Ridge Corp. v. Kirk National Lease Co., Truck & Trailer Parts Solutions, Inc., Altum LLC

N OTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
RIDGE CORP.,
Plaintiff-Appellee
v.
KIRK NATIONAL LEASE CO., TRUCK & TRAILER
PARTS SOLUTIONS, INC., ALTUM LLC,
Defendants-Appellants
______________________
2024-1138
______________________
Appeal from the United States District Court for the
Southern District of Ohio in No. 2:23-cv-03012-ALM-KAJ,
Judge Algenon L. Marbley.
______________________
Decided: August 1, 2024
______________________
CHRISTOPHER WARREN T ACKETT , Bailey Cavalieri LLC,
Columbus, OH, argued for plaintiff-appellee. Also repre-
sented by G RAYCEN W OOD.
D ONALD E. BURTON, Faruki PLL, Dayton, OH, argued
for defendants-appellants Kirk National Lease Co., Truck
& Trailer Parts Solutions, Inc. Also represented by
MELISSA L. WATT , Cincinnati, OH; J OSHUA A. K OLTAK,
MICHAEL SCARPELLI, Faulkner, Garmhausen, Keister &
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RIDGE CORP. v. KIRK NATIONAL LEASE CO. 2
Shenk, Sidney, OH.
T IFFANY L. CARWILE , Arnold & Clifford LLP, Columbus,
OH, argued for defendant-appellant Altum LLC. Also rep-
resented by D AMION M. CLIFFORD, M ICHAEL L EE D ILLARD,
J R., G ERHARDT A. G OSNELL , II.
______________________
Before D YK, HUGHES , and STOLL , Circuit Judges.
STOLL , Circuit Judge.
Kirk NationaLease Co., Truck & Trailer Parts Solu-
tions Inc. (together, “KNL”), and Altum LLC (“Altum”) (col-
lectively, “Appellants”) appeal the district court’s grant of
Appellee Ridge Corp.’s (“Ridge”) motion for a preliminary
injunction and denial of Altum’s motion to join Cold Chain,
LLC (“Cold Chain”), the owner of United States Patent
No. 9,151,084 (the “’084 patent”). For the reasons that fol-
low, we vacate the district court’s denial of joinder and
grant of preliminary injunctive relief, and we remand for
proceedings consistent with this opinion.
BACKGROUND
KNL leases and performs maintenance on commercial
trucks and trailers. KNL also re-sells panel doors for use
in trucks and trailers. Altum is a composites manufacturer
specializing in reinforced thermoplastic products and the
joining of dissimilar materials. The doors marketed and
sold by KNL use Altum’s panels.
Ridge is a manufacturing and engineering company
that, among other things, produces advanced composites
for use in trucks and trailers. On February 15, 2023, Ridge
became the exclusive licensee of the ’084 patent, which
Cold Chain owns. The ’084 patent is directed to “[a]n arti-
cle of manufacture for use as an insulated overhead door.”
’084 patent Abstract. On May 1, 2023, Cold Chain and
Ridge “amended and restated” their exclusive license
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RIDGE CORP. v. KIRK NATIONAL LEASE CO. 3
agreement (the “Agreement”). J.A. 5; J.A. 261–72. In per-
tinent part, the Agreement provides:
[§ 3] Grant of License. Licensor [Cold Chain]
hereby grants to Licensee [Ridge] an exclusive, roy-
alty bearing, nontransferable, sublicensable right
and license to make, have made, use, sell, install,
service, import/export and/or otherwise commer-
cialize [truck roll-up doors, trailer roll-up doors or
other roll-up door applications that include every
limitation of at least one valid and enforceable
claim of the ’084 patent] in [all countries of the
world] (the “License”). Notwithstanding the fore-
going, Licensee’s right of sublicense shall: (a) be
limited to sublicensing to those sublicensees that
agree to purchase and use [roll-up door panels sold
by Licensee Ridge] in the manufacture and sale of
other [truck roll-up doors, trailer roll-up doors or
other roll-up door applications that include every
limitation of at least one valid and enforceable
claim of the ’084 patent] (each a, “Door Manufac-
turer”); (b) be granted in each instance for a period
no longer than the term of this Agreement . . . ; and
(c) not be farther sublicensable by Door Manufac-
turers. Except for the licenses granted to Licensee
in this Section (including, without limit, attendant
rights of sublicense to Door Manufacturers), Licen-
sor hereby expressly retains all rights, title and in-
terest in and to all Licensed Patents and Licensor’s
other intellectual property; and, no other rights are
or shall be deemed to be granted to Licensee by im-
plication, estoppel, statute, operation of law or oth-
erwise pursuant to this Agreement.
