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License to litigate: Exclusive licensee may sue without patent owner

The US Court of Appeals for the Federal Circuit reversed dismissal of a patent and copyright infringement action, finding that an exclusive license remained in force, transferred all substantial rights in the asserted patents, and permitted the licensee to sue without joining the patent owner. TexasLDPC Inc. v. Broadcom Inc., Case No. 25-1074 (Fed. Cir. Sept. 14, 2026) (Moore, Chen, Bissoon).

TexasLDPC exclusively licensed a portfolio of low-density parity check (LDPC) technology patents and related copyrights from Texas A&M University. The agreement granted TexasLDPC broad rights to make, use, sell, sublicense, and enforce the licensed technology, as well as to recover damages for infringement. Texas A&M retained limited rights, including rights for research and educational purposes, certain rights associated with a preexisting Marvell license, and approval rights over assignment.

After TexasLDPC was unable to secure customers or sublicensees, it shifted its business toward patent and copyright enforcement and sued Broadcom, Avago, and LSI for infringement.

The district court dismissed the action on two grounds. First, it concluded that the exclusive license automatically terminated when TexasLDPC abandoned commercial development and became an enforcement-focused entity, reasoning that TexasLDPC had “cease[d] its business operations.” Second, the district court held that, even if the exclusive license remained in effect, TexasLDPC had not received all substantial rights in the asserted patents and therefore could not sue without joining Texas A&M, which had asserted sovereign immunity and refused to join the lawsuit. TexasLDPC appealed.

The Federal Circuit rejected both of the district court’s conclusions and reversed.

As to termination, the Federal Circuit found that patent enforcement qualified as a contemplated “business operation” under the agreement. Several provisions expressly treated enforcement as part of TexasLDPC’s “commercially reasonable efforts,” and the agreement separately granted TexasLDPC the right to bring infringement actions and retain infringement recoveries. The Court therefore concluded that TexasLDPC did not cease its business operations merely because it stopped pursuing commercialization and focused instead on enforcement.

The Federal Circuit next found that the agreement transferred all substantial rights in the asserted patents. Considering the agreement as a whole, the Court emphasized TexasLDPC’s exclusive rights to make, use, and sell licensed products; sublicense the technology; bring infringement actions; and collect damages without Texas A&M’s approval. Although Texas A&M retained certain rights, including limited practice rights and the ability to enforce against Marvell, the Court found those reservations insufficient to defeat TexasLDPC’s status as the holder of all substantial rights. TexasLDPC therefore had standing to sue in its own name without joining Texas A&M.

Finally, the Federal Circuit found that Texas A&M was not otherwise a required party under Rule 19. The district court had reasoned that Texas A&M’s absence could impair access to potentially relevant discovery. The Federal Circuit rejected that rationale, explaining that “Rule 19 is not a discovery tool.” The fact that an absent party may possess relevant evidence does not, standing alone, make that party necessary where the court can otherwise accord meaningful relief.

Back to the Future: Prior Third-Party Settlement Doesn’t Impact Future Trademark Licensees

The US Court of Appeals for the Eleventh Circuit ruled that under certain circumstances a trademark licensee can bring a claim against a third party for unfair competition under the Lanham Act even if the licensing agreement does not expressly authorize it to do so. Overhead Door Company of Kansas City v. OGD Equipment Company, LLC, Case No. 22-10985 (Fed. Cir. Aug. 22, 2023) (Branch, Brasher, JJ.; Winsor, Dist. J., sitting by designation).

This appeal involved three parties: D.H. Pace Company, Overhead Door Corporation and Overhead Garage Door (OGD). All three companies are involved in selling and servicing garage doors. Pace is a licensee of Overhead. Under its license, Pace is permitted to advertise and promote the trade name OVERHEAD DOOR COMPANY. OGD is a competitor of Overhead and Pace. Prior to the current appeal, Overhead and OGD had been involved in litigation involving OGD’s alleged trademark infringement and unfair trade practices, which resulted in a settlement. As a part of the settlement, OGD and Overhead could not bring suits against each other. However, the settlement terms were not expressly binding on any current or future licensees of Overhead.

In the current litigation, Pace filed suit against OGD for unfair competition in violation of § 43(a) of the Lanham Act, deceptive trade practices and various state trademark infringement violations. Pace alleged that OGD was leading consumers to believe that it was the same company as, or was affiliated with, Overhead (Pace’s licensor). In response, OGD moved for summary judgment, which the district court granted. The district court ruled that the licensing agreement between Pace and Overhead was a contractual bar to relief because the agreement did not affirmatively give Pace the right to sue. The district court also ruled that as a non-exclusive licensee, Pace lacked standing to bring its suit. The district court held that because Pace’s trademark rights were derived from a licensing agreement with Overhead, by discharging rights in the prior settlement with OGD, Overhead also discharged Pace’s right to sue.

Through a de novo review, the Eleventh Circuit disagreed with the district court’s grant of summary judgment against Pace. As the district court recognized, under § 43(a) of the Lanham Act, parties other than the owner of the mark can bring suit, but here the district court barred Pace’s claims based on the licensing agreement, Pace’s status as a non-exclusive licensee and the settlement agreement between OGD and Overhead. In reversing, the Eleventh Circuit held that none of these reasons was sufficient to bar Pace’s claims.

According to the Eleventh Circuit, the licensing agreement did not bar Pace from suing since there were no contractual term imposing a bar. While a licensee’s right to sue can be restricted, there was nothing in the licensing agreement at issue that limited Pace’s right to sue. The license agreement did not address trademark enforcement or either party’s ability to sue.

The Eleventh Circuit explained that the district court misread the Eleventh Circuit’s 2019 decision in Kroma Makeup v. Boldface [...]

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