilpatrick Townsend & Stockton
LLP, New York, NY, for defendant-appellee Motorola Mobility
LLC. Also represented by Akarsh Belagodu, Washington, DC;
David Clay Holloway, Atlanta, GA; Steven Moore, San
Newman, O'Malley, and Reyna, Circuit Judges.
Video Technologies LLC appeals an order from the United
States District Court for the Southern District of New York
that dismissed its complaints for lack of standing. The
district court based its decision on the ground that a
co-owner of the patent was not a party to the actions, and
the co-owner's ownership interests in the patent were not
transferred to Advanced Video. We affirm.
appeal involves U.S. Patent No. 5, 781, 788 ("'788
patent"), entitled "Full Duplex Single Clip Video
Codec." The technology of the patent is not at issue.
The single issue involved in this appeal is whether a
co-inventor of the patent transferred her co-ownership
interests in the patent under the terms of an employment
'788 patent lists three co-inventors: Beng-Yu
"Benny" Woo, Xiaoming Li, and Vivian Hsiun. The
invention was created while the co-inventors were employed
with Infochips Systems Inc. ("Infochips"). Two of
the inventors, Mr. Woo and Ms. Li assigned their co-ownership
interests in the patent to Advanced Video. The only
co-ownership interests involved in this appeal are those of
Video maintains that it obtained Ms. Hsiun's co-ownership
interests in the invention through a series of transfers.
According to Advanced Video, the first transfer was made
before the '788 patent application was filed, pursuant to
a January 1992 Employment Agreement ("Employment
Agreement") between Ms. Hsiun and Infochips. The second
transfer occurred when Infochips' "receivables,
" which had been pledged as security in a financing
agreement between Infochips and an entity called Lease
Management Services, were seized by Lease Management when
Infochips went out of business in 1993. The third transfer
occurred in 1995 when Lease Management sold the Infochips
assets to Mr. Woo, one of the three co-inventors. A fourth
transfer occurred when Mr. Woo assigned his ownership
interest in the '788 patent to an entity called AVC
Technology Inc. ("AVC"). 
1995, AVC filed the parent application of the '788
patent. Two of the three inventors, Mr. Woo and
Ms. Li, executed assignments of their ownership interest in
the invention to AVC at that time. Ms. Hsiun, however,
refused to assign her interests. AVC filed a petition before
the U.S. Patent and Trademark Office ("PTO")
requesting that it be permitted to prosecute the application
without an assignment from Ms. Hsiun. In support, AVC filed a
declaration attaching the Infochips Employment Agreement and
financial documents between Info-chips and Lease Management
purporting to show that Mr. Woo and AVC had acquired Ms.
Hsiun's ownership rights. The PTO granted AVC's
petition and the '788 patent was issued to AVC. AVC was
later dissolved, but not before purporting to transfer its
assets to its successors, and ultimately, Advanced Video.
2011, Advanced Video filed three patent infringement lawsuits
against Appellees in the United States District Court for the
Southern District of New York. The district court found,
however, that AVC had failed to comply with Delaware
statutory law governing the distribution of assets for
dissolved corporations, and that no patent rights had
transferred from AVC to Advanced Video. Because Advanced
Video had no ownership interest in the patent, the cases were
dismissed for lack of standing. Advanced Video Techs.,
LLC v. HTC Corp., 103 F.Supp.3d 409 (S.D.N.Y.
2015, the Delaware Court of Chancery appointed a Receiver to
transfer to Advanced Video any patent rights held by AVC.
Advanced Video Techs. LLC v. HTC Corp., No. 15 Civ.
4626 (CM), 2016 WL 3434819, at *5-6 (S.D.N.Y. June 14, 2016).
After the transfer was achieved, Advanced Video filed three
new patent infringement lawsuits against Appellees. In
response to a motion to dismiss, Advanced Video argued before
the district court that it had acquired Ms. Hsiun's
ownership rights via the aforementioned series of transfers
beginning with a transfer from Ms. Hsiun to Infochips under
the terms of the Employment Agreement. According to Advanced
Video, the transfer was effected pursuant to three provisions
of the Employment Agreement: a "will assign"
provision, a trust provision, and a quitclaim provision. The
"will assign" and trust provisions provide as
I agree that I will promptly make full written disclosure to
the Company, will hold in trust for the sole
right and benefit of the Company, and will
assign to the Company all my right, title, and
interest in and to any and all inventions, original works of
authorship, developments, improvements or trade secrets which
I may solely or jointly conceive or develop or reduce to
practice, or cause to be conceived or developed or reduced to
practice, during the period of time I am in the employ of the
J.A. 258 (emphasis added).
quitclaim provision provides as follows:
I hereby waive and quitclaim to the Company
any and all claims, of any nature whatsoever, which I now or
may hereafter have infringement [sic] of any patents,
copyrights, or mask work rights resulting from any such
application assigned hereunder to the Company.
