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Oral Assignment Ineffective to Convey Patent Rights and Subsequent Assignment too Late to Save Complaint from Dismissal with Prejudice for Lack of Standing

The plaintiff, Freed Designs, Inc. (“Freed Designs”), filed a patent infringement action defendant Sig Sauer. Robert Freed is the sole inventor of the ‘764 Patent, titled “Grip Extender For Hand Gun.” Freed is also the sole owner and President of Plaintiff Freed Designs. Plaintiff alleged that Sig Sauer makes, sells, and offers to sell magazine extenders that infringe the ‘764 Patent. Sig Sauer answered the complaint and raised an affirmative defense of lack of standing. Sig Sauer then moved to dismiss the complaint for lack of standing.

After the action was filed, Freed executed an “Assignment of the Invention and Patent Application” transferring to Free Designs his “entire right, title, and interest in and to” the ‘764 Patent. A few months later, Freed executed another assignment titled “Assignment of Rights, Title and Interest in Invention.” This second assignment was styled as a nunc pro tunc assignment, purporting to have an effective date of August 16, 2005 (the issue date of the ‘764 Patent).

The district court began its analysis of the motion by examining Federal Circuit law on standing. “The Federal Circuit has held that in a patent infringement action, the plaintiff must demonstrate that it held enforceable title to the patent at the inception of the lawsuit to assert standing. Id. (quotations and citations omitted); see also 35 U.S.C. ยงยง 100(d), 281 (A ‘patentee’ is entitled to bring a ‘civil action for infringement of his patent,’ and the patentee includes the ‘successors in title to the patentee.’).

Thus, “if the original plaintiff lacked Article III initial standing, the suit must be dismissed, and the jurisdictional defect cannot be cured” after the inception of the lawsuit. Id. (quoting Schreiber Foods, Inc. v. Beatrice Cheese, Inc., 402 F.3d 1198, 1203 (Fed. Cir. 2005).

The district court then found that “Plaintiffs have provided no evidence of an assignment or license before filing the Complaint, instead arguing that Plaintiff had an implied exclusive license with Freed. (Opp’n 2-5.) While the Court is convinced that there are sufficient facts that support an implied exclusive license from Freed, Federal Circuit precedent requires a license to be in writing to confer standing.” Enzo APA & Sons, Inc. v. Geapag A.G., 134 F.3d 1090, 1093 (Fed. Cir. 1998) (‘While we acknowledge that a license may be written, verbal, or implied, if the license is to be considered a virtual assignment to assert standing, it must be in writing.’).

The district court also found that the attempt to cure the assignment after filing could not remedy the lack of standing. “Further, Plaintiff’s attempt to cure assignment after filing the Complaint cannot remedy standing. Id. (holding that ‘nunc pro tunc assignments are not sufficient to confer retroactive standing’ where no written transfer of rights under the patent had been made at the time claims were brought). Lastly, standing cannot be remedied by amending the Complaint and joining the inventor, Freed, because he no longer has any rights to the ‘764 Patent per his two assignments.”

As a result, the district court dismissed the complaint with prejudice.

Freed Designs, Inc. v. Sig Sauer, Inc., Case No. 2:13-cv-09570-ODW (AGRx)

The authors of are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or