United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
CAROL E. JACKSON, District Judge.
Plaintiff RPM Ecosystems, LLC, brings this patent infringement action against defendants Lovelace Farms, Inc., and Wayne and Judy Lovelace. Defendants assert counterclaims for patent infringement and a declaration of non-infringement. The parties have filed cross-motions for summary judgment. Defendants included a challenge to plaintiff's standing to assert a patent infringement claim. The parties have provided supplemental briefing on the issue of standing and all issues are fully briefed.
Wayne Lovelace is an inventor of a patented method for accelerating the propagation of hardwood trees, known as the Root Production Method, or "RPM." United States Patent Number 7, 208, 775, Defs. Ex. A [Doc. #86-1]. In 2006, the Lovelace and Marshall families decided to join forces to promote RPM technology. To that end, on October 30, 2006, they signed a Memorandum of Agreement ("the Agreement"), pursuant to which the Lovelaces agreed to contribute the RPM technology and the Marshalls agreed to contribute capital to a new venture. Agreement, Comp. Ex. A [Doc. #2-2].
As contemplated by the Agreement, the Lovelaces and Marshalls formed three limited liability corporations: (1) RPM Technologies, LLC, which was formed to own and issue licenses for the technology; (2) RPM Holdings, LLC, which was established to own "special purpose companies;" (3) plaintiff RPM Ecosystems Ithaca, LLC, (the first of the three special purpose companies) which was formed to develop a nursery facility in Ithaca, New York. RPM Technologies was wholly owned by the Lovelaces; equity in RPM Holdings was split equally between the Marshalls and Lovelaces; Ecosystems was wholly owned by RPM Holdings and thus owned equally by the Marshalls and Lovelaces. Lovelace Farms, Inc. v. Marvin Marshall, 442 S.W.3d 202, 204 (Mo.Ct.App. 2014).
On October 30, 2007, RPM Technologies issued a license to Forrest Keeling Nursery, a business owned by Lovelace Farms. Pl. Ex. H [Doc. #80-1 at 46-55]. Broadly speaking, Forrest Keeling was granted exclusive rights to exercise the technology in 16 states, China, and other unspecified "foreign countries and territories." §§ 1.5, 2.1. Forrest Keeling also retained the right to serve its existing customers in Pennsylvania, and it was given a "terminable" right to develop and serve new customers everywhere in the United States and Canada, with the exception of the states in which Ecosystems had exclusive rights. §§ 1.6, 2.3, 2.4. As new Ecosystem nurseries were established and licensed, Forrest Keeling retained the right to serve its existing customers but was barred from soliciting new business in Ecosystem territories. § 3.2.
On November 7, 2007, RPM Technologies issued a Master License to RPM Holdings. The Master License provides the following:
Exclusive Grant. Master Licensor [RPM Technologies] hereby grants to Master Licensee [RPM Holdings] the exclusive... non-transferable, royalty-free right to make, have made, use, have used, reproduce, copy, have copied, modify, have modified, create derivative works from, market, advertise, display, distribute, have distributed, improve, license, sell, have sold, and import the Root Production Methodology (including all rights to propagate, grow, operate a nursery and sell nursery stock) and all other RPM Intellectual Property and improvements thereof in the Territory.
Master License Agreement at § 2.1, Comp. Ex. B [Doc. #2-3]. The "Territory" included the United States and Canada but excluded the territory separately granted to Forrest Keeling. Id. at §§ 1.4, 3.1. RPM Technologies retained title to the RPM intellectual property and all future improvements or modifications, and granted a license to RPM Holdings in all future patents and patent applications. Id. at §§ 4.1 and 5. RPM Holdings was granted the right to license the RPM intellectual property to others within the Territory. Id. at § 9. RPM Technologies agreed to prosecute all patent applications of the technology and, in the event it decided to abandon any patent application, give RPM Holdings the opportunity to take over the prosecution and assume title to the RPM intellectual property. Id. at § 13.
On April 17, 2009, RPM Holdings issued a "Sublicense" to plaintiff Ecosystems. Pl. Ex. K [Doc. #80-1 at 69-70]. The sublicense granted Ecosystems "the exclusive right to make, use and sell Licensed Products" in 14 states and Washington, D.C., and "the right to exercise all other rights granted to [RPM Holdings] under the Master License, subject to all obligations, conditions and restrictions set forth in the Master License, including the rights of Forrest Keeling Nursery as described therein."
In this action, the opposing parties each allege that the other sold products based on RPM-technology within its exclusive territory in violation of 35 U.S.C. § 271. In addition, plaintiff argues that the defendants made infringing sales in the exclusive territory of two later-established Ecosystems entities (Ecosystems Gulf Coast, LLC and Ecosystems Southeast, LLC) and, therefore, plaintiff is entitled to judgment on this claim as well.
"[B]efore a federal court can consider the merits of a legal claim, the person seeking to invoke the jurisdiction of the court must establish the requisite standing to sue." Whitmore v. Arkansas, 495 U.S. 149, 154 (1990). "[T]o assert standing for patent infringement, the plaintiff must demonstrate that it held enforceable title at the inception of the lawsuit." Tyco Healthcare Grp. LP v. Ethicon Endo-Surgery, Inc., 587 F.3d 1375, ...