Wyers Products Group v. Cequent Performance Products, Inc.

Filing 60

ORDER granting Motion to Amend Caption & Denying Motion to Dismiss. The plaintiff's Motion To Amend Case Caption or, in the Alternative, To Join Philip W. Wyers as Co-Plaintiff [# 27 ] is GRANTED in part. The caption of this case SHALL BE AMENDE D to include Philip W. Wyers as a named plaintiff in the original complaint [# 1 ] and the amended complaint [# 13 ]. Otherwise, the plaintiff's Motion To Amend Case Caption or, in the Alternative, To Join Philip W. Wyers as Co-Plaintiff [# 27 ] is DENIED as moot. Cequent's Motion To Dismiss Under Rule 12(b)(1) [# 23 ] is DENIED. By Judge Robert E. Blackburn on 9/17/2013.(klyon, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Robert E. Blackburn
Civil Action No. 12-cv-02640-REB
WYERS PRODUCTS GROUP, a Colorado corporation,
PHILIP W. WYERS,
Plaintiffs,
v.
CEQUENT PERFORMANCE PRODUCTS, INC.,
Defendants.

ORDER GRANTING MOTION TO AMEND CAPTION
& DENYING MOTION TO DISMISS
Blackburn, J.
This matter is before me on (1) Cequent’s Motion To Dismiss Under Rule
12(b)(1) [#23]1 filed January 29, 2013; and (2) the plaintiff’s Motion To Amend Case
Caption or, in the Alternative, To Join Philip W. Wyers as Co-Plaintiff [#27] filed
February 15, 2013. The parties filed responses [#29 & #33] and corresponding replies
[#32 & #34] addressing both motions. The defendant filed a notice [#58], noting a new
case it says is relevant to its pending motion to dismiss. I grant the motion to amend the
caption, deny the motion for joinder as moot, and deny the motion to dismiss.
I. JURISDICTION
This case arises under the patent laws of the United States. I have jurisdiction over
this case under 28 U.S.C. § 1331 (federal question) and § 1338(a) (patent).

1

“[#23]” is an example of the convention I use to identify the docket number assigned to a
specific paper by the court’s case management and electronic case filing system (CM/ECF). I use this
convention throughout this order.

II. STANDARD OF REVIEW
Federal courts are courts of limited jurisdiction and thus may adjudicate only claims
that the Constitution or Congress has given them authority to hear and determine. Morris
v. City of Hobart, 39 F.3d 1105, 1110 (10th Cir. 1994), cert. denied, 115 S.Ct. 1960
(1995); Fritz, 223 F.Supp.2d at 1199 (D. Colo. 2002). The defendant, Cequent
Performance Products, Inc., argues that plaintiff, Wyers Products Group, does not have
standing to assert the patent infringement claims alleged in the complaint. Absent a
plaintiff with proper standing, the court does lacks subject matter jurisdiction over the
plaintiff’s claims. See, e.g., Warth v. Seldin, 422 U.S. 490, 501 - 502 (1975) (federal
court’s jurisdiction may be invoked only by a party with proper standing); Schlesinger v.
Reservists Comm. to Stop the War, 418 U.S. 208, 215 (1974) (absence of standing
suffices to prevent invocation of power of federal judiciary by complaining party).
A motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) may
consist of either a facial attack or a factual attack on the complaint. Holt v. United States,
46 F.3d 1000, 1002 (10th Cir. 1995). Assuming Wyers Products Group is the only plaintiff
in this case, Cequent’s challenge is a factual attack on standing and, therefore, subject
matter jurisdiction. In this circumstance, I may consider the exhibits presented by the
parties to resolve disputed jurisdictional facts under Rule 12(b)(1). Wheeler v. Hurdman,
825 F.2d 257, 259 n. 5 (10th Cir.), cert. denied, 484 U.S. 986 (1987). Once standing is
challenged, the plaintiff has the burden to demonstrate that it has standing. Lujan v.
Defenders of Wildlife, 504 U.S. 555, 561 (1992).

2

III. FACTS
This case involves claims of patent infringement concerning patents referred to as
the ‘115 patent and the ‘121 patent. In the original complaint [#1] and the amended
complaint [#13], the sole plaintiff named in the caption is “Wyers Products Group, a
Colorado corporation.” In the opening line of the body of the original complaint [#1], Philip
W. Wyers and Wyers Products Group are listed as plaintiffs. In the body of both the
original and amended complaints, Philip W. Wyers is listed as a party and referred to as
“P. Wyers.” Complaint [#1], ¶ 3; amended complaint [#13], ¶ 3. In both complaints, it is
alleged that “P. Wyers is the owner and President of Wyers Products Group. P. Wyers is
the inventor listed on the patents identified in this Complaint and they have been
exclusively assigned to Wyers Products.” Id., ¶ 5.
In a previous lawsuit, Mr. Wyers and Wyers Products Group (WPG) alleged that
WPG is the exclusive licensee to the ‘115 patent by virtue of an oral license from Philip
Wyers. Wyers v. Master Lock, Civil Action No. 06-cv-00619-LTB-MJW (D. Colo.), First
Amended Complaint [#43], ¶ 18. Noting this previous allegation and the allegation in the
above-captioned case that the patents in suit have been exclusively assigned to WPG, the
defendant sought documentation evidencing an assignment. WPG does not have a
written instrument granting an assignment or license of the ‘115 or ‘121 patents from Philip
Wyers to WPG. Memorandum in support of motion to dismiss [#24], Exhibit A (Cavanaugh
Declaration), ¶ 15. However, Philip Wyers says WPG “has the exclusive right to
manufacture and distribute products embodying the inventions disclosed in the ‘115 and
‘121 patents.” Response [#29], Exhibit 1 (Wyers Declaration), ¶ 8. There is no evidence
that Philip Wyers assigned title to the two patents to WPG or granted an exclusive license

