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   United States Court of Appeals for the Federal Circuit

                                           05-1066


                                  SICOM SYSTEMS LTD.,

                                                      Plaintiff-Appellant,

                                              v.


                              AGILENT TECHNOLOGIES, INC.,

                                                      Defendant-Appellee,

                                             and

                                     TEKTRONIX, INC.,

                                                      Defendant-Appellee,

                                             and

                                 LECROY CORPORATION,

                                                      Defendant-Appellee.




        Edward W. Goldstein, Goldstein & Faucett, LLP, of Houston, Texas, argued for
plaintiff-appellant. With him on the brief was Corby R. Vowell.

       James Galbraith, Kenyon & Kenyon, of New York, New York, argued for defendants-
appellees. With him on the brief were Philip J. McCabe, of San Jose, California and Susan
A. Smith, of Washington, DC. On the brief for Lecroy Corporation were Frank E.
Scherkenbach, Fish & Richardson, of Boston, Massachusetts and Timothy Devlin, of
Wilmington, Delaware; and Thomas H. Jenkins and Michael R. Kelly, Finnegan, Henderson,
Farabow, Garrett & Dunner, of Washington, DC for Tektronix, Inc. Of counsel for Agilent
Technologies, Inc. was John C. Vetter, Kenyon & Kenyon, of New York, New York.

Appealed from: United States District Court for the District of Delaware

Judge Joseph J. Farnan, Jr.
 United States Court of Appeals for the Federal Circuit

                                        05-1066


                               SICOM SYSTEMS LTD.,

                                                      Plaintiff-Appellant,

                                           v.

                          AGILENT TECHNOLOGIES, INC.,

                                                      Defendant-Appellee,

                                          and

                                  TEKTRONIX, INC.,

                                                      Defendant-Appellee,

                                          and

                              LECROY CORPORATION,

                                                      Defendant-Appellee.


                           __________________________

                           DECIDED: October 18, 2005
                           __________________________

Before MAYER, RADER, and PROST, Circuit Judges.

PROST, Circuit Judge.

      Plaintiff-Appellant Sicom Systems Ltd. (“Sicom”) appeals the dismissal of its

infringement action against Agilent Technologies, Inc. (“Agilent”), Tektronix, Inc.

(“Tektronix”), and LeCroy Corporation (“LeCroy”) (collectively “Appellees”) by the United

States District Court for the District of Delaware. Sicom Sys. v. Agilent Techs., No. 03-
1171-JJF (D. Del. Sept 30, 2004). On appeal, Sicom argues that the district court erred

in concluding that Sicom did not qualify as an “effective patentee” and therefore lacked

standing under the Patent Act to sue for infringement of U.S. Patent No. 5,333,147 (“the

’147 patent”) in this action. Because we hold that the assignor, “Her Majesty the Queen

in Right of Canada as represented by the Minister of Defence, Canada” (“Canada”), did

not convey all substantial rights in the patent to Sicom despite its conveyance to Sicom

of the exclusive right to sue for commercial infringement, we affirm.

                                   I. BACKGROUND

      The ’147 patent, entitled “Automatic monitoring of digital communication channel

conditions using eye patterns,” claims a type of digital signal transmission channel

monitor.   The patent issued on July 26, 1994, and was assigned to Canada.          On

January 19, 1998, Sicom executed a license agreement, covering the ’147 patent, with

the Canadian government (“Agreement”). The inventors of the ’147 patent are founding

members of Sicom who developed the technology through their own research in

connection with a contract with the Canadian government.          Under the Agreement,

Canada retained legal title to the ’147 patent and reserved the rights to: (1) continue

operating under the patented technology; (2) veto proposed sublicenses; (3) grant

contracts to further develop the ’147 patent; (4) sublicense any improvements or

corrections developed by Sicom; and (5) sue for infringement of the ’147 patent except

for “commercial infringement actions.” Additionally, Sicom could not assign its rights

without Canada’s approval, nor bring suit without first notifying Canada.