. . .
[§ 6(a)] Royalty Percentage. . . . Licensee [Ridge]
shall pay to Licensor [Cold Chain] a Royalty in the
amount of five percent (5%) of the Net Sales Price
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RIDGE CORP. v. KIRK NATIONAL LEASE CO. 4
of (i) all [roll-up door panels sold by Licensee Ridge]
and (ii) all [truck roll-up doors, trailer roll-up doors
or other roll-up door applications that include
every limitation of at least one valid and enforcea-
ble claim of the ’084 patent], if any, which are sold
by Licensee itself in [all countries of the world];
provided, however, that no such Royalties shall ap-
ply to and/or accrue before and until May l, 2025 as
additional consideration for Licensee’s best efforts
to commercialize the Licensed Patent.
. . .
[§ 14] Infringement Actions. Subject to the follow-
ing, both Licensor [Cold Chain] and Licensee
[Ridge] shall have the right to initiate a patent in-
fringement action against any third party reasona-
bly believed to be infringing a Licensed Patent, but
neither party shall have any obligation to do so. Li-
censee shall give Licensor the option by written no-
tice of initiating any such action before doing so
itself (or issuing any demand or threat of such ac-
tion). If Licensee initiates such action or the par-
ties cooperatively initiate a joint action:
(i) Licensee and Licensor shall share equally all at-
tendant costs and expenses incurred by Licensee
and/or Licensor up to an aggregate amount of
US $2,000,000 (“Maximum Shared Costs”) and, ac-
cordingly, Licensee shall indemnify, defend and
hold harmless Licensor for any costs or expenses
incurred by Licensor exceeding US $1,000,0000
(i.e., ½ of the Maximum Shared Costs); (ii) any
judgment or settlement shall be collected for the
benefit of Licensee and Licensor in proportion to
the total costs and expenses incurred by each with
respect to the action; (iii) Licensor’s share of the
Maximum Shared Costs shall be paid exclusively:
(a) from Licensor’s share of any applicable judg-
ment or settlement and (b) to the extent not so paid
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RIDGE CORP. v. KIRK NATIONAL LEASE CO. 5
and/or pending such judgment or settlement, in the
form of a credit against any and all current and fu-
ture Royalties due and payable by Licensee until
paid in full; (iv) if Licensor’s share of the Maximum
Shared Costs exceeds the sum of (a) Licensor’s
share of all judgments or settlements and (b) all
Royalties due and payable by Licensee pursuant to
this Agreement, any such excess amount shall be
forgiven; and (v) Licensee shall retain final control
over any major strategic decisions and/or settle-
ment of any such action. If any such action is ini-
tiated by only one party, the non-initiating party
shall provide all cooperation reasonably requested
by the party initiating the action.
J.A. 262–66.
