throbber
Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 1 of 23 PageID #: 481
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`
`
`CLOUDING IP, LLC
`
`
`Plaintiff,
`
`
`v.
`
`EMC CORPORATION, EMC
`INTERNATIONAL U.S. HOLDINGS, INC.
`and VMWARE, INC.
`
`
`
`
`
`
`C.A. No.: 13-01455-LPS
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`
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`REDACTED PUBLIC VERSION
`
`
`Defendants.
`
`
`
`
`OPENING BRIEF IN SUPPORT OF DEFENDANTS EMC CORP.,
`EMC INTERNATIONAL U.S. HOLDINGS, INC. AND VMWARE, INC.’S
`MOTION TO DISMISS FOR LACK OF STANDING
`
`
`
`
`MORRIS, NICHOLS, ARSHT &
`TUNNELL LLP
`
`Jack B. Blumenfeld (#1014)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@mnat.com
`
`Attorneys for EMC Corp., EMC International
`U.S. Holdings, Inc. and VMware, Inc.
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`Of Counsel:
`ORRICK, HERRINGTON & SUTCLIFFE
`LLP
`Chris R. Ottenweller
`Karen G. Johnson-McKewan
`Bas de Blank
`Monte M. F. Cooper
`Stacey E. Stillman
`Jason K. Yu
`1000 Marsh Road
`Menlo Park, CA 94025
`Telephone: (650) 614-7400
`
`Paul T. Dacier
`Krishendu Gupta
`William R. Clark
`Thomas A. Brown
`EMC CORPORATION
`176 South Street
`Hopkinton, MA 01748
`
`Angela L. Padilla
`Jessica W. Rossman
`VMWARE, INC.
`3401 Hillview Avenue
`Palo Alto, CA 94304
`
`
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`1
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`EMC Ex. 1011
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`

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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 2 of 23 PageID #: 482
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`TABLE OF CONTENTS
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`Page No.
`I. NATURE AND STAGE OF THE PROCEEDINGS ............................................................1
`II. SUMMARY OF ARGUMENT ............................................................................................1
`III. STATEMENT OF FACTS RELATING TO STANDING. ...................................................2
`A.
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`. ...........................................................................2
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`B. CLOUDING IP LACKS MANY RIGHTS. .............................................................................5
`IV. LEGAL STANDARDS ........................................................................................................7
`A. RULE 12(B)(1). ..............................................................................................................7
`B. STANDING IN PATENT CASES. ........................................................................................8
`V. ARGUMENT .................................................................................................................... 10
`A. CLOUDING IP LACKS MANY KEY RIGHTS ASSOCIATED WITH PATENT OWNERSHIP. ....... 10
`B. LABELING THE PPA AN “ASSIGNMENT” DOES NOT CONFER STANDING. ....................... 15
`C. BECAUSE CLOUDING IP LACKS ALL SUBSTANTIAL RIGHTS IN THE PATENTS, IT
`CANNOT PURSUE THIS SUIT. ........................................................................................ 16
`VI. CONCLUSION ................................................................................................................. 16
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`i
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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 3 of 23 PageID #: 483
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`TABLE OF AUTHORITIES
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`Page(s)
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`Cases
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`Abbott Labs. v. Diamedix Corp.,
`47 F.3d 1128 (Fed. Cir. 1995)............................................................................ 11, 12, 13, 14
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`Alfred E. Mann Found. for Scientific Research v. Cochlear Corp.,
`604 F.3d 1354 (Fed. Cir. 2010) ..................................................................................... passim
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`Ballentine v. United States.,
`486 F.3d 806 (3d Cir. 2007) .................................................................................................. 7
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`Conte Bros. Auto. v. Quaker State-Slick 50, Inc.,
`165 F.3d 221 (3d Cir. 1998) .............................................................................................. 7, 8
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`Fieldturf v. Sw. Recreational Indus.,
`357 F.3d 1266 (Fed. Cir. 2004) ............................................................................................ 15
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`Intellectual Prop. Dev., Inc. v. TCI Cablevision of Cal.,
`248 F.3d 1333 (Fed. Cir. 2001) .................................................................................. 9, 14, 15
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`Morrow v. Microsoft Corp.,
`499 F.3d 1332 (Fed. Cir. 2007) .................................................................................... 7, 8, 10
`
`Petruska v. Gannon Univ.,
`462 F.3d 294 (3d Cir. 2006) .................................................................................................. 7
`
`Pfizer Inc. v. Elan Pharm. Research Corp.,
`812 F.Supp. 1352 (D. Del. 1993) ......................................................................................... 13
`
`PrimaTek II, L.L.C. v. A-Roo Co.,
`222 F.3d 1372 (Fed. Cir. 2000) .................................................................................. 9, 11, 12
`
`Propat Int’l. Corp. v. Rpost,