J.A. 260. (emphasis added).
district court concluded that these provisions did not effect
a transfer of Ms. Hsiun's ownership rights to Advanced
Video. As such, because Ms. Hsiun was not a party to the
suit, the district court dismissed the case for lack of
standing. Advanced Video appeals.
Standard of Review
court reviews de novo a district court's dismissal for
lack of standing. Isr. Bio-Eng'g Project v. Amgen
Inc., 475 F.3d 1256, 1262-63 (Fed. Cir. 2007); Prima
Tek II, L.L.C. v. A-Roo Co., 222 F.3d 1372, 1376 (Fed.
Cir. 2000). Factual findings relevant to a lack of standing
determination are reviewed for clear error. Enovsys LLC
v. Nextel Commc'ns, Inc., 614 F.3d 1333, 1340-41
(Fed. Cir. 2010).
Video argues that Ms. Hsiun's ownership rights
transferred immediately upon execution of the Employment
Agreement. In support, Advanced Video points to "will
assign" language contained in the agreement.
2.b of the Infochips Employment Agreement provides that Ms.
Hsiun "will assign to the Company" all her right,
title, and interest in any inventions. The district court
found that "will" invoked a promise to do something
in the future and did not effect a present assignment.
Advanced Video Techs., 2016 WL 3434819, at *8-9. The
court relied on Arachnid, Inc. v. Merit Industries,
Inc., 939 F.2d 1574, 1576 (Fed. Cir. 1991), which held
that "will be assigned" language in a consulting
agreement did not itself effect an assignment but was merely
a promise to assign. Id. at 1576, 1580-81. The
district court also reasoned that the trust provision of the
Employee Agreement undermined an immediate assignment because
Ms. Hsiun could not immediately assign the rights and at the
same time hold them in trust. Advanced Video Techs.,
2016 WL 3434819 at *9. We agree with the district court that
no present assignment exists in the Employment Agreement. The
"will assign" language alone does not create an
immediate assignment of Ms. Hsiun's rights in the
invention to Infochips.
Video argues that "will hold in trust" created an
immediate trust under California law in favor of Infochips.
Even were we to determine that Ms. Hsiun's interests in
the invention were immediately placed in trust, it does not
follow that those interests were automatically, or ever,
actually transferred out of trust in favor of Infochips.
Absent a transfer, Ms. Hsiun would continue to hold the
invention rights as a trustee. While Advanced Video could
potentially seek to enforce its alleged ownership rights, or
allege a breach of Ms. Hsiun's duties as a trustee by her
failure to transfer those rights, by bringing an action
against Ms. Hsiun, no party brought such an action. See,
e.g., Jim Arnold Corp. v. Hydrotech Sys., 109 F.3d 1567,
1578 (Fed. Cir. 1997) (stating that a party needs to file a
state-law based claim to obtain title to the patent before
bringing a patent infringement claim). Since Advanced Video
has not sought to enforce any obligation Ms. Hsiun might have
under the trust, it ultimately has no standing to bring a
patent infringement action. See Abraxis Bioscience, Inc.
v. Navinta LLC, 625 F.3d 1359, 1366 (Fed. Cir. 2010).
California trust law a trust beneficiary "generally is
not the real party in interest, " "may not sue in
the name of the trust, " and "has no legal title or
ownership interest in the trust assets." Saks v.
Damon Raike & Co., 8 Cal.Rptr.2d 869, 874-75
(Cal.Ct.App. 1992) (citing Botsford v. Haskins &
Sells, 146 Cal.Rptr. 752, 754 (Cal.App. 1978)). The
dissent cites Kadota Fig Association of Producers v.
Case-Swayne Co., 167 P.2d 518 (1946), for the
proposition that the real party in interest in California
trust disputes is actually the beneficiary, not the trustee.
Dissent at 6. Kadota does not apply, however,
because it involves a "business trust, " which,
under California law, is considered "a type of business
organization" and not the type of trust in this case.
Goldwater v. Olt-man, 292 P. 624, 627 (Cal. 1930).
Even if Advanced Video is correct that Ms. Hsiun's rights
are held in trust, Advanced Video, as a trust beneficiary,
cannot maintain a patent infringement suit where Ms. Hsiun is
not a party, nor can she as a co-owner of the patent be
involuntarily joined as a plaintiff, except under limited
circumstances which do not apply here.
Video maintains that it has standing because it eventually
acquired Ms. Hsiun's ownership interest in the invention
when she quitclaimed her interest to Infochips under the
terms of the Employment Agreement.
2.e of the Employment Agreement provides:
I hereby waive and quitclaim to the Company any and all
claims, of any nature whatsoever, which I now or may
hereafter have infringement [sic] of any patents, copyrights,
or mask work rights resulting from any such application
assigned here-under to the Company.
Video argues that "assigned hereunder" should
essentially be read to mean all claims "assignable
hereunder, " and that rights that Ms. Hsiun promised she
"will assign" were immediately quitclaimed under
the Employment Agreement. The Employment Agreement, however,
does not provide "assignable hereunder" language.