Ridge, on its own, filed suit against Appellants on Sep-
tember 20, 2023, accusing them of infringing the ’084 pa-
tent. Two days after Ridge filed its complaint, the district
court granted Ridge’s motion for a temporary restraining
order. On September 28, 2023, Altum filed a motion for
joinder, arguing that Cold Chain is a necessary and indis-
pensable party that must be joined as a party-plaintiff and
seeking an order joining Cold Chain. On November 3,
2023, the district court granted Ridge a preliminary injunc-
tion and denied joinder of Cold Chain. The court deter-
mined that “Cold Chain transferred all substantial rights
to Ridge such that Cold Chain is not a necessary party and
does not need to be involuntarily joined” under Federal
Rule of Civil Procedure 19. J.A. 29. The court also enjoined
Appellants from: (1) continuing to manufacture, advertise
for sale, sell, or further contract to sell the allegedly in-
fringing door or any other infringing door; (2) inducing any
other person or entity to manufacture, advertise for sale,
or sell the allegedly infringing door or any other infringing
door; (3) contributing to the manufacture, advertisement
for sale, or selling of the allegedly infringing door or any
other infringing door; and (4) tortiously interfering with
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RIDGE CORP. v. KIRK NATIONAL LEASE CO. 6
Ridge’s business relationships. KNL and Altum appeal.
We have jurisdiction under 28 U.S.C. § 1292(a)(1), (c)(1).
D ISCUSSION
I
Joinder is an issue not unique to patent law, so we look
to the law of the regional circuit. A123 Sys., Inc. v. Hydro-
Quebec, 626 F.3d 1213, 1220 (Fed. Cir. 2010). The Sixth
Circuit reviews Rule 19(a) determinations under an abuse
of discretion standard. Keweenaw Bay Indian Cmty.
v. Michigan, 11 F.3d 1341, 1346 (6th Cir. 1993). “An abuse
of discretion occurs if the district court relies on clearly er-
roneous findings of fact, applies the wrong legal standard,
misapplies the correct legal standard when reaching a con-
clusion, or makes a clear error of judgment.” Young v. Na-
tionwide Mut. Ins. Co., 693 F.3d 532, 536 (6th Cir. 2012).
Only a “patentee” may bring a civil action for patent
infringement. 35 U.S.C. § 281.1 A “patentee” is the party
to whom the patent was issued and the successors in title
to the patentee. Id. § 100(d). The term “patentee” does not
include mere licensees, however. Univ. of S. Fla., 19 F.4th
at 1319. Whether a party is a “patentee” is “a question of
law that this court reviews de novo, applying Federal Cir-
cuit precedent.” Diamond Coating Techs., LLC v. Hyundai
Motor Am., 823 F.3d 615, 617 (Fed. Cir. 2016) (quoting
WiAV Sols. LLC v. Motorola, Inc., 631 F.3d 1257, 1263
(Fed. Cir. 2010)).
1 Section 281 is “simply a statutory requirement; it
does not ‘implicate standing or subject-matter jurisdic-
tion.’” Univ. of S. Fla. Rsch. Found., Inc. v. Fujifilm Med.
Sys. U.S.A., Inc., 19 F.4th 1315, 1319 n.1 (Fed. Cir. 2021)
(quoting Lone Star Silicon Innovations LLC v. Nanya Tech.
Corp., 925 F.3d 1225, 1235–36 (Fed. Cir. 2019)).
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RIDGE CORP. v. KIRK NATIONAL LEASE CO. 7
“‘A patent owner may transfer all substantial rights in
the patents-in-suit, in which case the transfer is tanta-
mount to an assignment of those patents to the exclusive
licensee,’ who may then maintain an infringement suit in
its own name.” Univ. of S. Fla., 19 F.4th at 1319–20 (quot-
ing Alfred E. Mann Found. for Sci. Rsch. v. Cochlear Corp.,
604 F.3d 1354, 1358–59 (Fed. Cir. 2010)). “To determine
whether an exclusive license is tantamount to an assign-
ment, we ‘must ascertain the intention of the parties [to the
license agreement] and examine the substance of what was
granted.’” Alfred E. Mann, 604 F.3d at 1359 (alteration in
original) (quoting Mentor H/S, Inc. v. Med. Device All.,
Inc., 240 F.3d 1016, 1017 (Fed. Cir. 2001)). The Agreement
in this case is governed by the laws of the State of Dela-
ware. J.A. 269 (Agreement § 22). Under Delaware law, “a
contract’s construction should be that which would be un-
derstood by an objective, reasonable third party. [The
court] will read a contract as a whole and we will give each
provision and term effect, so as not to render any part of
the contract mere surplusage.” Estate of Osborn v. Kemp,
991 A.2d 1153, 1159 (Del. 2010) (citations omitted). We re-
view the district court’s interpretation of a contract de
novo. Daniel v. Hawkins, 289 A.3d 631, 645 (Del. 2022).