      On January 15, 2003, Sicom filed its first action for infringement of the ’147

patent against Agilent, LeCroy, and Tektronix. Canada declined to take part in the




05-1066                                     2
litigation and Appellees jointly filed a motion to dismiss this first action on the ground

that Sicom lacked standing to bring the suit. On November 20, 2003, the district court

granted Appellees’ first motion to dismiss, concluding that Canada had retained

substantial rights to the patent to a degree sufficient to bar Sicom from commencing an

action for infringement without the Canadian government. On December 18, 2003,

Sicom appealed that decision to this court, but withdrew that appeal on January 1,

2004. Sicom Sys. v. Agilent Techs., 87 Fed. Appx. 174 (Fed. Cir. 2004).

       On December 19, 2003, Sicom and the Canadian government executed an

amendment to their Agreement (“the Amendment”) granting Sicom the exclusive right to

sue for commercial infringement of the ’147 patent.        Specifically, the Amendment

granted to Sicom: (1) the exclusive right to “initiate commercial infringement actions”

related to the patent; (2) an extension of the term of the Agreement to coincide with the

term of the patent; and (3) an extension of Sicom’s right to initiate commercial

infringement actions after expiration of the patent. Sicom then filed a second suit on

December 30, 2003 against Appellees, who subsequently filed a second motion to

dismiss on February 20, 2004.

       The district court issued an order granting Appellees’ motion to dismiss on

September 30, 2004, dismissing the case with prejudice and thereafter issued a

Memorandum Opinion on October 5, 2004. Sicom Sys. v. Agilent Techs., No. 03-1171-

JJF (D. Del. Oct. 5, 2004) (“Sicom”). In its opinion, the district court concluded that

“Sicom does not possess the substantial rights necessary to be an ‘effective patentee’

for purposes of granting Sicom standing to sue for infringement of the ’147 patent.” Id.,

slip op. at 3-4.




05-1066                                     3
       The court was not persuaded that the Amendment granting Sicom “the exclusive

right to sue for commercial infringement” of the ’147 patent in the United States was

sufficient to establish that Sicom had all of the substantial rights in the patent necessary

to have standing in this suit. Id., slip op. at 4. “[T]his expansion of rights,” according to

the court, “does not grant Sicom the exclusive rights necessary to transform its license

into an assignment.” Id. “The qualifier of ‘non-commercial infringement’ contained in

the Amendment coupled with the provisions of Article 11, cl. 2 of the Agreement, still

give Canada the right to sue for any alleged infringement which is not commercial,” id.,

and “Canada may still be able to pursue non-commercial customers of Defendants like

governmental entities, the military and universities, thereby creating multiple risk of

litigation over the same patent, a result which is inconsistent with a genuine exclusive

right to sue.” Id.

       Additionally, the court noted that “the Amendment does not expressly grant

Sicom the right to sue for past infringement, and the Amendment is only effective as of

the date it was signed.”      Id.   It noted that under Article 11, Clause (1) of the




Agreement,1 “Sicom’s right to sue is still limited despite the Amendment, in that Sicom

(1) must notify Canada before bringing suit, (2) must consult with Canada for the



              1
                    Article 11, Clause (1) reads:
       In the event of any threatened or actual suit against the Licensee
       regarding an intellectual property infringement claim from any third party in


05-1066                                      4
purpose of jointly determining the steps to be taken in the event of actual or threatened

litigation, and (3) may not ‘make any admission of liability, nor offer or conclude

settlement’ without the prior written consent of Canada.” Id., slip op. at 5.

       The court also based its holding that Sicom lacked standing on “the restriction on

Sicom’s right to assign,” id., namely, “the Agreement’s provision that Sicom cannot

assign the ’147 patent without the written consent of Canada,” finding it to be a fatal

reservation of the right by Canada. Id., slip op. at 6 (citing Article 2, Clause (9) of the

Agreement).2       It concluded that “[b]ecause Sicom’s ability to assign the patent is

restricted, Sicom’s interest in the patent is limited to that of a licensee, and therefore,

Sicom does not have standing to bring an infringement lawsuit.” Id.