`473 F.3d 1187 (Fed. Cir. 2007) ................................................................................ 11, 12, 13
`
`Raber v. Pittway Corp.,
`23 U.S.P.Q. 2d 1313 (N.D. Cal. 1992)
`aff’d mem., 996 F.2d 318 (Fed. Cir. 1993) ........................................................................... 14
`
`Sicom Sys. Ltd. v. Agilent Techs., Inc.,
`427 F.3d 971 (Fed. Cir. 2005).................................................................................. 7, 8, 9, 13
`
`Waterman v. McKenzie,
`138 U.S. 252 (1891) .................................................................................................... 2, 9, 14
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`
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`ii
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`

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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 4 of 23 PageID #: 484
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`Statutes
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`35 U.S.C. § 281 ........................................................................................................................... 8
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`Other Authorities
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`Federal Rule of Civil Procedure 12(b)(1)............................................................................. 1, 2, 7
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`Federal Rule of Civil Procedure 12(b)(6)..................................................................................... 7
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`iii
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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 5 of 23 PageID #: 485
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`I.
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`NATURE AND STAGE OF THE PROCEEDINGS
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`Pursuant to Federal Rule of Civil Procedure 12(b)(1), Defendants EMC Corp., EMC
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`International U.S. Holdings, Inc. and VMware, Inc. (“Defendants”) have moved to dismiss the
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`Complaint on the ground that Plaintiff Clouding IP, LLC (“Clouding IP”) lacks standing because
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`it did not obtain all substantial rights in the patents-in-suit from Symantec Corp. (“Symantec”).
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`II.
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`SUMMARY OF ARGUMENT
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`The transaction between Clouding IP and Symantec is anything but a conventional sale of
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`patents. Clouding IP and Symantec
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`Clouding IP
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`contends that under the Patent Purchase Agreement Symantec transferred to Clouding IP all
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`right, title and interest in the asserted patents, but an examination of the agreement tells a far
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`different story.
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`In its responses to the Amazon and Google motions to dismiss, Clouding IP argued that
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`its standing to sue is unassailable because the Patent Purchase Agreement refers to a transfer of
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`ownership. But cases are legion — going back to Supreme Court precedent more than 100 years
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`1
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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 6 of 23 PageID #: 486
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`old — that standing depends on the substance of rights transferred and retained, not the labels
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`parties may attach to their transaction. See, e.g., Waterman v. McKenzie, 138 U.S. 252, 256
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`(1891) (“Whether a transfer of a particular right or interest under a patent is an assignment or a
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`license does not depend upon the name by which it calls itself, but upon the legal effect of its
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`provisions.”) (emphasis omitted).
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`Thus, in resolving the threshold issue of subject matter jurisdiction, the Court must look
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`beyond Clouding IP’s characterization and ascertain the true nature of what was conveyed to
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`Clouding IP, and what was not. Clouding IP bears the burden of establishing that it has “all
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`substantial rights” in the asserted patents. Given the multiple encumbrances on its rights, and the
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`key ownership rights it never received, Clouding IP cannot satisfy that burden. Pursuant to
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`Federal Rule of Civil Procedure 12(b)(1), its case should be dismissed because the Court lacks
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`subject matter jurisdiction.
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`III.
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`STATEMENT OF FACTS RELATING TO STANDING.
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`A.
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`The Enterprise Is Designed To Give Symantec Substantial Control Over The
`Enforcement Of The Patents.