We examine several rights in determining whether a
licensor has transferred away sufficient rights to render an
exclusive licensee the owner of a patent, including:
the scope of the licensee’s right to sublicense, the
nature of license provisions regarding the reversion
of rights to the licensor following breaches of the
license agreement, the right of the licensor to re-
ceive a portion of the recovery in infringement suits
brought by the licensee, the duration of the license
rights granted to the licensee, the ability of the li-
censor to supervise and control the licensee’s activ-
ities, the obligation of the licensor to continue
paying patent maintenance fees, and the nature of
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RIDGE CORP. v. KIRK NATIONAL LEASE CO. 8
any limits on the licensee’s right to assign its inter-
ests in the patent.
Univ. of S. Fla., 19 F.4th at 1320 (quoting Alfred E. Mann,
604 F.3d at 1360–61). We inspect “the ‘totality’ of the
agreement to determine whether a party other than the
original patentee has established that it obtained all sub-
stantial rights in the patent.” Id. (quoting Lone Star,
925 F.3d at 1229). “[T]he exclusive right to make, use, and
sell, as well as the nature and scope of the patentee’s re-
tained right to sue accused infringers are the most im-
portant considerations in determining whether a license
agreement transfers sufficient rights to render the licensee
the owner of the patent.” Id.
II
Turning to the facts of this case in light of this prece-
dent, we conclude that the district court erred in determin-
ing that Cold Chain transferred all substantial rights to
Ridge. We hold that Ridge does not meet the statutory re-
quirement of being a patentee under 35 U.S.C. § 281 be-
cause Ridge is not an exclusive licensee with all substantial
rights in the ’084 patent. In reaching this conclusion, we
are particularly persuaded by the Agreement’s treatment
of the right to sue.
We consider “first and foremost” the Agreement’s fail-
ure to transfer Cold Chain’s right to sue to Ridge. Univ. of
S. Fla., 19 F.4th at 1322; Alfred E. Mann, 604 F.3d at 1361
(“Frequently, . . . the nature and scope of the exclusive li-
censee’s purported right to bring suit, together with the na-
ture and scope of any right to sue purportedly retained by
the licensor, is the most important consideration.”). Both
Cold Chain and Ridge have the right to initiate a patent
infringement action, and Ridge must give Cold Chain the
option of initiating any such action before doing so itself.
J.A. 265–66 (Agreement § 14). Retaining such control of
litigation activities is “critical to demonstrating that the
patent has not been effectively assigned to the licensee.”
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RIDGE CORP. v. KIRK NATIONAL LEASE CO. 9
Diamond Coating, 823 F.3d at 620 (citation omitted).
