Iris Corp. Berhad v. United States

82 Fed. Cl. 488, 2008 U.S. Claims LEXIS 191, 2008 WL 2684612
CourtUnited States Court of Federal Claims
DecidedJune 27, 2008
DocketNo. 06-801C
StatusPublished
Cited by3 cases

This text of 82 Fed. Cl. 488 (Iris Corp. Berhad v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Iris Corp. Berhad v. United States, 82 Fed. Cl. 488, 2008 U.S. Claims LEXIS 191, 2008 WL 2684612 (uscfc 2008).

Opinion

OPINION AND ORDER DENYING DEFENDANT’S MOTION TO DISMISS AND GRANTING DEFENDANT’S MOTION FOR JOINDER

WILLIAMS, Judge.

In this patent infringement suit, Plaintiff, IRIS Corporation Berhad (IRIS Malaysia), alleges that Defendant has infringed certain claims of U.S. Pat. No. 6,041,412 (the '412 patent) entitled “Apparatus and Method for Providing Access to Secure Data or Area,” by using secure electronic passport readers and having these manufactured and installed in the United States.

This matter comes before the Court on Defendant’s motion to dismiss for lack of standing or failure to join an indispensable party. The Government contends that IRIS Malaysia lacks standing because, although Plaintiff is the assignee of the patent-in-suit, Plaintiff exclusively licensed this patent in the United States to nonparty Winston Williams who held all substantial rights in the patent on the day this lawsuit was filed.

The Court denies this aspect of the motion, finding that under the governing license agreement, IRIS Malaysia did not convey all substantial rights in the '412 patent to Williams. Under the express terms of this agreement, IRIS Malaysia was acknowledged to be the owner of, as well as the party responsible for maintaining, the '412 patent and retained a right to develop, market, and sell the invention claimed by the '412 patent. Further, Williams’ license was set to expire seven years before the '412 patent’s expiration date, reverting all rights in the patent to IRIS Malaysia for that time period. So too, IRIS Malaysia had the right to terminate the agreement if Williams failed to pay royalties or achieve certain production milestones in specified timeframes. Finally, both IRIS Malaysia and Williams had the right to sue to enforce the patent on the date this suit was filed.

This leaves Defendant’s alternative argument that dismissal is warranted because Plaintiff has failed to join Williams, a necessary party, or in the alternative that joinder of Williams is appropriate.2 Two consider[490]*490ations persuade the Court to grant Defendant’s motion for joinder. First, the absence of Williams from this lawsuit could adversely affect the interests of the three defendants in that they could face multiple lawsuits if Williams is not a party plaintiff. Second, the validity of the '412 patent is contested, and Williams as well as IRIS Malaysia has a clear interest in this issue. As such, this Court deems Williams a person needed for just adjudication of this action within the meaning of Rule 19(a) of the Rules of the United States Court of Federal Claims (RCFC) and directs that Williams be joined as a party plaintiff.

Background3

IRIS Malaysia is the assignee of two patents—the '412 patent issued on March 21, 2000, and U.S. Patent No. 6,111,506, entitled “Method of Making an Improved Security Identification Document Including Contact-less Communication Insert Unit” (the '506 patent) issued on August 29, 2000. Compl. HH 5, 6.4 In essence, the '506 patent allegedly entails a method for manufacturing a secure electronic passport, which contains a computer chip with biographical and/or biometric data of the passport holder, and the '412 patent allegedly embodies the technology for secure electronic passport readers, capable of reading such passport data. Id.

In March 1998, the Malaysian government introduced the first electronic passport and installed electronic passport readers at various Malaysian ports of entry. Plaintiff has been supplying these passports and readers to Malaysia. Id. H 9. The United States Government has purchased several IRIS electronic passport readers from IRIS Malaysia for testing purposes and operated several of these readers at various international airports in the United States. Id. 1110.

Sometime after September 11, 2001, the United States Government decided to use electronic passports and secure electronic passport readers and instituted the requirement that any citizens of foreign governments who had been eligible to enter the United States without a visitor’s Visa (a program known as the U.S. Visa Waiver Program) would only be allowed to maintain that eligibility if their respective governments adopted an electronic passport. Id. H12. The governing United States statute, 8 U.S.C. § 1732, mandates that the Attorney General and the Secretary of State, inter alia: (1) “issue to aliens only machine-readable, tamper-resistant visas and other travel and entry documents that use biometric identifiers;” (2) deploy equipment and software to allow biometric comparison and authentication of machine-readable documents; and (3) require, after October 26, 2005, that any alien applying for admission to the United States under the Visa Waiver Program present a passport that incorporates biometric and document authentication identifiers. Govt. Ans. 113.

IRIS Malaysia alleges that the United States Government has installed, used and had manufactured for its use in the United States secure electronic passport readers that are infringements of one or more claims of the '412 patent, in that these readers were not purchased from IRIS Malaysia and that the United States Government had no license or right to use or manufacture them. Third-party Defendant, Fulcrum IT Services Company (Fulcrum), avers that pursuant to a contract awarded to Government Micro Resources, Inc. (GMR), by the Department of Homeland Security (DHS) on January 12, 2006, GMR sold and delivered to the DHS 503 passport readers manufactured by Roch-[491]*491ford Thompson, and that GMR does not have a license from IRIS Malaysia to use, manufacture, procure and/or practice the inventions described in IRIS’ patent. Fulcrum Ans. at 3 It 14. Defendants contend no license was required to manufacture or sell the readers and that the '412 patent is invalid pursuant to 35 U.S.C. § 112 (anticipation) and § 103 (obviousness). Govt. Ans. at 6 1120; Fulcrum Ans. at 3 H14; 3M Rochford Thompson Ans. and Aff. Defense at 4 112.

The License Agreement

On November 6, 2001, Plaintiff executed a License Agreement purporting to make Winston Williams an exclusive licensee of technology embodied in the '506 and '412 patents. The agreement defined TECHNOLOGY as the '412 and '506 patents, as well as “trade secrets, proprietary knowledge, and practical know how in data compression, encryption and retrieval----” Def.’s Mot. at A61.5

The original license agreement between Plaintiff and Williams contemplated two phases of performance and set various milestones, such as investments by Williams and the securing of contracts between Williams and the U.S. Government. Id. at A61-A62, H 1(a). In Phase I, Williams was to invest up to $100,000 to conclude a joint venture agreement with a large publicly listed U.S. company. Id. at 61 A. If this objective was not met within six months, the project was to terminate. The License Agreement provided further:

Should LICENSOR independently contract with a third party during Phase I, LICENSOR will immediately advise Mr. Winston Williams that LICENSOR elects to terminate this LICENSE AGREEMENT and shall pay to Mr.

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Cite This Page — Counsel Stack

Bluebook (online)
82 Fed. Cl. 488, 2008 U.S. Claims LEXIS 191, 2008 WL 2684612, Counsel Stack Legal Research, https://law.counselstack.com/opinion/iris-corp-berhad-v-united-states-uscfc-2008.