       Finally, the court addressed the issue of whether the action should be dismissed

with prejudice. It noted that “Sicom has not contested Defendants’ assertion that any



       consequence of the exercise of the right and licence granted herein or in
       the event of infringement of licensed rights by others:
             (a)     the Licensee shall promptly inform the Licensor;
             (b)     the Licensee shall not make any admission of liability nor
                     offer or conclude a settlement regarding such claim without
                     the prior written consent of the Licensor or as otherwise
                     provided in Clause (2) of this ARTICLE;
             (c)     the Parties will, for the purpose of jointly determining the
                     steps to be taken in the circumstances, consult with each
                     other and give to one another, free of charge, information or
                     advice;
             (d)     neither Party shall bind or commit the other Party to any
                     course of action which involves liability for legal costs,
                     expenses or damages unless jointly agreed upon in writing.
               2
                     Article 2, Clause (9) reads:
       Except as otherwise provided under this Agreement, the Licensee shall
       not, without the Licensor’s prior express written consent, assign, delegate,
       sub-license, pledge or otherwise transfer this Agreement, or any rights or
       obligations under it, to any person.



05-1066                                      5
dismissal by the Court of this action should be with prejudice, because Sicom has twice

attempted and twice failed to establish standing.”       Id.   The district court therefore

granted Appellees’ motion to dismiss the action with prejudice.         Thereafter, Sicom

appealed.

       This court has jurisdiction over this appeal under 28 U.S.C. § 1295(a)(1).

                                     II. DISCUSSION

                                 A. Standard of Review

       This court reviews jurisdictional questions, such as standing, de novo. Fieldturf

Inc. v. Sw. Recreational Indus., Inc., 357 F.3d 1266, 1268 (Fed. Cir. 2004).             “In

determining whether a dismissal should have been with or without prejudice, this court

applies the law of the pertinent regional circuit . . . .”          H.R. Techs., Inc., v.

Astechnologies, Inc., 275 F.3d 1378, 1383 (Fed. Cir. 2002).           In the Third Circuit,

dismissal with prejudice is reviewed under an abuse of discretion standard. Anderson

v. Aylins, 396 F.3d 265, 271 (3rd Cir. 2005).

                                   B. Standing to Sue

                                             1.

       The principal issue on appeal is whether the court erred in dismissing the case

for lack of standing.     Sicom argues that it had standing to sue for commercial

infringement of the ’147 patent under the Agreement and the Amendment and maintains

that whether an agreement is titled a “license” rather than an “assignment” is not

dispositive. Instead, it submits that “actual consideration of the rights transferred is the

linchpin in determining standing.” In this regard, Sicom argues that consideration of the

rights transferred shows that Sicom holds all the substantial rights in the ’147 patent,




05-1066                                      6
and that therefore, this court should determine that it had standing to sue Appellees.

Specifically, pointing to its exclusive right to sue commercial infringers, Sicom argues

that “[t]he grant of the right to sue infringers is particularly dispositive of the question of

whether a licensee holds all substantial rights because the ultimate question is whether

the licensee can bring suit on its own or whether the licensor must be joined as a party.”

       In response, Appellees argue that the district court correctly held that Sicom did

not have standing to sue for infringement of the ’147 patent because Sicom is not the

owner of the patent, the licensor of the patent, or the holder of all substantial rights of

the patent. Instead, Appellees argue, Sicom is a mere licensee of the patent, where the

licensor, Canada, retained the substantial rights to the patent. Appellees ask this court

to affirm the district court’s decision dismissing the action for lack of standing.

                                              2.

       Standing to sue is a threshold requirement in every federal action. Pfizer, Inc. v.

Elan Pharms. Research Corp., 812 F. Supp. 1352, 1356 (D. Del. 1993). Standing must

be present at the time the suit is brought. Procter & Gamble Co. v. Paragon Trade

Brands, Inc., 917 F. Supp. 305, 309-10 (D. Del. 1995). The party bringing the action

bears the burden of establishing that it has standing. Pfizer, 812 F. Supp. at 1356.

