Indianapolis, Indiana – Endotach LLC of Plano, Texas sued Cook Medical Inc. of Bloomington, Indiana alleging infringement of Endovascular Bypass Graft, U.S. Patent No. 5,122,154 (the “‘154 patent”) and Endovascular Stent with Secure Mounting Means, U.S. Patent No. 5,593,417 (the “‘417 patent”; collectively, the “Rhodes patents”) issued by the U.S. Patent Office. Endotach filed its complaint in the Northern District of Florida. The case was transferred to the Southern District of Indiana upon Cook’s request.
The patents at issue, both of which were issued in the 1990s, were granted to Dr. Valentine Rhodes, an award-winning surgeon who practiced in the field of vascular medicine for over 30 years. The patents are directed to intraluminal and endovascular grafts for placement within a blood vessel, duct or lumen to hold it open. As it pertains to this lawsuit, the patents-in-suit are used for revascularization of aneurysms or stenosis occurring in blood vessels which includes anchoring projections to aid in securing the graft in place within the blood vessel.
Upon the death of Dr. Rhodes, the patents-in-suit passed as part of his estate. Dr. Rhodes’ Will bequeathed all “tangible personal property” to his wife, Brenda Rhodes (“Mrs. Rhodes”). However, there was no specific bequest of the Rhodes patents or mention of any intangible property. The Will’s residuary clause bequeathed “all the residue of [Dr. Rhodes’] estate, real and personal” to a Trust (the “Rhodes Trust”). Upon Dr. Rhodes’ death, his two daughters and Mrs. Rhodes became Co-Trustees of the Trust.
In November 2009, Mrs. Rhodes executed a document entitled “Exclusive License Agreement,” listing herself as the “patent owner.” The agreement purported to transfer an exclusive license on the ‘417 patent to Acacia Patent Acquisition LLC. That license was later assigned to Endotach and amended to include the ‘154 patent.
Endotach sued Cook in July 2012 asserting infringement of one or more claims in each of the patents-in-suit. In that complaint, it asserted that Mrs. Rhodes owned the patents-in-suit and that, as a result of the exclusive license Mrs. Rhodes had granted, Endotach had the right to enforce the patents against all infringers.
Cook moved to dismiss the lawsuit for lack of subject matter jurisdiction arguing that Endotach did not have standing to bring suit. On July 12, 2013, presumably in response to the motion, an “amendment” to the exclusive licensing agreement transferred an exclusive license on the Rhodes patents to Endotach from the Rhodes Trust. It was signed by Mrs. Rhodes and the other Co-Trustees.
In this opinion, Senior Judge Larry J. McKinney addressed Cook’s contention that Endotach did not have standing to sue. The court concluded that Endotach did lack standing as Mrs. Rhodes did not have any individual property interest in the Rhodes patents at the time that she purported to convey an exclusive license. The court dismissed Endotach’s lawsuit without prejudice.
Practice Tip #1: The principle of standing that is important in this case is whether or not Endotach had any legal rights and interests to the Rhodes patents at the time it filed suit. While there are some exceptions, in general, a plaintiff may not sue to assert rights held by third parties.
Practice Tip #2: Apparently realizing that the earlier effort to convey the license might be successfully challenged (as it was) and the case dismissed as a result (as it was), an additional complaint was filed on July 16, 2013, shortly after a new attempt was made to convey to Endotach an exclusive license to the patents-in-suit, this time by the Rhodes Trust. See here.