Advanced Video cites no authority showing that "assigned
hereunder" covers patent rights that could have been
assigned under a contract, but were never actually assigned.
quitclaim provision waives Ms. Hsiun's rights to
interests in any patent rights that she assigned under the
agreement. But, as no patent rights were ever assigned to
Infochips, the quitclaim provision has no application.
Accordingly, we find that the quitclaim provision in the
Employment Agreement did not effect an assignment of the
'788 patent from Ms. Hsiun to Infochips, AVC, or Advanced
dissent argues that it may be discerned from the Employment
Agreement that the parties intended any ownership interest in
inventions developed during Ms. Hsiun's employment with
Infochips were the property of Infochips. Dissent at 7-10.
But, the terms of the Employment Agreement provide otherwise.
Generally, courts should not deviate from unambiguous
provisions unless they lead to "absurd results."
Shaw v. Regents of Univ. of Cal., 67 Cal.Rptr.2d
850, 855 (Cal.Ct.App. 1997); see also Coast Plaza Doctors
Hosp. v. Blue Cross of Cal., 99 Cal.Rptr.2d 809, 815
(Cal.Ct.App. 2000). In this instance, the Employment
Agreement is unambiguous and, as stated, there is no reason
to believe that the parties intended a present assignment.
This court has previously found such agreements to assign
insufficient to confer standing. See IpVenture, Inc. v.
Prostar Comput., Inc., 503 F.3d 1324, 1327 (Fed. Cir.
Video does not have full ownership of the '788 patent.
Ms. Hsiun is neither a party to the suits, nor has she
consented to these suits. Advanced Video, therefore, has no
standing to maintain its suit. Accordingly, we affirm the
district court's dismissal of the cases.
O'Malley, Circuit Judge, concurring.
that we are bound to apply the law of this Circuit that
compels the result we reach today. I, thus, must concur in
that result. I write separately, however, to explain why I
continue to believe that the binding precedent which serves
as the predicate for today's majority opinion is wrong.
In particular, I address why the conclusion that a
non-consenting co-owner or co-inventor can never be
involuntarily joined in an infringement action pursuant to
Rule 19 of the Federal Rules of Civil Procedure is incorrect.
In the absence of that errant conclu- sion, the various
questions we address in this case would be irrelevant.
explained in my opinion dissenting from the denial of the
petition for rehearing en banc in STC.UNM v. Intel
Corp., 767 F.3d 1351 (Fed. Cir. 2014), several things
are clear about Rule 19. First, Rule 19(a)(1)(A) provides
that "[a] person who is subject to service of process
and whose joinder will not deprive the court of
subject-matter jurisdiction must be joined as a
party if in that person's absence, the court cannot
accord complete relief among existing parties."
Fed.R.Civ.P. 19(a)(1)(A) (emphasis added). Second, Rule 19,
like all other Federal Rules of Civil Procedure, is "as
binding as any federal statute." Stone Container
Corp. v. United States, 229 F.3d 1345, 1354 (Fed. Cir.
2000) ("[T]he Federal Rules of Civil Procedure, like the
Federal Rules of Criminal procedure, are 'as binding as
any federal statute.'" (quoting Bank of Nova
Scotia v. United States, 487 U.S. 250, 255 (1988)).
Third, again, like all other Rules of Civil Procedure, Rule
19 applies in patent cases just as fully as it applies in all
other federal civil actions. See, e.g., eBay
Inc. v. MercExchange, L.L.C., 547 U.S. 388, 393-94
(2006) (rejecting this court's attempt to develop a rule
regarding the right to injunctive relief "unique to
patent disputes, " holding that "the traditional
four-factor framework . . . governs the award of injunctive
relief"). And, finally, it is Rule 19-not substantive
judge-made laws governing joinder- that establishes the
criteria for assessing joinder. See Provident Tradesmens
Bank & Tr. Co. v. Patterson, 390 U.S. 102, 118 n.13
(1968) (citing with approval to a commentator who noted that
"there is no case support for the proposition that the
judge-made doctrines of compulsory joinder have created
substantive rights beyond the reach of the rulemaking
power" (quoting 2 Barron & Holtzoff, Federal
Practice & Procedure § 512, n.21.14 (1967 Supp.)
Judge Newman wrote in her opinion dissenting from the denial
of rehearing en banc in STC.UNM, "Rule 19 is
not permissive" despite this court's precedent that
"Rule 19 uniquely does not apply in patent cases."
767 F.3d at 1355 (Newman, J., dissenting). This precedent
represents a "further removal" of patent cases from
"the mainstream of the law." Id. Indeed,
the "unique exclusion of patent cases from Federal Rule
19 is as peculiar as it is unjustified, " for "[n]o
justification can be found for withdrawing or excluding the
co-owner of a patent from access to legal process."
Id. at 1356-57.
our precedent, Rule 19(a) provides for the involuntary
joinder of a necessary party. The rule states, in relevant
(a) Persons Required to be Joined if Feasible.
(1) Required Party. A person who is subject to
service of process and whose joinder will not deprive the
court of subject-matter jurisdiction ...