by Kathleen Lynch | Jun 3, 2026 | Entrepreneur, Entrepreneurship, Infringement, Innovation, Intellectual Property, Invention, IP, IP Management, Licensing, Litigation, Patent, Protection, Small Business, Start Up, Start Up Considerations, Uncategorized
Can you license your technology to another company and accidentally lose your right to sue copycats? According to a recent decision by the Federal Circuit Court of Appeals (CAFC), the answer depends entirely on how carefully you draft your contract.
In ALM Holding Company & Ergon Asphalt & Emulsions, Inc. v. Zydex Industries, the CAFC reversed a district court’s dismissal of a patent infringement suit, delivering a crucial reminder to businesses about the fine print of intellectual property licensing.
The Case: A Question of Standing
The plaintiffs brought a patent infringement lawsuit against Zydex, but the district court threw the case out before it could even begin. Why? The court determined that the plaintiffs lacked constitutional standing to sue.
The district court reasoned that because the plaintiffs had granted an exclusive license for the subject patents to a third party, they no longer suffered a direct “injury-in-fact” from infringement. Even though the plaintiffs had retained certain rights, the lower court believed they had signed away too much control to seek legal redress.
However, the plaintiffs had been careful to retain three specific powers in their licensing agreement:
- The right to sue for infringement.
- The right to approve all sublicenses.
- The right to approve any assignment of rights by the licensee.
The CAFC Decision: Keeping a “Non-Illusory” Interest
The CAFC reversed the dismissal and sent the case back to the district court.
The appellate court found that because the plaintiffs had retained the right to sue and control sublicenses, they kept a sufficient exclusionary interest in the patents. In short: they retained enough skin in the game to maintain standing for an infringement action.
The Takeaway for Businesses
A patent owner’s core power is the right to exclude others from making, using, selling, or offering to sell their invention. When entering into exclusive license agreements, licensors must be incredibly strategic. If you do not carefully retain specific enforcement and approval rights, you risk accidentally stripping your business of the legal standing required to defend your own technology.
Guard Your Innovations with Expert Counsel
Capitalizing on innovative developments is critical to your organization’s growth—but protecting those assets requires foresight.
The Law Office of Kathleen Lynch PLLC is designed to help businesses like yours stay ahead of the game and navigate complex IP landscapes. Don’t leave your licensing agreements to chance.
- Ready to protect your IP? Your first consultation is entirely free.
- Get in touch: Email us today at kl****@*****aw.com to schedule your strategy session.
by Kathleen Lynch | Jul 14, 2015 | Innovation
A California jury awarded a cardiologist $200 million dollars against Boston Scientific. The jury heard the patent infringement and licensing lawsuit filed by Dr. David Jang who developed two cardiac stents for Boston Scientific. The jury found in favor of Dr. Jang and awarded him $200 million dollars in damages. The jury determined that the medical device company breached its contract with Dr. Jang and infringed two patent claims.
In 2002, Dr. Jang licensed two stent patents to Boston Scientific in exchange for $50 million upfront and an additional $110 million contingent on sales of stents that incorporate his patents. In 2005, Dr. Jang sued Boston Scientific for breaching the license agreement and claimed that Boston Scientific failed to make payments required by the terms of the agreement. Dr. Jang alleged the company owed him just under $100 million for using his patented products, and with interest at about 12 percent a year, would bring that amount to more than $200 million.
What’s the take away here? First, a patent is only as good as your ability to enforce it. Here, the good doctor was able to stand his ground against a large opponent and prevail. Second, your ability to prevail in an infringement action may take longer than you would ever want. But patience may be a virtue in patent infringement actions, especially if the facts favor your cause.
Protecting your innovative developments is critical to any organization. Having the right person to help you through that process is important. The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game. The first telephone consultation is free. Email us at kl****@*****aw.com.
by Kathleen Lynch | Jun 30, 2015 | Innovation, IP Management
Recently, the U.S. Supreme Court confirmed a lower court ruling for Marvel Entertainment relating to a patent royalty dispute for a Spider-Man toy. The majority, written by Justice Kagen, found that Marvel did not have to pay the agreed to royalties to the inventor of a web-shooting toy after the patent term expired. “Patents endow their holders with certain superpowers,” Kagan wrote, “but only for a limited time.”
The decision is a loss for the Spider-Man toy inventor Stephen Kimble. Mr. Kimble obtained the patent in 1990 for a toy that shoots foam string from a gloved hand, imitating the web spun by a spider person. Kimble sought to market the toy to Marvel’s predecessor, which at the time made its own “Web Blaster” toy without paying Kimble.
In 1997, Kimble sued Marvel and the parties settled for a fixed payment to Kimble, along with a 3 percent royalty on sales of the toy with no cutoff date. Marvel later sought a declaratory judgment that it no longer needed to pay royalties after the end of the patent term in 2010.
What’s the take away here? If you are entering into a license agreement for intellectual property rights, be sure to fully understand your obligations as well as your rights. Capitalizing on innovative developments is critical to any organization. Having the right person to help you make those decisions is important. The Law Office of Kathleen Lynch PLLC is designed to help businesses such as yours keep ahead of the game. The first telephone consultation is free. Email us at kl****@*****aw.com.