       The Patent Act provides that “[a] patentee shall have remedy by civil action for

infringement of his patent.” 35 U.S.C. § 281 (2000). The term “patentee” comprises

“not only the patentee to whom the patent was issued but also the successors in title to

the patentee.”    35 U.S.C. § 100(d) (2000).        However, if the patentee transfers all

substantial rights under the patent, it amounts to an assignment and the assignee may

be deemed the effective patentee under 35 U.S.C. § 281 for purposes of holding




05-1066                                       7
constitutional standing to sue another for patent infringement in its own name. Prima

Tek II, L.L.C. v. A-Roo Co., 222 F.3d 1372, 1377 (Fed. Cir. 2000); see also 35 U.S.C.

§ 261 (2000); Waterman v. Mackenzie, 138 U.S. 252, 256 (1891); Ortho Pharm. Corp.

v. Genetics Inst., Inc., 52 F.3d 1026, 1030 (Fed. Cir. 1995).

      Under 35 U.S.C. § 100, therefore, “[t]he owner of a patent or the owner’s

assignee can commence an action for patent infringement, but a licensee alone

cannot,” Calgon Corp. v. Nalco Chem. Co., 726 F. Supp. 983, 985 (D. Del. 1989),

unless the licensee holds “all substantial rights” in the patent, H.R. Techs., 275 F.3d at

1384.3 A nonexclusive license confers no constitutional standing on the licensee to

bring suit or even to join a suit with the patentee because a nonexclusive licensee

suffers no legal injury from infringement. Rite-Hite Corp. v. Kelley Co., Inc., 56 F.3d

1538, 1552 (Fed. Cir. 1995); Ortho, 52 F.3d at 1031. An exclusive licensee receives

more rights than a nonexclusive licensee, but fewer than an assignee. An example of

an exclusive licensee is a licensee who receives the exclusive right to practice an

invention but only within a given limited territory. Rite-Hite, 56 F.3d at 1552 (citing

Indep. Wireless Tel. Co. v. Radio Corp. of Am., 269 U.S. 459, 468-69 (1926)).

      While a licensee normally does not have standing to sue without the joinder of

the patentee (to prevent multiplicity of litigation), an exclusive license may be treated

like an assignment for purposes of creating standing if it conveys to the licensee all

substantial rights. Vaupel Textilmaschinen KG v. Meccanica Euro Italia SPA, 944 F.2d



      3
              At least one exception exists where “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 Prod., lnc. v. Mead Corp., 134 F.3d 1481, 1484 (Fed. Cir.
1998) (citations omitted).


05-1066                                     8
870, 875 (Fed. Cir. 1991). This court has defined “all substantial rights” as those rights

sufficient for the licensee or assignee to be “deemed the effective patentee under 35

U.S.C. § 281.” Prima Tek II, 222 F.3d at 1377. Each license and assignment is unique,

therefore this court “must ascertain the intention of the parties and examine the

substance of what [the licensing agreement] granted” to determine if it conveys all of the

substantial rights in the patent and is sufficient to grant standing to the licensee. Id. at

1358.

                                             3.

        This court has addressed the issue of whether an agreement transfers all or

fewer than all substantial patent rights in five recent cases. See Intellectual Prop. Dev.,

Inc. v. TCI Cablevision of Cal., Inc., 248 F.3d 1333 (Fed. Cir. 2001); Prima Tek II, 222

F.3d 1372; Textile Prods., 134 F.3d 1481; Abbott Labs. v. Diamedix Corp., 47 F.3d

1128 (Fed. Cir. 1995); Vaupel, 944 F.2d 870; see also H.R. Techs., 275 F.3d 1378;

Mentor H/S, Inc. v. Med. Device Alliance, 240 F.3d 1016 (Fed. Cir. 2001); Speedplay,

Inc. v. Bebop, Inc., 211 F.3d 1245 (Fed. Cir. 2000).

