Uniloc 2017 LLC v. Paychex, Inc. (D. Mass. 19-cv-11272).

Judge Stearns granted Paychex’s motion to dismiss Uniloc’s patent infringement claims for lack of standing. Uniloc obtained the patents by assignment from IBM, but the assignment reserved to IBM the right to sublicense the patents to IBM’s strategic partners, which included customers of IBM or its subsidiaries that had purchased at least $10 million in products or services over the five years prior to the assignment. Paychex provided uncontroverted evidence that it met that criteria. While Paychex did not assert that IBM had, in fact, sublicensed the patents to Paychex, Judge Stearns noted that the mere ability to obtain a sublicense divests an exclusive licensee of standing because the exclusive licensee has no exclusionary right with respect to the accused infringer. He denied Paychex’s motion for fees, however, finding that the substantial amount of discovery required by Paychex to determine it had made the requisite volume of sales made Uniloc’s maintenance of the claim reasonable enough to not be exceptional.

This is the second such Uniloc case to be dismissed by judge Stearns on standing grounds. He granted Alamai’s similar motion just over a year ago.

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