TexasLDPC v. Broadcom: When an Exclusive Patent Licensee Can Sue Alone

Calling a patent license “exclusive” does not necessarily give the licensee the right to file an infringement lawsuit alone. The real question is whether the agreement transferred enough of the patent owner’s rights to make the licensee, in practical effect, an assignee.

On September 14, 2026, the Federal Circuit applied that principle in TexasLDPC Inc. v. Broadcom Inc., a precedential decision involving patents and copyrights licensed by Texas A&M University. The court held that the agreement transferred all substantial patent rights to TexasLDPC, allowing the company to sue without joining the university. It also rejected the conclusion that TexasLDPC’s shift from product commercialization to enforcement automatically terminated the license.

The decision is important well beyond university licensing. It shows why enforcement authority, retained rights, termination clauses, sublicensing control, and the agreement’s overall business purpose must be resolved when the license is drafted—not after an infringement case has been pending for years.

What happened in TexasLDPC v. Broadcom?

The dispute concerned low-density parity-check technology used for error correction in data transmission. Texas A&M owned five asserted patents and three asserted copyrights arising from work by Dr. Kiran Gunnam. In June 2015, the university entered into a license agreement with TexasLDPC, a company co-founded by Dr. Gunnam’s wife.

The agreement gave TexasLDPC exclusive rights to make, use, import, export, offer for sale, and sell licensed products. It also permitted sublicensing and gave TexasLDPC the exclusive right to enforce the patents and copyrights and collect infringement damages. In return, Texas A&M received equity, a share of sublicense royalties, and a share of enforcement recoveries.

TexasLDPC sued Broadcom, LSI, and Avago in the District of Delaware in December 2018 without naming Texas A&M as a plaintiff. The district court eventually dismissed the case. It concluded that TexasLDPC had ceased its business operations when it stopped trying to develop and market the technology and focused on enforcement. The district court also found that the license had not transferred all substantial patent rights and that Texas A&M was a necessary party.

The Federal Circuit reversed. Reading the contract as a whole, the appellate court held that enforcement was one of TexasLDPC’s contemplated business operations. The license therefore did not automatically terminate when the company shifted its focus to litigation. The court also determined that the rights granted to TexasLDPC were broad enough to permit it to maintain the infringement case in its own name.

The decision did not resolve whether Broadcom infringed or whether the asserted rights were valid. It restored the lawsuit after reversing the threshold dismissal.

“Exclusive” is only the beginning of the analysis

35 U.S.C. § 281 provides a civil remedy to a patentee. A patent owner may transfer all substantial rights in a patent to an exclusive licensee. When the transfer is tantamount to an assignment, the licensee may sue in its own name. If substantial rights remain with the patent owner, an exclusive licensee ordinarily must join that owner.

The Federal Circuit examines the totality of the agreement. There is no single label or exhaustive checklist that decides the issue. The court has repeatedly emphasized the exclusive rights to practice the invention and the nature and scope of the right to enforce as especially important considerations.

That distinction matters because commercial exclusivity can be narrower than litigation authority. A licensee might be the only company permitted to sell a patented product in a field or territory while the owner retains control over whom to sue, whether to settle, or whether to license additional defendants. Such retained control may prevent the licensee from suing alone even though the agreement repeatedly uses the word “exclusive.”

Businesses negotiating a patent license should therefore separate at least three concepts: exclusivity in practicing the invention, authority to sublicense, and control of enforcement. Each can be allocated differently.

Why TexasLDPC held all substantial rights

The court described the issue as a close call, but the core grant favored TexasLDPC. It received broad commercial rights, sublicensing authority, and the “first and only right to enforce” against third parties, together with the exclusive right to collect past, present, and future infringement damages. Texas A&M did not possess a general veto over litigation or settlement decisions.

The university did retain several interests. It kept a limited right to practice the patents for research and educational purposes, the right to sue one preexisting licensee, a right to join certain actions, approval authority over assignments that could not be unreasonably withheld, and milestone-based termination rights.

Those reservations did not outweigh what TexasLDPC received. The university’s noncommercial practice right did not create a competing infringement action against the defendants. Its enforcement right concerning one earlier licensee was limited in scale. Its financial interest in licensing and litigation proceeds was not enough, standing alone, to require joinder. And the assignment and milestone provisions did not give the university the broad control over licensing and enforcement that had been decisive in other cases.

The practical lesson is not that any license with an enforcement clause transfers all substantial rights. The Federal Circuit expressly declined to make the rights to practice and enforce sufficient by themselves in every case. The complete allocation still controls.

The termination clause became an enforcement issue

The case also shows how a conventional business-operations clause can threaten an infringement action. The agreement provided for immediate termination if TexasLDPC “ceases its business operations.” After its commercialization efforts faltered, TexasLDPC concentrated on enforcing the licensed rights. The defendants argued that this transition automatically ended the license and eliminated TexasLDPC’s interest in the suit.