Where the licensor “retains a right to sue accused infring-
ers, that right often precludes a finding that all substantial
rights were transferred to the licensee,” unless the licen-
sor’s right to sue “is rendered illusory by the licensee’s abil-
ity to settle licensor-initiated litigation by granting royalty-
free sublicenses to the accused infringers.” Alfred E. Mann,
604 F.3d at 1361 (citing Speedplay, Inc. v. Bebop, Inc.,
211 F.3d 1245, 1251 (Fed. Cir. 2000)).
In Speedplay, we held that the licensee’s right to grant
royalty-free sublicenses to defendants sued by the licensor
rendered the licensor’s right to sue illusory. 211 F.3d
at 1251; see also Univ. of S. Fla., 19 F.4th at 1322. Here,
Ridge has “an exclusive, royalty bearing, nontransferable,
sublicensable right,” but the Agreement explicitly “limit[s]”
that right. J.A. 262–63 (Agreement § 3). Ridge is “limited
to sublicensing to those sublicensees that agree to purchase
and use” roll-up door panels sold by Ridge. J.A. 262 (Agree-
ment § 3). And Ridge must pay to Cold Chain a 5% royalty
of the net sales price of all roll-up doors and door panels
that Ridge sells. J.A. 263 (Agreement § 6(a)). Accordingly,
Ridge’s right to sublicense is “fettered” and thus “does not
render illusory [Cold Chain’s] right to sue accused infring-
ers.” Alfred E. Mann, 604 F.3d at 1362.
Ridge relies on McNeilab, Inc. v. Scandipharm, Inc.,
No. 94-1508, 1996 WL 431352 (Fed. Cir. July 31, 1996), to
support its argument that “[w]hen a license does not re-
quire the licensor to sue infringers and, in fact, negates
such an obligation, there is no substantial right retained.”
Appellee’s Br. at 19. But Ridge’s reliance on McNeilab is
misplaced. McNeilab involved a very different license
agreement with a “negation” of the licensor’s obligation to
sue infringers, “not a grant or retention of a right.”
McNeilab, 1996 WL 431352, at *4. Here, in contrast, Cold
Chain granted Ridge the right to sue for infringement,
while retaining that right for itself as well. Our court has
held that a patentee-licensor retained substantial interests
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RIDGE CORP. v. KIRK NATIONAL LEASE CO. 10
in the patents-in-suit even where the licensee had the right
of first refusal in suing alleged infringers. AsymmetRx, Inc.
v. Biocare Med., LLC, 582 F.3d 1314, 1316–17, 1320–21
(Fed. Cir. 2009).
Ridge also contends that its “right to sue and control a
lawsuit is completely unfettered by Cold Chain’s action or
inaction.” Appellee’s Br. at 22. During oral argument,
counsel for Ridge argued that even when Cold Chain alone
initiates an infringement action, Ridge has “complete
rights to control the suit” and “complete control over all de-
cision making in the suit.” Oral Arg. at 12:16–12:29,
14:00–14:21, https://oralarguments.cafc.uscourts.gov/de-
fault.aspx?fl=24-1138_06032024.mp3. Ridge’s assertion is
belied by the language of the Agreement.
Ridge relies on the following Agreement lan-
guage: “(v) Licensee shall retain final control over any ma-
jor strategic decisions and/or settlement of any such
action.” J.A. 265–66 (Agreement § 14); Oral Arg. at 19:30–
20:08. But this language comes at the end of a list of five
requirements activated only when Ridge initiates an in-
fringement action or when Ridge and Cold Chain “coopera-
tively initiate a joint action.” J.A. 266 (Agreement § 14) (“If
Licensee initiates such action or the parties cooperatively
initiate a joint action: . . . (v) Licensee shall retain final
control over any major strategic decisions and/or settle-
ment of any such action.”). The contract term “Licensee
shall retain final control over any major strategic decisions
and/or settlement of any such action” is not activated when
Cold Chain alone initiates an infringement action. When
asked about this language at oral argument, Ridge’s coun-
sel responded, “there’s nothing in the Agreement suggest-
ing that Ridge would not retain this final say if Cold Chain
were to initiate a suit” and “there’s nothing saying that the
cooperation from Cold Chain would not include deferring
to the exclusive licensee’s strategic decisions and settle-
ment demands.” Oral Arg. at 20:09–22:37. But the Agree-
ment’s silence on Ridge’s alleged right to control Cold
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RIDGE CORP. v. KIRK NATIONAL LEASE CO. 11
Chain–initiated litigation “does not show an intent to
transfer that right”; rather, it shows that Cold Chain re-
tained that right. Univ. of S. Fla., 19 F.4th at 1322. The
plain language of the Agreement makes clear that Ridge
has final control over major strategic decisions and/or set-
tlement of an infringement action only when the action is
initiated by Ridge or jointly initiated by both Ridge and
Cold Chain, but not when Cold Chain alone initiates the
action, which it can do pursuant to § 14 of the Agreement.