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`Clouding IP is a non-practicing entity formed for the sole purpose of bringing patent
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`infringement lawsuits. It has no commercial business, makes no product, renders no services,
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`and contributes nothing to the economy by way of innovation. Clouding IP entered into
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`with Symantec, an Internet security and anti-virus software company,
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`1
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`1
`An entity called IP Navigation Group, LLC (“IPNav”), a large patent aggregator, is
`working behind the scenes as the licensing agent for Clouding IP. According to an article
`in the New York Times, IPNav’s business is to create and finance patent assertion entities.
`2
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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 7 of 23 PageID #: 487
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`See Ex. A at 1, 4. The extent of IPNav’s financial interest in the Clouding IP cases is
`unknown because both Clouding IP and IPNav have refused to provide discovery on this
`issue.
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`STEC IP subsequently
`changed its name to Clouding IP. This motion assumes, without conceding, that
`Symantec Corporation and/or Symantec International owned all rights in the patents-in-
`suit before February 2012.
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`3
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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 8 of 23 PageID #: 488
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`Clouding IP and Symantec
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`did record a Patent Assignment Agreement with the United States
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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 9 of 23 PageID #: 489
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`Patent Office purportedly summarizing their transaction.3
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`For example, paragraph 6 the Patent Assignment Agreement recites
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`that Clouding IP is to receive “all Income, royalties, damages and payments now or hereafter due
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`or payable” with respect to the assigned patents, suggesting this was an outright sale. Ex. B at
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`CLI_003954, Patent Assignment Agreement, ¶ 6 (emphasis added).
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` The Patent Assignment Agreement also
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`B.
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`Clouding IP Lacks Many Rights.
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`Given the structure of the enterprise, there are multiple rights a patent owner would
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`possess that Clouding IP simply does not have. These rights are described in the motions to
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`dismiss that Amazon and Google filed, but we list them here for the convenience of the Court.
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`3
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`entities and STEC IP, which subsequently changed its name to Clouding IP.
`5
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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 10 of 23 PageID #: 490
`Case 1:13-cv—01455-LPS Document 35 Filed 12/27/13 Page 10 of 23 PageID #: 490
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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 11 of 23 PageID #: 491
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`IV.
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`LEGAL STANDARDS
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`A.
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`Rule 12(b)(1).
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`Issues of standing are properly raised in a motion to dismiss pursuant to Federal Rule of
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`Civil Procedure 12(b)(1) for lack of subject matter jurisdiction. Ballentine v. United States., 486
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`F.3d 806, 810 (3d Cir. 2007). A Rule 12(b)(1) challenge to subject matter jurisdiction can be
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`“facial” or “factual.” Petruska v. Gannon Univ., 462 F.3d 294, 302 n.3 (3d Cir. 2006). In a
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`“facial” attack, the Court treats the allegations of the complaint as true, much like a Rule
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`12(b)(6) motion. Id. In a “factual” attack, however, the Court is free to consider matters outside
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`the pleadings and weigh the evidence. Id. When a plaintiff’s standing is challenged, it is
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`plaintiff’s burden to prove standing, not a defendant’s burden to disprove it. Id. (“Moreover, the
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`plaintiff will have the burden of proof that jurisdiction does in fact exist.”). Accord Sicom Sys.
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`Ltd. v. Agilent Techs., Inc., 427 F.3d 971, 976 (Fed. Cir. 2005) (“The party bringing the action
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`bears the burden of establishing that it has standing.”).
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`7
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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 12 of 23 PageID #: 492
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`B.
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`Standing in Patent Cases.
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`“Standing is comprised of both constitutional and prudential components.” Conte Bros.
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`Auto. v. Quaker State-Slick 50, Inc., 165 F.3d 221, 225 (3d Cir. 1998). Constitutional standing
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`requires that the plaintiff demonstrate that it suffered “injury in fact” that is “fairly traceable” to
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`the defendant’s conduct and likely to be redressed by a favorable decision. Id.; Morrow v.
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`Microsoft Corp., 499 F.3d 1332, 1338-39 (Fed. Cir. 2007). In addition, “[u]nder certain
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`circumstances, prudential, as opposed to constitutional, standing considerations limit a plaintiff’s
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`ability to bring suit.” Conte Bros., 165 F.3d at 225.
