Freed Designs, Inc. v. Sig Sauer, Inc.

Filing 54

ORDER GRANTING DEFENDANTS MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION 43 WITHOUT LEAVE TO AMEND by Judge Otis D. Wright, II. (MD JS-6. Case Terminated). (lc). Modified on 12/3/2014 (lc).

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JS-6

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United States District Court
Central District of California

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FREED DESIGNS, INC.,
Plaintiff,

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Case № 2:13-cv-09570-ODW(AGRx)

v.

ORDER GRANTING

SIG SAUER, INC.,

DEFENDANT’S MOTION TO

Defendant.

DISMISS FOR LACK OF SUBJECT

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MATTER JURISDICTION [43]

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I.

INTRODUCTION

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Before the Court is Defendant Sig Sauer’s Motion to Dismiss for Lack of

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Subject Matter Jurisdiction. (ECF No. 43.) Sig Sauer argues that Plaintiff Freed

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Designs lacks standing to sue because Plaintiff was not assigned U.S. Patent No.

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6,928,764 (the ’764 Patent) at the time they filed this suit. Plaintiff argues that it had

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an implied exclusive license from the inventor, Robert Freed, and therefore standing

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to sue. For the reasons discussed below, the Court GRANTS Defendant’s Motion to

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Dismiss. (ECF No. 43.)

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II.

FACTUAL BACKGROUND

Robert Freed is the sole inventor of the ’764 Patent, titled “Grip Extender For

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Hand Gun.” Freed is also the sole owner and President of Plaintiff Freed Designs.

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On December 31, 2013, Plaintiff filed suit against Defendant Sig Sauer alleging that

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Defendant makes, sells, and offers to sell magazine extenders that infringe the ’764

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Patent. (ECF No. 1.) In its Answer, Defendant asserted a “lack of standing” defense.

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(ECF No. 18 ¶ 18.)

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On May 15, 2014, Freed executed an “Assignment of the Invention and Patent

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Application” transferring to Plaintiff his “entire right, title, and interest in and to” the

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’764 Patent. (Siavelis Decl. Ex. 4.) On September 3, 2014, Freed executed another

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assignment titled “Assignment of Rights, Title and Interest in Invention.” (Siavelis

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Decl. Ex. 5.) This second assignment was styled as a nunc pro tunc assignment,

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purporting to have an effective date of August 16, 2005 (the issue date of the ’764

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Patent). (Id.)
On October 24, 2014 Defendant filed a Motion to Dismiss for Lack of Subject

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Matter Jurisdiction. (ECF No. 43.) Plaintiffs timely opposed. (ECF No. 50.)

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Defendants timely replied. (ECF No. 52.) On November 24, 2014, the Court held a

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hearing at which counsel for the parties appeared. That Motion is now before this

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Court for consideration.

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III.

LEGAL STANDARD

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Federal Rule of Civil Procedure 12(b)(1) provides for dismissal of a complaint

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for lack of subject-matter jurisdiction. The Article III case or controversy requirement

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limits a federal court's subject-matter jurisdiction, requiring that plaintiffs have

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standing and that claims be ripe for adjudication. Chandler v. State Farm Mut. Auto.

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Ins. Co., 598 F.3d 1115, 1121–22 (9th Cir. 2010). “The party asserting federal subject

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matter jurisdiction bears the burden of proving its existence.” Id. at 1122; see also

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Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994).

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IV.

DISCUSSION

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Defendants argue that Plaintiff did not possess rights to the ’764 Patent at the

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time Plaintiff filed the Complaint and any post-Complaint assignment cannot cure

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Plaintiff’s standing defect. (Mot. 5.) A court may exercise jurisdiction only if a

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plaintiff has standing to sue on the date it files suit. Abraxis Bioscience, Inc. v.

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Navinta LLC, 625 F.3d 1359, 1364 (Fed. Cir. 2010) (citing Keene Corp. v. United

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States, 508 U.S. 200, 207 (1993)). The Federal Circuit has held that in a patent

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infringement action, the plaintiff must demonstrate that it held enforceable title to the

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patent at the inception of the lawsuit to assert standing. Id. (quotations and citations

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omitted); see also 35 U.S.C. §§ 100(d), 281 (A “patentee” is entitled to bring a “civil

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action for infringement of his patent,” and the patentee includes the “successors in title

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to the patentee.”). Thus, “if the original plaintiff lacked Article III initial standing, the

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suit must be dismissed, and the jurisdictional defect cannot be cured” after the

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inception of the lawsuit. Id. (quoting Schreiber Foods, Inc. v. Beatrice Cheese, Inc.,

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402 F.3d 1198, 1203 (Fed. Cir. 2005).

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Plaintiffs have provided no evidence of an assignment or license before filing

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the Complaint, instead arguing that Plaintiff had an implied exclusive license with

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Freed. (Opp’n 2-5.) While the Court is convinced that there are sufficient facts that

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support an implied exclusive license from Freed, Federal Circuit precedent requires a

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license to be in writing to confer standing. Enzo APA & Sons, Inc. v. Geapag A.G.,

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134 F.3d 1090, 1093 (Fed. Cir. 1998) (“While we acknowledge that a license may be

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written, verbal, or implied, if the license is to be considered a virtual assignment to

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assert standing, it must be in writing.”).

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assignment after filing the Complaint cannot remedy standing. Id. (holding that “nunc

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pro tunc assignments are not sufficient to confer retroactive standing” where no

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written transfer of rights under the patent had been made at the time claims were

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brought).

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joining the inventor, Freed, because he no longer has any rights to the ’764 Patent per

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his two assignments. (See Siavelis Decl. Exs. 4, 5.)

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Further, Plaintiff’s attempt to cure

Lastly, standing cannot be remedied by amending the Complaint and

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V.

CONCLUSION

For the reasons discussed above, the Court GRANTS Defendant’s Motion to
Dismiss without leave to amend. (ECF No. 43)
IT IS SO ORDERED.

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December 2, 2014

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____________________________________
OTIS D. WRIGHT, II
UNITED STATES DISTRICT JUDGE

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