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Epic Sporting Goods V Fungoman
Epic Sporting Goods V Fungoman
MEMORANDUM RULING
Before this Court is a Motion to Dismiss [Record Document 15] filed on behalf of
to Exclude [Record Document 42] filed on behalf of Plaintiffs Epic Sporting Goods, Inc.
Federal Rule of Civil Procedure 12(b)(1) for lack of standing1 as it is undisputed that the
Patent Assignment Agreement at issue was not executed by Plaintiffs until December
11, 2009—11 days after Epic initiated the instant litigation. After reviewing the parties’
memoranda, the Court requested supplemental briefs and heard oral arguments on the
issue of standing, particularly the issue of whether the subsequent execution of the
1
Defendants also seek dismissal of Plaintiffs’ Complaint pursuant to Rule 12(b)(6)
for failure to state a claim upon which relief may be granted. Because the Court finds
that it lacks subject matter jurisdiction and that dismissal is warranted pursuant to Rule
12(b)(1), this ruling will not address Defendants’ Rule 12(b)(6) arguments.
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See Record Documents 40, 41, and 47. Prior to oral arguments, Plaintiff filed a motion
to exclude the original Complaint for Patent Infringement [Record Document 1] from
legal effect. See Record Document 42. Because the procedural issue raised in
for the reasons stated herein, Defendants’ Motion to Dismiss [Record Document 15] is
Rule 12(b)(1).
FACTUAL BACKGROUND
“Baseball Fielding Practice Machine,” was duly and legally issued in the name of Thomas
Wilmot. [Record Document 15, Ex. A]. On November 30, 2009, Plaintiff Epic Sporting
Goods (“Epic”) filed a Complaint for Patent Infringement [Record Document 1] against
Defendants (“Fungoman”), James Romulo Cucjen (“Cucjen”), and Dennis Randall Duron
assignment of all right, title, and interest in and to” the ‘938 patent and alleges
Defendants are liable for literal infringement of the ‘938 Patent (Count One),
Defendants’ actions have been willful and deliberate (Counts Three and Four). [Record
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Document 1]. On February 2, 2010, Epic amended its Complaint to name Thomas L.
Defendants now move for dismissal of this action pursuant to Rule 12(b)(1)
because Epic did not have any rights, title, or interest in and to the ‘938 Patent on
November 30, 2009, the date on which the original complaint was filed, and therefore
lacked standing to bring this action. Defendants point to the Patent Assignment
Agreement whereby Wilmot assigned “all right, title, and interest in, to, and under” the
‘938 Patent to Epic, which contains a draft date of November 16, 2009, but was not
actually executed by the parties until December 11, 2009—11 days after Epic filed suit
against Defendants for patent infringement. See Record Document 23, Exhibit 6.
Motions to dismiss filed pursuant to Rule 12(b)(1) of the Federal Rules of Civil
Procedure allow a party to challenge the subject matter jurisdiction of the district court
to hear a case. Fed. R. Civ. P. 12(b)(1). In examining a Rule 12(b)(1) motion, the
Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir.), cert. denied, 454 U.S. 897, 102
S.Ct. 396, 70 L.Ed.2d 212 (1981). Therefore, lack of subject matter jurisdiction may be
found in any one of three instances: (1) the complaint alone; (2) the complaint
supplemented by undisputed facts plus the court's resolution of disputed facts. Barrera-
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Montenegro v. United States, 74 F.3d 657, 659 (5th Cir. 1996); Williamson, 645 F.2d at
413.
standing to bring suit, the plaintiff—as the party invoking federal jurisdiction—bears the
“injury in fact” that is (a) concrete and particularized and (b) actual or imminent; (2) a
casual connection between the injury and the conduct complained of; and (3) the
likelihood that a favorable decision will redress the injury. Little v. KPMG LLP, 575 F.3d
533, 540 (5th Cir. 2009) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112
S.Ct. 2130, 119 L.Ed.2d 351 (1992)). Ordinarily, a district court considering a motion to
dismiss “must accept as true all material allegations of the complaint, and must
construe the complaint in favor of the complaining party.” Lewis v. Knutson, 699 F.2d
230, 237 (5th Cir. 1983) (quoting Warth v. Seldin, 422 U.S. 490, 501-02, 95 S.Ct. 2197,
2206-07, 45 L.Ed.2d 343 (1975)). However, standing “often turns on the nature and
source of the claim asserted.” Morrow v. Microsoft Corp., 499 F.3d 1332, 1339 (Fed.
