A.L.M. Holding Company v. Zydex Industries Private Ltd.

Court of Appeals for the Federal Circuit·Decided May 19, 2026·No. 25-1317·Published

Opinion

United States Court of Appeals for the Federal Circuit

A.L.M. HOLDING COMPANY, ERGON ASPHALT & EMULSIONS, INC., Plaintiffs-Appellants

v.

ZYDEX INDUSTRIES PRIVATE LTD., ZYDEX INC., Defendants-Appellees

2025-1317

Appeal from the United States District Court for the District of Delaware in No. 1:24-cv-00363-JPM, Judge Jon P. McCalla.

Decided: May 19, 2026

JOSEPH DIEDRICH, Husch Blackwell LLP, Washington, DC, argued for plaintiffs-appellants. Also represented by JEFFER ALI, Minneapolis, MN; STEPHEN REID HOWE, Milwaukee , WI.

EDWARD TULIN, Gish PLLC, New York, NY, argued for defendants-appellees. Also represented by RAYMOND JOHNSON BILDERBECK, ANDREW GISH, CONOR MCDONOUGH.

Before CHEN, CUNNINGHAM, and STARK, Circuit Judges.

2 A.L.M. HOLDING COMPANY v. ZYDEX INDUSTRIES PRIVATE LTD.

CHEN, Circuit Judge.

A.L.M. Holding Company (A.L.M.) and Ergon Asphalt & Emulsions, Inc. (Ergon) (collectively, Plaintiff) appeal from a decision of the United States District Court for the District of Delaware dismissing their patent infringement suit against Zydex Industries Private Ltd. and Zydex Inc. (collectively, Defendant) for lack of constitutional standing. A.L.M. Holding Co. v. Zydex Indus. Priv. Ltd., No. 1:24-cv- 00363-JPM, 2024 WL 5276676, at *1 (D. Del. Nov. 25, 2024) (Decision). Prior to filing suit, Plaintiff licensed several rights under the asserted patents to an exclusive licensee but retained others, including the right to sue third parties for patent infringement, a right that was not rendered illusory by the rights granted to the licensee. Because Plaintiff retained an exclusionary right sufficient to satisfy the “irreducible constitutional minimum of standing ,” we reverse and remand.

BACKGROUND

A. The Patent License Agreement A.L.M. and Ergon are joint owners of the six patents-

in-suit, which relate to warm-mix asphalt paving methods and compositions. 1 On January 1, 2008, Plaintiff entered into an agreement (the Agreement) licensing certain rights in the Asserted Patents to MeadWestvaco Corporation (MWV), a manufacturer and seller of asphalt additives. In 2015, after a corporate merger and reformation, Ingevity Corporation (Ingevity) replaced MWV as the licensee.

Under the Agreement, Plaintiff granted Ingevity an “exclusive,” “royalty-bearing, worldwide license” to

1 The patents-in-suit are U.S. Patent Nos. 7,815,725;

7,981,466; 9,394,652; 10,214,646; 8,734,581; and 9,175,446 (collectively, Asserted Patents).

A.L.M. HOLDING COMPANY v. ZYDEX INDUSTRIES PRIVATE LTD. 3

“manufacture, have manufactured, import, use, sell, offer to sell and otherwise commercialize Licensed Products.” J.A. 81, ¶ 2.1. If Ingevity fails to pay Plaintiff guaranteed “minimum annual royalty amounts,” then the “license shall become non-exclusive.” Id.; see id. at 83–84, ¶ 3.1; id. at 85, ¶ 3.4.

In the event of any third-party patent infringement, the Agreement provides for shared control of any infringement suit between Plaintiff and Ingevity. “If any unlicensed third party” practices the patents, then Plaintiff and Ingevity “shall mutually determine whether to pursue such infringement.” Id. at 87, ¶ 5.1. If the parties decide to jointly pursue legal action, then they “split 50:50” both the costs and damages recovered. Id. If either party elects not to pursue infringement, the other party may bring suit independently. Id. ¶ 5.2. When a single party prosecutes infringement, that party “will control the conduct of the legal action, keep the non-initiating Party advised of its progress , and will retain for itself any damages recovered or obtained in the legal action.” Id.

