Fed. Circ. “Recalibrates” Analysis for Constitutional Standing

Director Richard Crudo spoke with Law360 on the Federal Circuit’s recent revival of the A.L.M. Holding Co.’s infringement suit against Zydex Industries Private Ltd. where they narrowed the distinction between constitutional and statutory standing

Crudo commented, “The decision clarifies that even though they are separate concepts, they have significant factual overlap,” he continued, “The same facts and evidence related for determining whether a plaintiff has transferred away all substantial rights can be the same or similar to the facts and evidence for determining whether the patentee has retained an exclusionary right. The case law governing the two forms of standing are no longer siloed.”

The Federal Circuit held that A.L.M.’s retained rights under its licensing agreement were sufficient to establish constitutional standing in the Zydex case. “[The Zydex decision] gives guidelines as to what you need to keep when you’re a patent owner that is seeking to preserve standing,” Crudo noted. “You need to keep some enforcement role, some control over sublicensing and a royalty flow that is tied to third-party use. If you keep those things in a license, Zydex says that you have constitutional standing.”

“I don’t think that the Zydex case creates new law per se, but what I would say is that it recalibrates how courts apply constitutional standing in patent cases and especially in the licensing context,” Crudo said.