The Federal Circuit rejected that interpretation under the agreement’s Texas-law choice-of-law provision. Other operative terms expressly treated enforcement as a commercially reasonable effort, allowed enforcement activity to satisfy certain performance obligations, granted enforcement rights alongside commercialization rights, and gave Texas A&M a share of litigation recoveries. Read together, those provisions made enforcement part of TexasLDPC’s business operations.

The district court had placed weight on recitals describing commercialization and development. The Federal Circuit found that the operative provisions controlled the broader reading of the contract. A drafting team should not expect general recitals to define critical rights more precisely than the operative clauses.

This is a useful companion to the contract lessons in T-Mobile v. KAIFI: patent-related disputes often turn on ordinary contract language, and courts will enforce the allocation the parties actually wrote.

Rule 19 cannot be used simply to obtain discovery

Texas A&M’s status as a state university added another complication. It had asserted sovereign immunity in response to third-party discovery and could not simply be forced into the case. The district court reasoned that the university’s absence impaired the parties’ access to licensing evidence relevant to damages.

The Federal Circuit held that Texas A&M was not a required party under Federal Rule of Civil Procedure 19. Because TexasLDPC held all substantial rights, the university’s absence did not expose the defendants to multiple patent suits or prevent the university from protecting a remaining substantial patent interest.

The court also explained that “Rule 19 is not a discovery tool.” Difficulty obtaining information from an absent entity does not, by itself, make that entity necessary. The existing parties could still receive meaningful relief, and the record already contained the two agreements directly related to the asserted patents.

For litigants, that does not make licensor discovery unimportant. It means discovery needs and required-party status are different questions. License agreements should include cooperation, document-retention, witness-access, and litigation-support obligations so that enforcement does not depend on later compelling an uncooperative or immune licensor.

What a patent license should address before enforcement begins

The agreement should state whether the licensee, licensor, or both will control infringement claims. But a workable enforcement clause requires more than permission to sue. The parties should address:

• who selects counsel, controls strategy, approves settlement, and decides whether to appeal;
• whether the patent owner must join an action if a court requires it and who pays the resulting expense;
• which party may sue existing licensees, entities in reserved fields, or excluded targets;
• who receives recoveries and how fees, expenses, counterclaims, and adverse awards are allocated;
• who controls prosecution, maintenance fees, continuations, disclaimers, reexamination, and PTAB proceedings;
• what records, witnesses, technical materials, and comparable licenses must be produced to support liability and damages;
• whether assignment or sublicensing requires consent and whether that consent may be withheld; and
• which defaults cause automatic termination, which require notice and an opportunity to cure, and what happens to pending litigation after termination.

Those provisions should be consistent with the rest of the agreement. A broad enforcement grant can be undermined by a licensor’s veto, a narrow assignment restriction, a termination trigger, or a reservation that creates competing control. Likewise, a royalty provision that assumes litigation recoveries should align with the agreement’s definition of permitted business activity.

Pre-suit diligence should include the entire rights chain

A licensee considering patent litigation should review its authority before sending a demand or filing a complaint. That review should trace ownership and assignments, confirm that the license remains in force, test whether milestones were satisfied, identify prior licenses and field restrictions, and determine who controls enforcement and settlement.

The patent owner’s cooperation also should be addressed early. If joinder may be necessary, counsel should determine whether the owner will participate and whether sovereign immunity, personal jurisdiction, venue, or contractual restrictions could create a problem. Waiting until a defendant challenges the plaintiff’s rights can produce years of expensive satellite litigation.

Patent owners have an equally important reason to conduct this review. A transfer of all substantial rights can give the licensee significant autonomy over enforcement and settlement. Owners should understand whether their retained approval, practice, sublicensing, termination, and economic rights preserve the degree of control they intend.

Ownership itself also must be clear. Tucker Law’s guide on inventorship and patent ownership explains why naming inventors and transferring ownership are separate steps—an issue that can become critical before rights are licensed or enforced.

The business terms determine who can enforce the patent

TexasLDPC reinforces a deceptively simple rule: courts evaluate the rights the agreement actually transfers, not the title printed at the top. An exclusive license can function like an assignment, but only when the overall allocation leaves the licensee with all substantial patent rights.

For licensors and licensees, enforcement authority should be designed alongside commercialization duties, royalties, milestones, termination, and litigation cooperation. For a company preparing to sue, those terms should be tested before the complaint is filed.

Tucker Law advises businesses and inventors on patent strategy, licensing, and enforcement. If an existing license leaves uncertainty about who may sue or a new agreement must preserve the intended enforcement structure, contact Tucker Law for a focused review before the dispute dictates the answer.