3

to WPG via any written document. Therefore, the evidence in the record shows that any
such assignment or license was oral, not written.
IV. AMENDMENT OF CAPTION OR JOINDER
In the end, the resolution of the two motions at issue hinges on whether Philip
Wyers was named properly as a plaintiff in the original complaint [#1]. If he was, then the
plaintiffs have established standing to assert the patent infringement claims stated in the
complaint. If not, then WPG has not shown that it has standing, and it cannot cure this
problem by joining Mr. Wyers as a party.
In the motion to amend the case caption or to join Philip Wyers [#27], the plaintiffs
seek to amend the caption of this case to reflect that Philip Wyers is a co-plaintiff. As
described above, in both the original complaint and the amended complaint, Philip Wyers
is named explicitly as a party to this case and is described as the owner and president of
the other plaintiff, Wyers Products. These allegations are sufficient to notify Cequent of
the identity of Mr. Wyers as a plaintiff asserting claims against Cequent.
According to Cequent, the failure to list Philip Wyers in the caption of the original
complaint means Mr. Wyers was not a plaintiff when this case first was filed. Under FED.
R. CIV. P. 10(a), the “title of the complaint must name all the parties.” Given the specific
allegations identifying Mr. Wyers as a party in the opening line of the original complaint
and the “parties” section of the original complaint, I find and conclude that Mr. Wyers was
identified effectively as a plaintiff in the original complaint. The same is true of the
amended complaint. The fact that Mr. Wyers was not named in the caption of the original
complaint does not render ineffective the specific allegations in the complaint designating
Mr. Wyers as a party. That would impermissibly elevate form over substance. Cequent
has not identified any prejudice it has suffered as a result of the fact that Philip Wyers was
4

omitted from the caption of the original complaint.
Because Philip Wyers was named and identified expressly as a plaintiff in the
“parties” section of both complaints, it is proper to amend the caption to conform to the
specific allegations of both complaints. I reject the arguments of Cequent to the contrary.
With the caption amended, there is no need to address the plaintiffs’ request for joinder of
Mr. Wyers.
V. STANDING
A “patentee” has a remedy by civil action for patent infringement. 35 U.S.C. § 281.
As defined by the Patent Act, a patentee includes the patentee to whom the patent issued
and successors in title to the patentee. 35 U.S.C. § 100(d). This provision has been
interpreted to require that a suit for patent infringement be brought by a party holding legal
title to the patent. See, e.g., Arachnid, inc. v. Merit Indus., Inc., 939 F.2d 1574, 1578 1579 (Fed. Cir. 1991). However, standing to assert a claim of patent infringement has
been accorded, “in certain limited circumstances, where all substantial rights under the
patent have been transferred in the form of an exclusive license, rendering the licensee the
virtual assignee.” Enzo APA & Son, Inc., 134 F.3d 1090, 1093 (Fed. Cir. 1998).
Addressing the issue of standing, WPG argues that it owns the patents in suit
because they were transferred from Philip Wyers to WPG by operation of law.
Alternatively, WPG argues that it has an exclusive license to use the patents, which
license was granted by Philip Wyers. As owner or exclusive licensee, WPG argues, it has
standing to bring patent infringement claims against Cequent. According to WPG, if Mr.
Wyers must be named as a plaintiff to establish standing, then standing has been
established because Mr. Wyers has been named as a plaintiff.

5

A. Assignment
Both of the patents in suit were issued to Philip W. Wyers. Cavanaugh Declaration,
¶¶ 6-7. There is no evidence of a valid assignment of the patents in suit from Philip Wyers
to WPG. In his declaration, Mr. Wyers says he “conceived these inventions during my
employment and as part of my job duties for Wyers Products, with the understanding that
Wyers Products would be the beneficiary of the inventions.” Response [#29], Exhibit 1
(Wyers Declaration), ¶ 8. According to Mr. Wyers, “Wyers Products has the exclusive right
to manufacture and distribute products embodying the inventions disclosed in the ‘115 and
‘121 patents.” Id., ¶ 9.
Mr. Wyer’s contention that he conceived the inventions as an employee of WPG
does not establish an assignment of the patents to WPG. Under the hired to invent
doctrine, an employee may be required to assign a patent to his or her employer if the
employee creates an invention while working under a job duty “for inventing or for solving a
particular problem that requires invention . . .” Scott Sys., Inc. v. Scott, 996 P.2d 775,
778 (Colo. Ct. App. 2000). “(U)nder these circumstances, the employee has produced
only that which he was employed to produce, and the courts will find an implied contract
obligation to assign any rights to the employer.” Id. Even if Mr. Wyer’s has an implied
contractual obligation to assign the patents to WPG, there is no evidence that there has
been an actual assignment. This purported implied obligation alone is not enough to
establish that WPG owns the patents. Thus, WPG has not shown that it has standing
based on an assignment of the ‘115 and ‘121 patents from Mr. Wyers to WPG.
B. Exclusive License
WPG contends it is has an exclusive licensee under an oral exclusive license