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`In the patent context, constitutional standing exists by virtue of the statutory grant of the
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`legal right to exclude others from making, using, and selling a patented invention. Morrow, 499
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`F.3d at 1339. Only those who hold all rights or “all substantial rights” in a patent can sue in their
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`own name:
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`There are three general categories of plaintiffs encountered when
`analyzing the constitutional standing issue in patent infringement
`suits: those that can sue in their own name alone; those that can sue
`as long as the patent owner is joined in the suit; and those that
`cannot even participate as a party to an infringement suit. The first
`category includes plaintiffs that hold all legal rights to the patent
`as the patentee or assignee of all patent rights—the entire bundle
`of sticks. . . . When a party holds all rights or all substantial
`rights, it alone has standing to sue for infringement.
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`Id. at 1339-40 (emphasis added); see also Alfred E. Mann Found. for Scientific Research v.
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`Cochlear Corp., 604 F.3d 1354, 1360 (Fed. Cir. 2010) (“When a sufficiently large portion of this
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`bundle of rights is held by one individual, we refer to that individual as the owner of the patent,
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`and that individual is permitted to sue for infringement in his own name.”). The Federal Circuit
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`has defined “all substantial rights” as those rights “sufficient for the licensee or assignee to be
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`‘deemed the effective patentee under 35 U.S.C. § 281.’” Sicom, 427 F.3d at 976. Where a
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`plaintiff holds some exclusionary rights but not all substantial rights to the patent, “these
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`8
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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 13 of 23 PageID #: 493
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`exclusionary rights must be enforced through or in the name of the owner of the patent, and the
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`patentee who transferred these exclusionary interests is usually joined to satisfy prudential
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`standing concerns.” Morrow, 499 F.3d at 1340 (internal quotations omitted).
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`Because “[a] patent is ‘a bundle of rights which may be divided and assigned, or retained
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`in whole or in part,’” courts must scrutinize each particular agreement to determine whether it
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`conveys all substantial rights under a patent so as to effect a transfer of title in the patent.
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`Intellectual Prop. Dev., Inc. v. TCI Cablevision of Cal., 248 F.3d 1333, 1342-44 (Fed. Cir.
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`2001); see also PrimaTek II, L.L.C. v. A-Roo Co., 222 F.3d 1372, 1378 (Fed. Cir. 2000) (“To
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`determine whether a license agreement has conveyed all substantial rights in a patent, and is thus
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`tantamount to an assignment, we must ascertain the intention of the parties and examine the
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`substance of what was granted. . . . In so doing, it is helpful to look at what rights were retained
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`by the grantor.”).
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`The title of the agreement, whether it is called a “license” or an “assignment,” “is not
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`determinative of the nature of the rights transferred under the agreement; actual consideration of
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`the rights transferred is the linchpin of such a determination.” Intellectual Prop. Dev., 248 F.3d
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`at 1344; see also Waterman, 138 U.S. at 256 (“Whether a transfer of a particular right or interest
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`under a patent is an assignment or a license does not depend upon the name by which it calls
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`itself, but upon the legal effect of its provisions.”) (emphasis omitted). Moreover, standing must
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`exist at the time of filing of the complaint. Sicom, 427 F.3d at 975-76. Accordingly, the Court
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`should “weigh[] the rights in the [patents in suit] transferred to [Clouding IP] against those
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`retained by [Symantec] to determine whether [Symantec] assigned all substantial rights in the
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`[patents-in-suit] to [Clouding IP] or conveyed fewer than all such rights.” Intellectual Prop.
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`Dev., 248 F.3d at 1344.
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`9
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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 14 of 23 PageID #: 494
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`In determining whether a plaintiff has obtained “all substantial rights” in a patent, the
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`courts examine how the parties to a transaction have divided up the bundle of rights in the
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`patents in suit. In Alfred E. Mann, 604 F.3d at 1354, 1360-61, the Federal Circuit listed many of
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`the rights that must be examined, including:
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` The exclusive right to make, use, and sell products under the patent;
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` The right to sublicense;
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` The circumstances in which the rights revert to the purported assignor;
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` The right of the purported assignor to receive a portion of the royalties;
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` The ability of a purported assignor to supervise and control the purported
`assignee’s activities; and
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` Restrictions on the assignee’s right to sell or transfer the patents.
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`V.
