Subsidiary’s Implied License Sufficient to Establish Standing to Sue for Lost Profits

The magistrate judge recommended denying defendants' motion to dismiss plaintiffs' second amended complaint on the ground that the original plaintiff's wholly-owned subsidiary lacked standing. "Defendants contend that [the subsidiary] is not a licensee at all — exclusive or otherwise — whereas [plaintiff] maintains that [its subsidiary] holds an implied exclusive license to practice the patents in certain retail channels. . . . [I]t is not incumbent upon [plaintiff] to produce a written license in order to join [its subsidiary]. . . . [The subsidiary] must only show that it received the right to practice [plaintiff‘s] patents in a particular area and [plaintiff‘s] express or implied promise that others would be excluded from practicing the patents in that area. . . . Defendants cite no authority to support their argument that an exclusive license — and specifically, one between related companies — must contain particular financial terms. Rather, all that is required is [plaintiff‘s] express or implied promise that [the subsidiary] would be permitted to use the invention in a defined market to the exclusion of others."

Mars, Inc. v. TruRX LLC et al, 6-13-cv-00526 (TXED March 14, 2016, Order) (Mitchell, M.J.)