Compound or Product, but only to the extent that said patents or the claims thereof cover the Compound or Product, their use, or a process for their manufacture." Although the definition of Patent Rights appears to include the rights to the BASF patents in suit (the BASF patents relate to and cover the manufacture or use of the Compound or Product), the definition of Patent Rights in the License Agreement is not the grant of rights to McNeil.
McNeil argues that its patent rights are not limited to the Product because the definition of Patent Rights include patents relating to the Compound as well as the Product. But the definitional paragraph regarding Patent Rights is not the paragraph granting rights to McNeil. Section 3.1, the section of the License Agreement that does grant rights, transfers rights to the Product not the Compound; that section transfers patent rights to the Compound only to the extent that "Product" includes the Compound by definition.
If the Product is narrower than the invention embodied by the patents in suit and if McNeil's rights are limited to that narrower category, then the License Agreement does not transfer the right to make, use, and sell all embodiments of the patented invention. The License Agreement defines the "Product" as the Compound formulated into microtablets in capsules conforming to the specifications and data analyses in Exhibit I as well as any improvement according to Section 6.8 of the License Agreement; the Agreement also provides that Exhibit I "shall be amended accordingly." Exhibit Ia specifies that each microtablet should contain 450-530 F.I.P.-U of lipase, a minimum of 360 F.I.P.-U of amylase, and a minimum of 22 F.I.P.-U of protease. Because the definition of the Product specifically incorporates the specifications of Exhibit I, the Product consists only of microtablets containing the potency ranges listed in Exhibit Ia.
Scandipharm has contended that the invention embodied by the patents -- a microtablet consisting "essentially of pancreatin" -- is broader than the Product which is limited to the various enzyme potency ranges as listed in Exhibit Ia.
McNeil has offered no evidence from which to conclude that the potency ranges listed in Exhibit Ia encompass all microtablets consisting essentially of pancreatin; the court concludes that the Product, microtablets with potency ranges listed in Exhibit Ia, is not as broad as the invention embodied by the patents.
Because the License Agreement transferred the right to make, use and sell only the Product, McNeil did not acquire the right to make, use or sell microtablets with potency ranges outside the limits described in Exhibit Ia and so did not acquire the full rights to make, use, and sell under the patents. Although the definition of Product expressly contemplates "improvements" to be incorporated as amendments to the specifications in Exhibit I to the License Agreement, there has been no amendment providing for a wider potency range for the Product than that specified in Exhibit Ia.
McNeil points to an amendment to the License Agreement stating that "the examples provided in the definition of the trademark under Article I are amended to: 'Pancrease MT 4', 'Pancrease MT 10', and 'Pancrease MT 16' . . . . This should not be construed as a limitation on the product strengths which McNeil may market in the Territory." Exhibit I to the License Agreement states that Pancrease MT 4 has an average of 13 microtablets per capsule, Pancrease MT 10 has an average of 33 microtablets per capsule, and Pancrease MT 16 has an average of 52 microtablets per capsule. These "examples" would seem to vary product strength by adjusting the number of microtablets per capsule, not by adjusting the strength of individual microtablets. McNeil has not established that these "examples" or any other provision in the amendment allow McNeil to vary the microtablet potency requirements of Exhibit Ia.
McNeil argues that KAG and McNeil believed that the License Agreement transferred an exclusive license to the entirety of the patents in suit to McNeil. See Pl. Ex. 9 at 165; Pl. Exs. 45, 46, 48, 50, 51. This argument is based on several documents and statements extrinsic to the License Agreement itself. The License Agreement clearly grants exclusive patent rights to make, use, and sell only the Product, not any microtablet containing pancreatin. Because the language of the License Agreement is unambiguous on this issue, extrinsic evidence of the intent of the parties is not admissible. See Linder v. Inhalation Therapy Services, Inc., 834 F.2d 306, 311 (3d Cir. 1987).