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`ARGUMENT
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`Of the three categories of plaintiffs identified in Morrow, 499 F.3d at 1339-40, Clouding
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`IP falls into the first: a party that sues in its own name claiming to possess “the entire bundle of
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`sticks.” But Clouding IP can make no credible claim that it possesses all rights in the patents-in-
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`suit. Among other things, it does not have the full right to
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`. Therefore, the issue is whether Clouding IP can demonstrate that it possesses “all
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`substantial rights” in the patents, a high standard to meet. As demonstrated below, Clouding IP
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`cannot satisfy its burden.
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`A.
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`Clouding IP Lacks Many Key Rights Associated with Patent Ownership.
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`Where parties have divided up the bundle of rights in patents asserted in litigation,
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`Federal Circuit precedent teaches that it is necessary to dissect the transaction to determine
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`which rights the plaintiff possesses in full, which rights the plaintiff lacks, and which rights are
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`10
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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 15 of 23 PageID #: 495
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`shared with the purported assignor. In the following chart we summarize the results of that
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`dissection in this case.
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`How the Bundle of Rights Was Divided Up
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`Right
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`Division
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`Support
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`Clouding IP
`makes no products or services.
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`Right to sell or transfer patents
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`See Propat Int’l. Corp. v. Rpost,
`473 F.3d 1187, 1191 (Fed. Cir.
`2007) (“The right to dispose of an
`asset is an important incident of
`ownership, and such a restriction
`on that right is a strong indicator
`that the agreement does not grant
`Propat all substantial rights under
`the patent.”).
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`Exclusive right to practice the
`patents
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`See Alfred E. Mann, 604 F.3d at
`1360 (“[T]ransfer of the exclusive
`right to make, use, and sell
`products or services under the
`patent is vitally important to an
`assignment.”); PrimaTek II, 222
`F.3d at 1379-80 (“In evaluating
`whether a particular license
`agreement transfers all substantial
`rights in a patent to the licensee,
`we pay particular attention to
`whether the agreement conveys in
`full the right to exclude others from
`making, using and selling the
`patented invention in the exclusive
`territory.”) (emphasis in original).
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`11
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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 16 of 23 PageID #: 496
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`Right
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`Division
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`Support
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`Right to indulge infringement
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`See Abbott Labs. v. Diamedix
`Corp., 47 F.3d 1128, 1132 (Fed.
`Cir. 1995) (“[T]he right to indulge
`infringements . . . normally
`accompanies a complete
`conveyance of the right to sue.”).
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`Right to license the patents
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`See Prima Tek II, 222 F.3d at 1380
`(“A licensee’s right to sub-license
`is an important consideration in
`evaluating whether a license
`agreement transfers all substantial
`rights.”).
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`Right to collect royalties
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`See Alfred E. Mann, 604 F.3d at
`1360-61 (noting the right “to
`receive a portion of the recovery in
`infringement suits” is among the
`“rights that should be examined” in
`determining ownership).
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`The reversionary right to
`terminate Clouding IP’s
`involvement
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`See Propat Intl’l Corp., 473 F.3d at
`1191-92 (“Authentix’s power to
`terminate the agreement and end
`all of Propat’s rights in the patent if
`Propat fails to perform up to the
`specified benchmarks, although not
`dispositive, is yet another
`indication that Authentix retains a
`significant ownership interest in
`the patent.”).
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`12
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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 17 of 23 PageID #: 497
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`Right
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`Division
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`Support
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`Obligation to pay patent
`maintenance fees
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`See Alfred E. Mann, 604 F.3d at
`1360-61.
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`When Clouding IP’s position is analyzed under Federal Circuit precedent, it is clear that
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`its package of rights does not rise to the level of all substantial rights. In Abbott, for example, the
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`Federal Circuit held that Abbott was not an assignee where Diamedix, the purported assignor,
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`retained rights to practice the patents for its own benefit, to prosecute its own infringement action
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`if Abbott declined to do so, and to prevent Abbott from assigning its rights under the agreement
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`to anyone other than a successor. 47 F.3d at 1132.
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`In Sicom the Federal Circuit affirmed this Court’s (Farnan, J.) holding that plaintiff
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`Sicom lacked standing because it had not received all substantial rights in a transaction with the
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`Government of Canada. 427 F.3d at 978-80. Among the rights Canada retained in the
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`transaction were the rights to continue practicing the patents, to veto Sicom’s disposition of the
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`patents, to grant sublicenses, and to sue for infringement other than commercial infringement.