Under the Agreement, Cold Chain retained not only
the right to sue for infringement but also “expressly re-
tain[ed] all rights, title and interest in and to all Licensed
Patents and [its] other intellectual property”; ensured that
“any judgment or settlement shall be collected for the ben-
efit of Licensee and Licensor in proportion to the total costs
and expenses incurred by each with respect to the action”;
retained the right to “assign, transfer or delegate th[e]
Agreement or any right, license or obligation [t]hereunder”;
retained the right to condition any assignment by Ridge on
Cold Chain’s “prior written consent”; and, among other
things, ensured that the “Agreement and all of Licensee’s
rights [t]here-under shall automatically terminate upon
the occurrence of any [violative] assignment” by Ridge.
J.A. 261–70.
Because the Agreement did not convey all substantial
rights in the ’084 patent to Ridge, Ridge is not a “patentee”
under 35 U.S.C. § 281. Diamond Coating, 823 F.3d at 621.
Accordingly, the district court erred in denying joinder and
in granting the preliminary injunction to a party that is not
a patentee. Because we reach this conclusion, we do not
address Appellants’ other arguments challenging the grant
of the preliminary injunction, though in any further pro-
ceeding the district court may wish to further consider the
parties’ arguments as to the merits of the injunction.
On July 8, 2024, over a month after the June 3, 2024
oral argument in this case, Ridge filed a Rule 28(j) Letter
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RIDGE CORP. v. KIRK NATIONAL LEASE CO. 12
containing “a corrected copy of the following pertinent evi-
dence: Addendum to Amended and Restated License
Agreement.” ECF No. 68 at 1. Ridge and Cold Chain
signed this Addendum on June 28 and 29, 2024, respec-
tively. New evidence not submitted to the district court,
however, is not properly part of the record on appeal. See,
e.g., Moore U.S.A., Inc. v. Standard Reg. Co., 229 F.3d
1091, 1116 (Fed. Cir. 2000) (citing Fed. R. App. P. 10(a));
Ballard Med. Prods. v. Wright, 821 F.2d 642, 643 (Fed. Cir.
1987) (“An appellate court may consider only the record as
it was made before the district court.”).2 The district court
is the proper forum for addressing this new evidentiary de-
velopment in the first instance.3
CONCLUSION
For the foregoing reasons, we vacate the district court’s
denial of joinder and grant of preliminary injunctive relief,
2 We also recognize that parties may not use Rule
28(j) to submit new evidence to the appeals court. E.g., Di-
Bella v. Hopkins, 403 F.3d 102, 118 (2d Cir. 2005).
3 We note that a nunc pro tunc agreement cannot es-
tablish Ridge’s status as a § 281 patentee. See Diamond
Coating, 823 F.3d at 618–19, 621 (“Unless [a party] re-
ceived all substantial rights in the patents-in-suit at the
time it filed suit in the District Court, it was not a ‘pa-
tentee’ . . . .” (emphasis added)); Schwendimann v. Ark-
wright Advanced Coating, Inc., 959 F.3d 1065, 1072, 1075
(Fed. Cir. 2020) (also asking whether a party was a pa-
tentee at the time her action was filed). As we recently ex-
plained, with respect to “[t]he issue of whether the
statutory requirements of § 281 are met . . . a defect is cur-
able by joinder.” Intell. Tech LLC v. Zebra Techs. Corp.,
101 F.4th 807, 814 (Fed. Cir. 2024); see also Lone Star,
925 F.3d at 1238 (“Although [a party’s] rights are less than
all substantial rights, we have consistently said that the
cure for this defect is to join the patent owner . . . .”).
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RIDGE CORP. v. KIRK NATIONAL LEASE CO. 13
and we remand for proceedings consistent with this opin-
ion.
VACATED AND REMANDED
COSTS
Costs to Appellants.
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