        In Intellectual Property, this court determined that Intellectual Property

Development, Inc. (“IPD”) was an exclusive licensee, not an assignee, having fewer

than all substantial rights in the patent at issue. 248 F.3d at 1345. The court noted that

the assignor, Communications Patents Ltd. (“CPL”), did not retain the right to “make,

use, and sell” the invention, which it granted to IPD, but found that “every other pertinent

factor weighs in favor of finding that the agreement is an exclusive license of fewer than

all substantial rights in the ’202 patent.” Id. at 1344. Specifically, the court concluded

that the agreement did not transfer the sole right to sue other parties for infringement to




05-1066                                      9
IPD, because the agreement “suffices to recognize that in certain circumstances—when

CPL is a ‘necessary’ party—CPL must consent to litigation and can withdraw that

consent at any time.”     Id.   The court additionally noted that “even if CPL is not a

‘necessary party’ to a suit, IPD must keep CPL fully informed, and consult with CPL, as

to any litigation pertaining to the patents at issue in the agreement.” Id. In Intellectual

Property, the court also relied on the fact that CPL retained the right to prevent IPD from

assigning its benefits to a third party, because “limits on the assignment of rights are a

factor weighing in favor of finding a transfer of fewer than all substantial rights.” Id.

       In Prima Tek II, the patent owner, Southpac International, Inc., granted the

licensee, Prima Tek I, “the exclusive, worldwide right to make, use and sell the products

and processes covered by the patents, but only to the extent necessary to grant a

license to Prima Tek II.” 222 F.3d at 1374. This court determined that Prima Tek I

lacked standing to sue for infringement without joinder of Southpac because the

licensing agreement did not transfer all substantial rights in the patents, even though

Prima Tek I had the sole and exclusive right to sue third parties for infringement and to

collect damages for past infringements, and Southpac was bound by any judgment

which may be rendered in any suit with respect to validity, infringement and

enforceability. Id. at 1382. The court based its decision on the fact that “Prima Tek I’s

right to exclude was explicitly defined—and then extinguished—by the sub-license to

Prima Tek II.” This court therefore determined that the license had a very limited scope

before the sub-license to Prima Tek II, which was to sub-license the patent, not to

“exclude others from making, using and selling the patented inventions.” Id. at 1380.

After the sub-license, Prima-Tek I had “no right to exclude others from practicing the




05-1066                                       10
patents because that right—to the extent that Prima Tek I ever possessed it—flowed to

Prima Tek II.” Id. The court concluded:

      Absent the right to exclude others from making, using and selling the
      patented inventions, Prima Tek I’s asserted role as “effective patentee” is
      doubtful. We are further troubled by the fact that the agreement gives
      Prima Tek I virtually no control over the ability to sub-license the patents.

Id. Regarding the remaining sub-licensees, this court held that “[s]ince the remaining

Appellees, Prima Tek II, HSC and HMSC, all derived their ownership interests in the

patents from Prima Tek I, they too lacked standing to sue in the district court without

being joined by the patent owner.” Id. at 1382.

      In Textile Products, this court affirmed the district court’s dismissal for lack of

standing. This court determined that the agreement transferred less than all substantial

rights in the patent to the licensee, Textile Productions, Inc., because it did not clearly

manifest a promise by the patent owner, Mead Corporation, to refrain from granting to

anyone else a license in the area of exclusivity. 134 F.3d at 1485. This court found that

the agreements at issue were “silent” as to the patent owner’s ability to grant further

licenses, and therefore, “this court must assume that Mead retained such rights.” Id.

Because “Mead retained the right to license third parties to manufacture the harness

[the patented product] for their own use or for sale to others,” this court held that it

retained important rights to the patent, and did not transfer all substantial rights to

Textile Productions, and therefore, Textile Productions did not have standing to sue for

infringement. Id.