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`Based on the significant rights retained by Canada, the Federal Circuit affirmed the holding that
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`Sicom had not received all substantial rights. Id. The Federal Circuit particularly endorsed this
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`Court’s holding that the restriction on Sicom’s right to sell or transfer the patents was a “fatal
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`reservation of rights by Canada.” Id. at 979.
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`13
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`

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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 18 of 23 PageID #: 498
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`A restriction on the right of alienation has lead to other holdings that a plaintiff lacks
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`standing. For example, in Propat Int’l. Corp., 473 F.3d at 1191, the Federal Circuit noted that
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`the purported licensor
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`could veto decisions by the purported licensee to
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`sell or transfer the patents. “The right to dispose of an asset is an important incident of
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`ownership, and such a restriction on that right is a strong indicator that the agreement does not
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`grant Propat all substantial rights under the patent.” Id. This Court made a similar ruling in
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`Pfizer Inc. v. Elan Pharm. Research Corp., 812 F.Supp. 1352, 1373 (D. Del. 1993). Noting that
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`Pfizer could not assign its interests in the patent-in-suit without written permission from Bayer,
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`the Court held that such a restriction was fatal to the argument that Pfizer had obtained all
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`substantial rights.
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`In Abbott the Federal Circuit also cited approvingly to a district court case
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`. See 47 F.3d at 1133 (citing Raber v. Pittway Corp., 23
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`U.S.P.Q. 2d 1313, 1314-15 (N.D. Cal. 1992)). In Raber, plaintiff Raber asserted that he had
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`obtained “complete title” to the asserted patent from assignor Cerberus under a document
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`recorded with the Patent Office. 23 U.S.P.Q.2d at 1314.
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`
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`the recorded assignment in Raber was
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`subject to an unrecorded side agreement prohibiting Raber from assigning his interest in the
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`patent without written consent from Cerberus; transferring back to Cerberus an irrevocable,
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`royalty-free license with the right to sublicense subsidiaries; and requiring Raber to pay Cerberus
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`one-half of all recoveries under the patent. Id. at 1313-14. The court concluded that Raber was
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`not the patent owner and lacked standing:
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`Because RABER’s interests in the Patent are not exclusive [due to
`Cerberus’s retained right to practice the patent] and because
`RABER does not have the right to assign his interests in the Patent
`without Cerberus’s written permission, Cerberus has not
`
`
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`14
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`

`

`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 19 of 23 PageID #: 499
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`transferred to RABER substantially all of its rights in the Patent.
`Therefore, RABER is a mere licensee, not an assignee, and he does
`not have standing to sue for infringement . . . .
`
`Id. at 1315, aff’d mem., 996 F.2d 318 (Fed. Cir. 1993).
`
`
`
`B.
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`Labeling the PPA an “Assignment” Does Not Confer Standing.
`
`.
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`Supreme Court and
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`Federal Circuit precedent that warns courts to heed substance over labels in determining whether
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`an agreement constitutes a patent assignment. See, e.g., Waterman, 138 U.S. at 256; Intellectual
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`Prop. Dev., 248 F.3d at 1344.
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`.
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`
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`In fact, there is only a single inquiry: the one who has or receives all substantial rights is the one
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`who holds title. See Alfred E. Mann, 604 F.3d at 1360 (“When a sufficiently large portion of
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`th[e] bundle of rights is held by one individual, we refer to that individual as the owner of the
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`patent . . . .”). Otherwise, there could be two entities with independent standing to sue—the
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`“title holder” and the “substantial rights holder”—in contravention of prudential standing
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`doctrine. See id. at 1359 (“[A] patent may not have multiple separate owners for purposes of
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`determining standing to sue.”).
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`Here, the labels in the PPA are entitled to even less weight because the PPA expressly
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`states that
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`15
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`

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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 20 of 23 PageID #: 500
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`C.
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`Because Clouding IP Lacks All Substantial Rights in the Patents, It Cannot
`Pursue This Suit.
`
`It bears repeating that Clouding IP bears the burden of proving that it possesses all
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`substantial rights in the patents. See Fieldturf v. Sw. Recreational Indus., 357 F.3d 1266, 1268
`
`(Fed. Cir. 2004) (holding that party asserting standing “has the burden to provide evidence
`
`endowing it with all substantial rights in the patent”).
