Products Utilizing Licensed Patents Are Not Necessarily Licensed

In AlexSam, Inc. v. Aetna, Inc., No. 22-2036 (Fed. Cir. Oct. 8, 2024), the Federal Circuit found the district court erred in its evaluation of a license agreement and failed to construe the complaint’s well-pled facts in a light most favorable to plaintiff AlexSam, vacating dismissal of the second amended complaint and remanding for further proceedings.

In the district court, AlexSam alleged Aetna infringed patent claims directed to multifunctional credit card systems and networks. AlexSam had previously entered a license agreement (now terminated) with MasterCard. The district court granted Aetna’s motion to dismiss, finding the accused products were licensed.

The Federal Circuit, however, disagreed and found the scope of the license agreement was narrower than the scope of the asserted claims.  The Court held the license covers only transactions involving account activation or adding account value, but the asserted claims are broader, so "not every act that infringes these claims will necessarily be licensed.” The Court found some allegedly infringing activity may fall outside the license.

The Court also vacated the district court’s dismissal of other claims based on certain Aetna VISA Products as insufficiently pled. Undertaking de novo review, the Court found AlexSam had stated a plausible claim for relief under Iqbal-Twombly. It reasoned the complaint put Aetna on notice of allegedly infringing activities at an appropriate level of detail given the technology at issue, even though it did not provide an element-by-element infringement analysis.