Gene Express, Inc.

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
WILMINGTON DIVISION
IN RE:
GENE EXPRESS, INC.,
DEBTOR.
CASE NO. 10-08432-8-JRL
CHAPTER 7
ORDER
This matter came before the court on AccuGenomics, Inc.’s (“AccuGenomics”) motion
to determine whether certain patent rights under the license agreement between the debtor and
the University of Rochester (“Rochester”) are considered property of the estate. A hearing was
held on March 13, 2012 in Raleigh, North Carolina.
On October 14, 2010, an involuntary petition was filed under Chapter 7 of the
Bankruptcy Code. James B. Angell was appointed as trustee on November 12, 2010, and
continues to serve as trustee in this case. When this case was commenced, the debtor was under
a license agreement with Rochester for the use of certain patent rights from Rochester. The
debtor entered into the license agreement with Rochester on October 26, 1993. The license
agreement allowed the debtor rights to the following patents owned by Rochester, if the debtor
complied with the terms of the license agreement: U.S. Patent Nos. 5639606, 5643765, and
SO ORDERED.
SIGNED this 15 day of March, 2012.
________________________________________
J. Rich Leonard
United States Bankruptcy Judge
____________________________________________________________
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1This revocation was likely ineffective, as the automatic stay was triggered by the filing
of the involuntary petition. 11 U.S.C. § 362(a).
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PCT53-52548. 	Rochester terminated the license agreement with the debtor on November 4,
2010.1 On November 14, 2010, this court entered an order of relief.
AccuGenomics requests a determination, pursuant to § 365(p)(1) of the Bankruptcy
Code, as to whether the patent rights licensed by the debtor are property of the estate. The
trustee objects to the motion and asserts that AccuGenomics lacks standing because it is not a
creditor or party in interest in this proceeding.
“Those who do not possess Art. III standing may not litigate as suitors in the courts of
the United States.” Valley Forge Christian College v. Americans United for Separation of
Church and State, Inc., 454 U.S. 464, 475-76 (1982) (footnote omitted). Article III of the United
States Constitution requires the party who invokes the court’s authority to show that he
personally has suffered some actual or threatened injury as a result of the defendant’s conduct,
that the injury can be traced to the challenged action, and that it is likely to be redressed by a
favorable decision. Valley Forge, 454 U.S. at 472-73 (recognizing that court is not a vehicle for
the vindication of the interests of concerned bystanders).
The Bankruptcy Code does not define “party in interest,” but the term “is generally
understood to include all persons whose pecuniary interests are directly affected by the
bankruptcy proceedings.” Yadkin Valley Bank & Trust Co. v. McGee (In re Hutchinson), 5 F.3d
750, 756 (4th Cir. 1993) (citations omitted). However, a party or entity merely concerned with
the outcome or result of a bankruptcy proceeding is not classified as a “party in interest.” In re
Mann, No. 09-80494C, 2011 Bankr. LEXIS 625, at *5-7 (Bankr. M.D.N.C. Feb. 25, 2011)
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(“[M]erely being interested in or concerned about a bankruptcy proceeding, without more,
cannot give rise to standing to inject ones self into the proceeding.”) “Mere interest in the
outcome of the proceeding is not sufficient to meet the standard [for a “party in interest”].” Id. at
*5 (citation omitted); In re Morris Publishing Group, LLC., No. 10-10134, 2010 Bankr. LEXIS
488, 2010 WL 599393, at *4 (Bankr. S.D. Ga. Feb. 10, 2010) (“[E]ntity without some kind of
direct relationship with the debtor, the debtor’s property, or the administration of the bankruptcy
estate – an entity that is a stranger to the bankruptcy case – is generally not a party in
interest[.]”). Moreover, a party will not satisfy the standing requirement by asserting the legal
rights or interests of third parties. In re Village Rathskeller, Inc., 147 B.R. 665, 668 (Bankr.
S.D.N.Y. 1992).
AccuGenomics does not have standing to seek a determination of whether the patent
rights under the license agreement with Rochester are considered property of the estate.
Although the University of Rochester was served with this motion, it has not responded. Thus
there is no affirmative showing that it desires to enter into an agreement with the movant.
AccuGenomics has not provided the court with a written licensing agreement contingent on this
court’s finding that the University of Rochester is free to re-license the patents. Accordingly, the
motion is DENIED for lack of standing.
END OF DOCUMENT
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