The Agreement also limits Ingevity’s ability to transfer its rights. Before Ingevity may sublicense patent rights, it must “provide[] the terms and conditions of any such sublicense ” to Plaintiff “for their prior review and approval” which “shall not be unreasonably withheld.” Id. at 81, ¶ 2.3. “Sales made by a sublicensee shall be reported and royalty paid to [Plaintiff] as if [Ingevity] had made such sale.” Id. The Agreement also provides that “[t]he obligations in this Agreement shall be binding on any sublicensee as if it were a Party hereto.” Id.

Likewise, before making any assignment under the Agreement, Ingevity must obtain “written permission” from Plaintiff, “not to be unreasonably withheld.” Id. at 93, ¶ 11.4. This right “otherwise may only be assigned” in certain particularized circumstances, such as “in connection 4 A.L.M. HOLDING COMPANY v. ZYDEX INDUSTRIES PRIVATE LTD.

with the transfer of substantially all of” a party’s “assets.” Id.

Notwithstanding Ingevity’s exclusive license and right to sublicense, Plaintiff retained a royalty-free right to (a) make, import, and use licensed products and paving mixtures under the patents for research and development purposes, and (b) to make, import, use, sell and offer to sell paving mixtures containing licensed products purchased from Ingevity. Id. at 81–82, ¶¶ 2.1, 2.4. Plaintiff retained the royalty-free right to sublicense to their affiliates the rights they themselves retained in Agreement ¶ 2.4. Id.

The Agreement provides Plaintiff with the right to terminate the Agreement based on any material breach by Ingevity , subject to notice and three months to cure any such breach. Id. at 90, ¶ 9.3. In addition, Plaintiff maintains control of any continuing patent prosecution and assumed the obligation to pay maintenance fees on the patents-in- suit. Id. at 87, ¶ 4.3.

B. District Court Litigation On March 21, 2024, Plaintiff filed this action against Defendant, alleging infringement of the six Asserted Patents . See J.A. 16–68. Defendant filed a motion to dismiss solely for lack of Article III standing.

Upon reviewing the different provisions of the Agreement , the district court concluded that Plaintiff lacked constitutional standing to pursue the infringement suit and granted Defendant’s motion to dismiss. Decision, 2024 WL 5276676, at *8. The district court first determined that Plaintiff’s reserved usage rights and ability to review sublicensing terms under the Agreement ¶¶ 2.1, 2.3, and 2.4 were not exclusionary rights. Id. at *3–5. Similarly, it concluded that Plaintiff’s royalty rights did not confer constitutional standing. Id. at *5.

The district court next determined that Plaintiff’s right to sue was not an exclusionary right sufficient to establish

A.L.M. HOLDING COMPANY v. ZYDEX INDUSTRIES PRIVATE LTD. 5

Article III standing. Id. at *6–7. In doing so, the district court relied heavily on this court’s decision in Morrow v. Microsoft Corp., 499 F.3d 1332 (Fed. Cir. 2007), where we held that a plaintiff’s contractual right to sue for infringement —separated from all other patent rights—did not confer an exclusionary right sufficient for constitutional standing. 499 F.3d at 1342–43; Decision, 2024 WL 5276676, at *6. The district court also relied on Deere & Co. v. Kinze Manufacturing, Inc., 683 F. Supp. 3d 904 (S.D. Iowa 2023), which similarly held that a patent owner’s retained right to sue was not an exclusionary right conferring constitutional standing. 683 F. Supp. 3d at 920–21; Decision , 2024 WL 5276676, at *6.

The district court then determined that Plaintiff’s ability to collect damages and terminate the Agreement were likewise insufficient to establish constitutional standing. Id. at *7–8. Thus, because it determined that Plaintiff did not have Article III standing, the district court dismissed the action without prejudice. Id. at *8.

Plaintiff timely appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

STANDARD OF REVIEW

We review Article III standing determinations de novo.

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