United States District Court, C.D. California
December 2, 2014
FREED DESIGNS, INC., Plaintiff,
SIG SAUER, INC., Defendant.
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION 
OTIS D. WRIGHT, II, District Judge.
Before the Court is Defendant Sig Sauer's Motion to Dismiss for Lack of Subject Matter Jurisdiction. (ECF No. 43.) Sig Sauer argues that Plaintiff Freed Designs lacks standing to sue because Plaintiff was not assigned U.S. Patent No. 6, 928, 764 (the '764 Patent) at the time they filed this suit. Plaintiff argues that it had an implied exclusive license from the inventor, Robert Freed, and therefore standing to sue. For the reasons discussed below, the Court GRANTS Defendant's Motion to Dismiss. (ECF No. 43.)
II. FACTUAL BACKGROUND
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. On December 31, 2013, Plaintiff filed suit against Defendant Sig Sauer alleging that Defendant makes, sells, and offers to sell magazine extenders that infringe the '764 Patent. (ECF No. 1.) In its Answer, Defendant asserted a "lack of standing" defense. (ECF No. 18 ¶ 18.)
On May 15, 2014, Freed executed an "Assignment of the Invention and Patent Application" transferring to Plaintiff his "entire right, title, and interest in and to" the '764 Patent. (Siavelis Decl. Ex. 4.) On September 3, 2014, Freed executed another assignment titled "Assignment of Rights, Title and Interest in Invention." (Siavelis Decl. Ex. 5.) 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). ( Id. )
On October 24, 2014 Defendant filed a Motion to Dismiss for Lack of Subject Matter Jurisdiction. (ECF No. 43.) Plaintiffs timely opposed. (ECF No. 50.) Defendants timely replied. (ECF No. 52.) On November 24, 2014, the Court held a hearing at which counsel for the parties appeared. That Motion is now before this Court for consideration.
III. LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(1) provides for dismissal of a complaint for lack of subject-matter jurisdiction. The Article III case or controversy requirement limits a federal court's subject-matter jurisdiction, requiring that plaintiffs have standing and that claims be ripe for adjudication. Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1121-22 (9th Cir. 2010). "The party asserting federal subject matter jurisdiction bears the burden of proving its existence." Id. at 1122; see also Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994).
Defendants argue that Plaintiff did not possess rights to the '764 Patent at the time Plaintiff filed the Complaint and any post-Complaint assignment cannot cure Plaintiff's standing defect. (Mot. 5.) A court may exercise jurisdiction only if a plaintiff has standing to sue on the date it files suit. Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359, 1364 (Fed. Cir. 2010) (citing Keene Corp. v. United States, 508 U.S. 200, 207 (1993)). 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. §§ 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).
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."). 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. ( See Siavelis Decl. Exs. 4, 5.)
For the reasons discussed above, the Court GRANTS Defendant's Motion to Dismiss without leave to amend. (ECF No. 43)
IT IS SO ORDERED.