Free Memorandum and Order - District Court of Delaware - Delaware

Case 1:O7—cv-OO190—SLR Document 98 Filed O3/07/2008 Page 1 of 4
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
SIEMENS MEDICAL SOLUTIONS )
USA, INC., )
)
Plaintiff, )
)
v. ) Civ. No. 07-190-SLR
)
SAINT-GOBAIN CERAMICS & )
PLASTICS, INC., )
>
Defendant. )
MEMORANDUM ORDER
At Wilmington this 7th day of March, 2008, having reviewed defendant’s motion
to dismiss and the papers submitted in connection therewith;
IT IS ORDERED that said motion (D.|. 66) is granted, for the reasons that follow:
1. Background. On or about February 1, 1995, Schlumberger Technology
Corporation ("STC") and plaintiffs predecessor-in-interest, CTI, Inc. ("CTI"), entered into
a license, entitled "Exclusive Patent and Technology License Agreement" (“the
License"). (D.|. 67, ex. A) Of importance to the dispute at bar are the following
provisions from the License:
2.2 Subject to the terms of this [License], and subject to the terms
and conditions contained herein, STC hereby grants to CTI and its
Affiliates an exclusive and non-transferable (except as otherwise
provided herein) right and license under the LSO Technology to
make and have made and use world-wide materials and methods
covered by such LSO Technology. CTI and its Affiliates are further
granted the right to sell world-wide such material and apparatus
containing such material subject to the restrictions contained

Case 1:07-cv-00190-SLR Document 98 Filed 03/07/2008 Page 2 of 4
herein.
2.4 The Parties agree that the STC Retained Uses[‘] are excluded from
the license rights as defined in this section 2.0.
9.0 Unlicensed Competition
9.1 STC and CTI agree to notify the other, where one or both of them
have knowledge, of a third party infringing one or more of the patents
specified in the LSO Patent Rights in any particular country where
CTI or its Affiliates are conducting Licensed Use under this
[License]. If STC has not caused such infringement to cease,
or if an infringement suit has not been filed against such identified
infringer by STC within a first three (3) month period after having
received notice, which date of receipt of notice will be provided in
writing to CTI by STC, CTI at its option may:
(a) have the Royalty Payments due hereunder to STC
discontinued for the particular country while the infringement
continues unchallenged; and/or
(b) file a lawsuit against the infringer and control the lawsuit
at its own expense and risk. In such case, and in that particular
country only, CTI or its Affiliates shall continue or resume to
pay to STC the Royalty Payments and STC agrees to join CTI
as a plaintiff if required by the law of that country and to assist
in the prosecution ofthe lawsuit.
(D.I. 67, ex. A) Schedule A to the License, which lists "Licensed Patents and Patent
Applications," includes U.S. Patent No. 4,958,080 ("the ‘080 patent"). (I;)
2. On or about April 3, 2007, plaintiff Siemens Medical Solutions USA, Inc.
("Siemens")2 filed the instant lawsuit asserting claims against Saint-Gobain Ceramics &
1"1.5 STC Retained Use means any and all uses of LSO, LSO Patents and
LSO Technology in the fields of oil well logging, logging-while-drilling or formation
evaluation, either in the form of apparatus or tools offered for sale or lease to third
parties or as a service performed on behalf of third parties."
2According to the complaint, in 2002, CTI merged with and into CTI Molecular
Imaging, Inc. ("C`l`lMl") and, effective as of June 1, 2002, CTIMI assumed all of CTl's
rights and obligations under the License to the ‘080 patent. In 2005, Siemens acquired
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Case 1:07-cv-00190-SLR Document 98 Filed 03/07/2008 Page 3 of 4
Plastics, Inc. ("Saint-Gobain") of inducing infringement and contributory infringement,
pursuant to 35 U.S.C. §§ 271 (b) and (c), respectively. This court has subject matter
jurisdiction over the dispute pursuant to 28 U.S.C. §§ 1331 and 1338.
3. The court entered a case management order on or about July 3, 2007. (D.I.
15) Saint-Gobain filed the instant motion to dismiss (D.|. 66) on or about December 6,
2007. According to a stipulation entered into by the parties and approved by the court,
the deadline forjoining parties and/or to amend the pleadings was extended to ten (10)
days following the court’s entry of a ruling on Saint—Gobain’s motion to dismiss. (D.|.
73)
4. Prudential standing to sue.3 "An exclusive licensee has standing to sue in
its own name, withoutjoining the patent holder, where ‘a|I substantial rights’ in the
patent are transferred." Gamco, Inc. v. Multimedia Games, Inc., 504 F.3d 1273, 1276
(Fed. Cir. 2007). In determining whether "all substantial rights" have been transferred,
the inquiry is a very practical one: Does suit by a licensee in its own name alone pose
a "substantiaI risk of multiple suits and multiple liabilities against an alleged infringer for
a single act of infringement"? S3 Q at 1278. If the license at issue “apportions the
subject matter of a patent," the risk of a multiplicity of lawsuits generally precludes
standing to a licensee. E Q at 1279.
5. Analysis. The License at bar requires Siemens to: (a) notify STC of an act
CTIMI and all of its business assets, including CTIM|’s rights and obligations under the
License to the *080 patent.
3Given the focus of the parties’ papers and the facts of record, the court finds
that Siemens has constitutional standing to sue under the license agreement at issue.
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Case 1:07-cv-00190-SLR Document 98 Filed 03/07/2008 Page 4 of 4
of infringement; and (b) give STC 90 days to institute suit against the alleged infringer.
lf STC does not timely file suit, Siemens may file a lawsuit against the infringer and
control the lawsuit at its own expense and risk. During the life of the lawsuit, STC will
not oppose joinder as a plaintiff if required to do so. While the License clearly gives
STC the exclusive right to sue during the first 90-day period, there is no specific,
reciprocal language giving Siemens the exclusive right to sue after the first 90-day
period. Moreover, it is evident that the License is a field of use license, one that
apportions the subject matter of the ‘080 patent as to LSO Technology between, on the
one hand, the fields of oil well logging, logging-while—driIIing or formation evaluation
(STC) and, on the other hand, all other uses of LSO Technology (Siemens).
6. Conclusion. Under all of these circumstances, the court concludes that the
License did not transfer "aII substantial rights" to Siemens. Siemens, therefore, does
not have standing to sue in its own name alone and Saint—Gobain’s motion to dismiss is
granted, subject to the following condition.
IT IS FURTHER ORDERED that plaintiff mayjoin STC as a plaintiff on or before
March 17, 2008. Failure to do so will result in dismissal ofthe case.
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