A.L.M. Holding Company. v. Zydex Industries Private Ltd., Appeal No. 2025-1317 (Fed. Cir. May 19, 2026)

In its only precedential patent opinion last week, the Federal Circuit clarified its position on Article III standing for patent infringement suits where the patent holder transferred away some of its rights through an exclusive license.

The plaintiffs in this case—A.L.M. and Ergon Asphalt & Emulsions, Inc.–jointly own six patents related to warm-mix asphalt technology. In 2008, they entered into an agreement with MeadWestvaco Corporation (replaced by Ingevity Corporation in 2015 after a corporate merger) to exclusively license the patents, retaining for themselves the rights to collect royalties, approve sublicensees and assignments, and share control of patent infringement suits. In March of 2024, A.L.M. and Ergon filed an infringement suit against Zydex Inc. alleging infringement of their six patents. The district court dismissed the claim due to a lack of Article III standing, finding that A.L.M and Ergon’s had transferred away too many of their exclusionary rights in the asserted patents to establish constitutional standing.

The Federal Circuit reversed the district court’s decision, finding that there was an injury in fact conferring constitutional standing. In patent infringement cases, to determine whether there is an “injury in fact,” the courts look at whether the plaintiff has an “exclusionary right.”  The Court agreed with A.L.M. and Ergon, finding that retaining the right to sue, sublicensing control, and right to collect royalties was sufficient to demonstrate that A.L.M. and Ergon retained an exclusionary right after licensing their patents to Ingevity. First, the Federal Circuit stated that the right to sue “is a strong indicator of an exclusionary right” and that royalty interests, when combined with other limiting provisions, were further evidence of an exclusionary right. Next, the Court explained that plaintiffs’ sublicensing veto rights showed a “substantial ongoing control,” since Ingevity cannot grant sublicenses without A.L.M. and Ergon’s consent. Finally, the Federal Circuit rejected Zydex’s argument that A.L.M. and Ergon’s right to sue was illusory due to Ingevity’s sublicensing right, since sublicensing required approval and A.L.M. and Ergon were entitled to royalties from the sublicensees.

The opinion can be found here.

By Brittani Gambrell

This article summarizes aspects of the law and does not constitute legal advice. For legal advice with regard to your situation, you should contact an attorney.