      In Abbott Laboratories, this court determined that the transfer of certain patent

rights to Abbott constituted an exclusive license of fewer than all substantial patent

rights. In that case, Diamedix reserved the right to make and use the patented products



05-1066                                     11
for its own benefit and the right to sell those products to parties with whom Diamedix

had pre-existing contracts. 47 F.3d at 1132. Abbott was given the right of first refusal

to sue alleged infringers; however, Diamedix retained the right to bring its own

infringement actions, as well. Therefore, Abbott possessed the right to initiate suit for

infringement, but it could not indulge an infringement, which is a right that this court

found normally accompanies a complete conveyance of the right to sue. Id. In addition,

Diamedix retained the right to veto any assignment by Abbott of its rights under the

license to any party other than a successor in business. Id. This court lastly noted that

Diamedix appeared to retain the right to participate in a suit brought by Abbott, as well,

since the agreement in that case provided that Diamedix was “entitled to be represented

therein by counsel of its own selection at its own expense.” Id. Thus, this court held

that Abbott was granted fewer than all substantial rights under the patents. Id. at 1133.

      In contrast, in Vaupel this court determined that an agreement transferring

certain patent rights to Vaupel constituted an assignment of all substantial rights in the

patent. 944 F.2d 870. In that case, Markowsky retained a veto right on sublicensing by

Vaupel, the right to obtain patents on the invention in other countries, a reversionary

right to the patent in the event of bankruptcy or termination of production by Vaupel, and

a right to receive infringement damages. Id. at 875. However, in Vaupel, this court

found “particularly dispositive” the agreement provision that transferred the right to sue

for infringement of the patent at issue subject only to the obligation to inform

Markowsky. Id.

                                            4.




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       In this case, we must assess the Agreement at issue, weighing the rights in the

patent transferred to Sicom against those retained by Canada, to determine whether

Canada assigned all substantial rights in the patent, or fewer than all such rights.

Canada granted Sicom a license of the ’147 patent under the Agreement. Sicom is a

“sole” licensee, which the Agreement defines as having “the right to be the only

licensee” of the patent. However, Canada has reserved for itself the right to continue

operating under the patented technology, as well as a multitude of other rights,

including: the right to veto Sicom’s reassignment of its rights or proposed sublicenses;

the right to levy additional royalties or other consideration; the right to grant contracts

and sub-contracts to further develop the invention claimed in the patent; and the right to

offer sublicenses under any improvements or corrections developed by Sicom. See

Calgon, 726 F. Supp. at 988 (stating that “[j]ust as the right to alienate personal property

is an essential indicia of ownership, the right to further assign patent rights is implicit in

any true assignment”); see also Intellectual Prop., 248 F.3d at 1345; Pfizer, 812 F.

Supp. at 1373. Indeed, Canada also retained the right to sue for infringement other than

commercial infringement and it retained legal title to the patent.

       We agree with Sicom that an important substantial right is the exclusive right to

sue for patent infringement. Calgon, 726 F. Supp. at 986. This right is substantial

because the right to sue is the means by which the patentee exercises “the right to

exclude others from making, using, and selling the claimed invention.” Vaupel, 944

F.2d at 875.

       Although Sicom does have an exclusive right to sue for commercial infringement

under the Agreement and the Amendment, it is also true that a single infringer could be




05-1066                                      13
vulnerable to multiple suits for any non-commercial infringement. The scope of Sicom’s

right to sue is limited to “initiating commercial infringement actions.” Therefore, Sicom’s

exclusive right to sue for “commercial” infringement does not signify that Sicom has the

exclusive right to sue for all infringement. Indeed, Canada specifically retains the right

to sue for “non-commercial” infringement. Similarly, Sicom does not have the ability to

indulge infringement outside of the “commercial” sphere. See Abbott Labs., 47 F.3d at

1132 (noting that the licensee “does not enjoy the right to indulge infringements, which

normally accompanies a complete conveyance of the right to sue”).

       We find unpersuasive Sicom’s response that it is not suing Appellees’ customers,

nor suing for non-commercial infringement, and that this court should not consider risks

that are outside the scope of the facts in this case. Sicom’s focus on the parties in suit

is misplaced where this court has established that the intention of the parties to the

Agreement and the substance of what was granted are relevant factors in determining

whether all substantial rights in a patent were conveyed. See Prima Tek II, 222 F.3d at

1378. Additionally, we find that Sicom, in other respects as well, has failed to show that

it has all substantial rights under the patent. For instance, Sicom does not have the

right to settle litigation without the prior written consent from Canada, nor does Sicom

have the right to sublicense without Canada’s prior approval or to assign its rights. See

Intellectual Prop., 248 F.3d at 1345; Abbott Labs., 47 F.3d at 1132; Pfizer, 812 F. Supp.

at 1373 (finding that without a right to assign, the court “need look no further in

determining that [the licensor] reserved substantial rights under the Agreement”). As

the district court found, “the restriction on Sicom’s right to assign” was a “fatal

reservation of rights by Canada.” Sicom, slip op. at 5.