6

granted by Mr. Wyers. When an exclusive licensee seeks to assert a claim for patent
infringement, the licensee must join the owner of the patent as a party to the case.
Morrow v. Microsoft Corp., 499 F.3d 1332, 1340 (Fed. Cir. 2007). In the circumstances
addressed in Morrow, joinder of the patent owner was required to satisfy “prudential
standing concerns.” Id.
In Enzo APA & Son, Inc., the United States Court of Appeals for the Federal Circuit
addressed the question of whether an oral exclusive license confers Article III standing on
the exclusive licensee. 134 F.3d 1090, 1093 (Fed. Cir. 1998). The Enzo court noted that,
generally, only a party holding legal title to a patent has standing to bring a patent
infringement action. Id. at 1093. The Enzo court noted a limited exception to this rule
which accords standing to a “virtual assignee” of a patent. Id. A licensee is a “virtual
assignee” of a patent when “all substantial rights under the patent have been transferred in
the form of an exclusive license . . . .” Id.
The Enzo court held, however, that an oral exclusive license, as opposed to a
written exclusive license, does not confer Article III standing on the licensee.
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 limited exception we have provided conferring standing on
licensees is restricted to virtual assignees. As such, the licensing
arrangement conferring such must, logically, resemble an assignment in both
form and substance. Under the 35 U.S.C. § 261 (1994), “[a]pplications for
patent, patents, or any interest therein, shall be assignable in law by an
instrument in writing.” If we were to expand the exception to include verbal
licenses, the exception would swallow the rule. Parties would be free to
engage in revisionist history, circumventing the certainty provided by the
writing requirement of section 261 by claiming to be patentee by virtue of a
verbal licensing arrangement.
Id.
Under the law of patent infringement, if the original plaintiff lacks Article III standing
7

when the suit is filed, the suit must be dismissed, and the jurisdictional defect cannot be
cured by the addition of a party with standing. Paradise Creations, Inc. v. U V Sales,
Inc., 315 F.3d 1304, 1309 (Fed.Cir.2003). Similarly, the lack of standing cannot be cured
by a post-filing purchase of an interest in the patent in suit. Gaia Techs., Inc. v.
Reconversion Techs., Inc., 93 F.3d 774, 780 (Fed.Cir.1996). On the other hand, “(i)f the
original plaintiff had Article III standing, any prudential standing concerns may be
overcome by adding a plaintiff with proper standing.” Schreiber, 402 F.3d at 1203 n. 4.
Standing alone, WPG does not have Article III standing to bring this suit because
any exclusive license it holds is not in writing. WPG can demonstrate standing at the time
the original complaint was filed only if it can show that the owner of the patents, Mr. Wyers,
was named properly as a plaintiff when this action was filed. As discussed above, Mr.
Wyers was named and identified properly as a plaintiff when this action was filed.
Standing together, WPG and Mr. Wyers had standing to assert patent infringement claims
against Cequent when this case was filed, and they continue to have standing to assert
those claims. Thus, I deny Cequent’s motion to dismiss.
VI. CONCLUSION & ORDERS
Philip Wyers was a named plaintiff in the original complaint [#1] despite the fact that
his name was omitted from the caption of the complaint. The motion to amend the case
caption [#34] is granted to conform the caption of this case to the substantive allegations of
the complaint and the amended complaint. Standing together, WPG and Mr. Wyers had
standing to assert patent infringement claims against Cequent when this case was filed,
and they continue to have standing. Accordingly, Cequent’s motion to dismiss is denied.

8

THEREFORE, IT IS ORDERED as follows:
1. That the plaintiff’s Motion To Amend Case Caption or, in the Alternative, To
Join Philip W. Wyers as Co-Plaintiff [#27] filed February 15, 2013, is GRANTED in part;
2. That the caption of this case SHALL BE AMENDED to include Philip W. Wyers
as a named plaintiff in the original complaint [#1] and the amended complaint [#13];
3. That otherwise, the plaintiff’s Motion To Amend Case Caption or, in the
Alternative, To Join Philip W. Wyers as Co-Plaintiff [#27] filed February 15, 2013, is
DENIED as moot; and
4. That Cequent’s Motion To Dismiss Under Rule 12(b)(1) [#23] filed January
29, 2013, is DENIED.
Dated September 17, 2013, at Denver, Colorado.
BY THE COURT:

9