Cir. 2007) (quoting Warth v. Seldin, 422 U.S. 490, 500, 95 S.Ct. 2197, 45 L.Ed.2d 343
(1975)). In such cases, the question “is whether the constitutional or statutory
provision on which the claim rests properly can be understood as granting persons in
the plaintiff’s position a right to judicial relief.” Id.; see also, Int'l Primate Prot. League
v. Admins. of Tulane Educ. Fund, 500 U.S. 72, 76, 111 S.Ct. 1700, 114 L.Ed.2d 134
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claims that a party presents.”); Valley Forge Christian Coll. v. Ams. United for
Separation of Church & State, 454 U.S. 464, 484, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982)
(“The requirement of standing ‘focuses on the party seeking to get his complaint before
a federal court and not on the issues he wishes to have adjudicated.’ ”). Thus, in an
action for patent infringement, the Court must look to the patent statutes which create
the cause of action, as they also define the nature and scope of patent infringement
claims and the person that is entitled to judicial relief. See id.
Title 35 of the United States Code, Section 281 provides that a “patentee” is
entitled to bring a “civil action for infringement of his patent.” A “patentee” is defined
under the statute as “not only the person to whom the patent was issued but also the
successors in title to the patentee.” 35 U.S.C. § 100(d); see also, Propat Intern. Corp.
v. Rpost, Inc., 473 F.3d 1187, 1189 (Fed. Cir. 2007); Morrow, 499 F.3d at 1339. These
provisions of the Patent Act have generally been interpreted to require that a suit for
infringement of patent rights be brought by a party holding legal title to the patent at
the time of the infringement. Propat, 473 F.3d at 1189; Arachnid, Inc. v. Merit Indus.,
Inc., 939 F.2d 1574, 1579 (Fed. Cir. 1991) (“The general rule is that one seeking to
recover money damages for infringement of a United States patent . . . must have held
the legal title to the patent during the time of the infringement.”) (emphasis in original).
The party holding legal title has “the right to exclude others from making, using,
offering for sale, or selling the invention throughout the United States or importing the
invention into the United States.” 35 U.S.C. § 154(a)(1). If these exclusionary rights
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are violated, it is only the party holding legal title who suffers an “injury in fact” and has
standing to assert a claim for infringement. See Morrow, 499 F.3d at 1339
(“Constitutional injury in fact occurs when a party performs at least one prohibited
action with respect to the patented invention that violates these exclusionary rights.”).
Crown Die & Tool Co. v. Nye Tool & Mach. Works, 261 U.S. 24, 40-41, 43 S.Ct. 254,
258, 67 L.Ed. 516 (1923) (quoting Robinson on Patents, Vol. 3, § 937); see also,
coupled with an assignment of a right of action for past infringements. Id., 261 U.S. at
43, 43 S.Ct. at 259. Under this exception, where the relevant instrument “is effective to
make the plaintiff an assignee,” the plaintiff can maintain an action for damages for
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infringements occurring prior to the assignment. Id. Here, the Patent Assignment
Agreement (“Assignment”) at issue expressly provides Epic “all rights of action arising
from the Patent,” including “all claims for damages by reason of past and future
itself of this “single exception”, Epic must first demonstrate that it held legal title to the
Epic asserts that the effective date of the Assignment is November 16, 2009, the
type-written date shown on the face of the document, but it is undisputed that Epic and
Thomas Wilmot did not execute the Assignment until December 11, 2009—11 days
after Epic commenced this action. See Record Document 23, Exhibit 6; Record
Document 49, Exhibits A and B. Under prevailing jurisprudence, nunc pro tunc
2
The issue of whether a party claiming infringement must have standing to bring
the claim at the time it is pled has been considered in a number of courts. Although
some courts have found that not allowing subsequent events to cure standing defects
would only “exalt form over substance,” see e.g., Valmet Paper Mach., Inc. v. Beloit
Corp., 868 F.Supp. 1085, 1089-90 (W.D.Wis. 1994); Ciba-Geigy Corp. v. Alza Corp.,
804 F.Supp. 614, 635 (D.N.J. 1992), reconsideration denied, 1993 WL 90412 (D.N.J.
1993), compelling policy rationales have urged the majority of courts, including the
Federal Circuit, to hold that a party’s standing to maintain a patent infringement claim
must be determined by that party’s rights on the day the claim was filed. See e.g.,
Galen Med. Assoc., Inc. v. U.S., 74 Fed.Cl. 377 (Fed. Cir. 2006); Schrieber Foods, Inc.
v. Beatrice Cheese, Inc., 402 F.3d 1198, 1203 (Fed. Cir. 2005); Paradise Creations, Inc.
v. UV Sales, Inc., 315 F.3d 1304, 1309 (Fed. Cir. 2003); Switzer Bros., Inc. v. Byrne,
242 F.2d 909, 913 (6th Cir. 1957); Procter & Gamble Co. v. Paragon Trade Brands,
Inc., 917 F.Supp. 305, 309-310 (D.Del. 1995); Quiedan Co. v. Cent. Valley Builders
Supply Co., Inc., 1993 WL 451503, *1-2 (N.D.Cal 1993), aff’d, 31 F.3d 1178 (Fed. Cir.