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`
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`
`
`
`
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` That is the
`
`case here. Because Clouding IP received less than all substantial rights, it cannot meet its burden
`
`to establish standing.
`
`VI. CONCLUSION
`
`For the foregoing reasons, Defendants respectfully request that the Court dismiss this
`
`case for lack of subject matter jurisdiction.
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`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`
`/s/ Paul Saindon
`
`
`
`
`Jack B. Blumenfeld (#1014)
`Paul Saindon (#5110)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@mnat.com
`psaindon@mnat.com
`Attorneys for Defendant
`
`16
`
`

`

`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 21 of 23 PageID #: 501
`
`
`Of Counsel:
`ORRICK, HERRINGTON & SUTCLIFFE
`LLP
`Chris R. Ottenweller
`Karen G. Johnson-McKewan
`Bas de Blank
`Monte M. F. Cooper
`Stacey E. Stillman
`Jason K. Yu
`1000 Marsh Road
`Menlo Park, CA 94025
`Telephone: (650) 614-7400
`
`Paul T. Dacier
`Krishendu Gupta
`William R. Clark
`Thomas A. Brown
`EMC CORPORATION
`176 South Street
`Hopkinton, MA 01748
`
`Angela L. Padilla
`Jessica W. Rossman
`VMWARE, INC.
`3401 Hillview Avenue
`Palo Alto, CA 94304
`
`
`Dated: December 20, 2013
`
`
`
`
`
` OHSUSA:755797603.9
`
`
`17
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`

`

`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 22 of 23 PageID #: 502
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`CERTIFICATE OF SERVICE
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`I hereby certify that on December 20, 2013, I caused the foregoing to be
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`electronically filed with the Clerk of the Court using CM/ECF, which will send notification of
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`such filing to all registered participants.
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`I further certify that I caused copies of the foregoing document to be served on
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`December 20, 2013, upon the following in the manner indicated:
`
`Richard D. Kirk, Esquire
`Stephen B. Brauerman, Esquire
`Vanessa R. Tiradentes, Esquire
`BAYARD, P.A.
`222 Delaware Avenue, Suite 900
`Wilmington, DE 19801
`Attorneys for Clouding IP, LLC
`
`Marc. A. Fenster, Esquire
`Dorian S. Berger, Esquire
`Brian Ledahl, Esquire
`RUSS, AUGUST & KABAT
`12424 Wilshire Boulevard, 12th Floor
`Los Angeles, CA 90025
`Attorneys for Clouding IP, LLC
`
`
`
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`
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`VIA ELECTRONIC MAIL
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`VIA ELECTRONIC MAIL
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`
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`/s/ Paul Saindon
`Paul Saindon (#5110)
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`Case 1:13-cv-01455-LPS Document 35 Filed 12/27/13 Page 23 of 23 PageID #: 503
`
`
`CERTIFICATE OF SERVICE
`
`
`
`I hereby certify that on December 27, 2013, I caused the foregoing to be electronically
`
`filed with the Clerk of the Court using CM/ECF, which will send notification of such filing to all
`
`registered participants.
`
`
`
`
`
`I further certify that I caused copies of the foregoing document to be served on
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`December 27, 2013, upon the following in the manner indicated:
`
`VIA ELECTRONIC MAIL
`
`VIA ELECTRONIC MAIL
`
`
`
`
`
`/s/ Paul Saindon
`
`
`
`
`Paul Saindon (#5110)
`
`
`
`
`
`
`
`Richard D. Kirk, Esquire
`Stephen B. Brauerman, Esquire
`Vanessa R. Tiradentes, Esquire
`BAYARD, P.A.
`222 Delaware Avenue, Suite 900
`Wilmington, DE 19801
`Attorneys for Clouding IP, LLC
`
`Marc. A. Fenster, Esquire
`Dorian S. Berger, Esquire
`Brian Ledahl, Esquire
`RUSS, AUGUST & KABAT
`12424 Wilshire Boulevard, 12th Floor
`Los Angeles, CA 90025
`Attorneys for Clouding IP, LLC
`
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`

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