McNeil contends that even if the License Agreement grants the right to make, use, and sell only microtablets within a certain potency range, such an exclusive grant still allows McNeil to sue in its own name against those making, using, or selling allegedly infringing products within that range. However, the Supreme Court held in Pope Manufacturing Co. v. Gormully & Jeffery Manufacturing Co., 144 U.S. 248, 36 L. Ed. 423, 12 S. Ct. 643 (1892), that where a patent owner transferred only one of the patent's several claims, the transferee did not have standing to sue for infringement even for violation of the particular claim transferred.
A grant of patent rights restricted to a particular field of use does not confer standing on the transferee to sue potential infringers even within that particular field. See Etherington v. Hardee, 290 F.2d 28 (5th Cir. 1961); Channel Master Corp. v. JFD Electronics Corp., 260 F. Supp. 568, 571-72 (E.D.N.Y. 1966). But see Brunswick Corp. v. United States, 22 Cl. Ct. 278, 283 (1991) (an exclusive patent licensee under a use limitation has standing to sue for infringement where patent owner has actual notice of suit and refuses without any cause to join the action); Pratt & Whitney Co. v. United States, 139 Ct. Cl. 540, 153 F. Supp. 409, 411 (Ct. Cl. 1957) (exclusive licensee of patent for a limited use has the right to maintain an action in name of licensor for unlawful use of patent within the limited field, notwithstanding refusal of licensor to join the suit).
McNeil received rights to make, use, and sell only a portion of the inventions covered by the patent claims. If the right to one of several patent claims was not sufficient to confer standing in Pope, then rights to portions of claims are also insufficient.
4. Termination Clause
At the request of the court, the parties submitted supplemental briefs on the import of the License Agreement's termination clause on McNeil's standing. The Agreement lasts until December 31, 1998, on which date it is automatically renewed for two additional years unless terminated by either party with twelve months advance notice. License Agreement § 10.1. Either party may terminate the agreement on ninety days written notice of default by the other party if there is failure to cure the default within the ninety day period. License Agreement § 10.2(a). Either party may terminate the Agreement immediately if the Agreement becomes void or unenforceable as a result of governmental action, if unreasonable burdens or excessive liabilities are imposed on a party with respect to its performance, or if the other party is insolvent, bankrupt, or liquidated. License Agreement § 10.2(b), (c). KAG may terminate the Agreement if McNeil Pharmaceutical Division becomes unaffiliated with Johnson & Johnson. License Agreement § 10.2(d).
"An assignment of a patent 'may be either absolute, or by way of mortgage and liable to be defeated by non-performance of a condition subsequent . . . .'" Vaupel, 944 F.2d at 875 (quoting Waterman, 138 U.S. at 336). There is nothing to distinguish the termination provisions of this License Agreement from ordinary conditions subsequent; they do not prevent a transfer of rights from constituting an assignment. The termination provisions are not relevant and were not considered in determining McNeil's standing to maintain this action.
The significant restrictions on McNeil's right to transfer rights to the BASF patents and sue for infringement of those patents render the rights granted to McNeil a license rather than an assignment of patent rights; consequently, McNeil lacks standing to maintain this infringement action. McNeil did receive some exclusive rights to make, use, and sell under the patents in suit, but such rights were limited to the Product, which has a specific potency range; McNeil did not obtain the right to make, use, and sell all embodiments of the patented invention. This reenforces the conclusion that McNeil lacks sufficient patent rights to maintain this infringement action.
Defendant's Motion for Summary Judgment will be granted. An appropriate order follows.
AND NOW, this 2nd day of September, 1994, in consideration of defendant's Motion For Summary Judgment, plaintiff's response, defendant's reply, plaintiff's surreply, defendant's supplemental memorandum, plaintiff's supplemental memorandum, and defendant's response thereto, and after a hearing held on January 18, 1994, it is ORDERED that defendant's Motion for Summary Judgment is GRANTED.
Norma L. Shapiro, J.