1994); Arachnid, 939 F.2d at 1579; Afros S.p.A. v. Krauss-Maffei Corp., 671 F.Supp.
1402, 1445 (D.Del. 1987), aff’d, 848 F.2d 1244 (Fed. Cir. 1988).
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assignments of patent rights are not sufficient to confer retroactive standing. As the
Enzo APA & Son, Inc. v. Geapag A.G., 134 F.3d 1090, 1093 (Fed. Cir. 1998) and Gaia
Tech., Inc. v. Reconversion Tech., Inc., 93 F.3d 774, 779-80 (Fed. Cir. 1996) (quoting
Procter & Gamble, 917 F.Supp. at 310); compare Mas-Hamilton Group v. LaGard, Inc.,
156 F.3d 1206, 1210-11 (Fed. Cir. 1998) (nunc pro tunc assignment of the right to sue
for past infringement was irrelevant because the assignment was not being used to
cure deficient standing). Epic has not disputed the substance of Defendants’ legal
arguments, nor has it given the Court reason to stray from the strong rationale
3
Plaintiff argues state law governs the effective date of the Assignment and that,
under Alabama law, the effective date of the Assignment is November 16, 2009. See
Transcript of January 14, 2011 Oral Arguments and Record Document 49. The Court
and Defendants agree with Plaintiff that state law generally governs the validity and
enforcement of a contract and that the Court must look to state law to determine the
ownership of a patent. Plaintiff’s argument is misplaced, however, as it fails to
recognize the distinction between the effective date of the Assignment as it relates to
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lacked a cognizable injury necessary to establish standing under Article III of the
Constitution to confer subject matter jurisdiction upon the district court at the inception
of this lawsuit, and such a defect in standing can be cured neither by a subsequent
315 F.3d at 1309-10 (holding that defect in standing could not be cured by joining the
patentee as an additional plaintiff where the original plaintiff “held no enforceable rights
whatsoever in the patent at the time it filed suit”); Lans v. Digital Equip. Corp., 252
F.3d 1320, 1328-29 (Fed. Cir. 2001) (affirming district court’s denial of motion to
amend the pleadings where original complaint included erroneous allegations that
plaintiff was the owner of the patent); Quiedan Co., 1993 WL 451503, *2 (holding that
where plaintiff lacked standing to sue, the court lacked jurisdiction to join individual as a
(1) whether the Assignment is valid and enforceable as between the parties (a matter
of state law), and (2) whether Plaintiff had Article III standing to assert a cause of
action for patent infringement (a matter of federal law). See e.g., Paradise Creations,
315 F.3d at 1310. Consequently, the cases cited to and relied on by Plaintiff during
Oral Arguments and in its Reply Memorandum are irrelevant to the issue before the
Court.
4
The Federal Circuit has made it clear that:
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party to the action); see also, Fed. Recovery Serv., Inc. v. U.S., 72 F.3d 447, 453 (5th
Cir. 1995) (Rule 15 does not allow a plaintiff to amend its complaint to substitute a new
plaintiff in order to cure the lack of subject matter jurisdiction); Summit Office Park, Inc.
v. U.S. Steel Corp., 639 F.2d 1278, 1282 (5th Cir. 1981) (“where a plaintiff never had
standing to assert a claim against the defendants, it does not have standing to amend
the complaint and control the litigation by substituting new plaintiffs, a new class, and a
new cause of action”); Jackson v. Fid. Nat. Title Ins. Co., 2008 WL 508489, *3
(N.D.Tex. 2008) (“without standing to bring suit, the plaintiff lacks the power to bring in
CONCLUSION
Accordingly, the Court finds that Epic did not have legal title to the ‘938 Patent at
the inception of this lawsuit and that the subsequent execution of the Patent
Assignment Agreement and filing of the Amended Complaint were insufficient to confer
retroactive standing. Consequently, the Court lacks subject matter jurisdiction over
Epic’s claims for patent infringement against Defendants, and this action must be
THUS DONE AND SIGNED in Shreveport, Louisiana, this 10th day of February,
2011.
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