Alice invents a widget and receives a U.S. patent for her invention. In return for payment, she grants Bob an exclusive license to manufacture and sell the widget.
Carol decides to make knock-off widgets without permission from Alice.
Alice decides that, for a number of practical reasons, it's not worth pursuing a claim against Carol.
Now, does Bob have a claim against Alice for not enforcing his exclusivity? Does he have a claim against Carol?
does Bob have a claim against Alice for not enforcing his exclusivity? Does he have a claim against Carol?
The licensee primarily has a claim against the infringer of the patent, but see Ind. Wireless Co. v. Radio Corp., 269 U.S. 459, 468 (1926):
The presence of the owner of the patent as a party is indispensable not only to give jurisdiction under the patent laws but also, in most cases, to enable the alleged infringer to respond in one action to all claims of infringement for his act [...]
which is why
[i]f the owner of a patent, being within the jurisdiction, refuses or is unable to join an exclusive licensee as co-plaintiff, the licensee may make him a party defendant by process and he will be lined up by the court in the party character which he should assume.
Id at 469.
That "party character" would be co-plaintiff. See Gentesix v. Board of Regents of Univ. of Texas Sys., 966 F.3d 1316, 1323 (2020):
[A] patentee who refuses to voluntarily join an infringement action initiated by its exclusive licensee can ordinarily be joined as an involuntary plaintiff under Rule 19(a).
For Bob to have a claim against the owner of the patent, the terms of the license agreement would need to establish the owner's responsibility. For instance, Ind. at 469 notes that
exclusive licenses frequently contain express covenants by the patent-owner and licensor to sue infringers that expressly cast upon the former the affirmative duty of initiating and bearing the expense of the litigation.
This reflects that the owner a priori has no duty toward the licensee in regard to enforcement of exclusivity.
Alice . . . grants Bob an exclusive license to manufacture and sell the widget.
Carol decides to make knock-off widgets without permission from Alice.
Alice decides that, for a number of practical reasons, it's not worth pursuing a claim against Carol.
Now, does Bob have a claim against Alice for not enforcing his exclusivity? Does he have a claim against Carol?
Normally, the exclusive license contract would authorize Bob to sue infringers of Alice's patent licensed to him at Bob's expense, without Alice's post-contractual, post-dispute permission with an irrevocable power of attorney or the equivalent. So, Bob would have a claim against Carol, but not a claim against Alice.