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       Moreover, Canada made further reservations. Under the Agreement, it reserves

the rights to: grant contracts and sub-contracts to develop the ’147 patent further; offer

sublicenses under any improvements or corrections that Sicom develops; veto any

sublicense; and levy additional royalties or other consideration. See Prima Tek II, 222

F.3d at 1380 (noting that the right to sublicense is an important consideration in

determining whether a license agreement transfers all substantial rights).           Finally,

Canada specifically retained legal title to the ’147 patent under the Agreement, which

states that “[t]itle to all rights of ownership in the Licensed Intellectual Property are and

shall remain with the Licensor.”

       In light of Canada’s right to permit infringement in certain cases, the requirement

that Sicom consent to certain actions and be consulted in others, and the limits on

Sicom’s right to assign its interests in the patent, we hold that the Agreement transfers

fewer than all substantial rights in the patent from Canada to Sicom. See Calgon, 726

F. Supp. at 986. Accordingly, we affirm the district court’s order dismissing Sicom’s

complaint. We stress the principle set forth in Independent Wireless requiring that a

patent owner be joined in any infringement suit brought by an exclusive licensee having

fewer than all substantial rights. 269 U.S. 459; see also Prima Tek II, 222 F.3d at 1377;

Textile Prods., 134 F.3d at 1484; Rite-Hite, 56 F.3d at 1552; Abbott Labs., 47 F.3d at

1131. Unlike an assignee who may sue in its own name, an exclusive licensee having

fewer than all substantial patent rights and seeking to enforce its rights in a patent

generally must sue jointly with the patent owner. Ortho, 52 F.3d at 1030. Thus, Sicom

does not have standing to sue alone without joinder of Canada under the Patent Act.

Calgon, 726 F. Supp. at 985 (“[T]he patent holder or assignee is a necessary party to an




05-1066                                      15
infringement action in order to achieve consistency of interpretation and to avoid

multiplicity of litigation. Under federal law, the patentee is the real party in interest in

such litigation.”).

                               C. Dismissal with Prejudice

       On appeal, Sicom additionally argues that the district court abused its discretion

in dismissing the case with prejudice. Sicom points out that “[d]ismissal for lack of

standing is usually without prejudice.” Sicom submits that dismissal with prejudice is

inappropriate here because Sicom is able to cure any defect in its standing “through

negotiations with the Canadian government.”

       In response, Appellees point out that Sicom failed to “raise this argument in the

district court, despite an opportunity to do so.” Appellees therefore argue that “Sicom’s

failure to raise this argument in the district court constitutes a waiver of that argument

on appeal.” They argue that “Sicom should not be permitted to obtain yet another minor

amendment to its license and bring yet another lawsuit.”

       We conclude that the district court did not abuse its discretion by dismissing this

case with prejudice. First, as the district court noted, this action was Sicom’s second

suit that was dismissed for lack of standing. Second, as the district court noted, “Sicom

has not contested Defendants’ assertion that any dismissal by the Court of this action

should be with prejudice, because Sicom has twice attempted and twice failed to

establish standing.”   Sicom, slip op. at 6.      Although Sicom correctly argues that

dismissal with prejudice is generally inappropriate where the standing defect can be

cured, Sicom already had a chance to cure the defect and failed. See Textile Prods.,




05-1066                                     16
134 F.3d at 1485. Accordingly, we affirm, holding that the district court was within its

discretion to dismiss the case with prejudice.

                                      CONCLUSION

      We affirm the district court’s order granting Appellees’ motion to dismiss and

dismissing the case with prejudice.

                                       AFFIRMED




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