In reversing a district court’s decision that granted a patent owner’s standing to sue an Abbreviated New Drug Application (ANDA) filer, the U.S. Court of Appeals for the Federal Circuit held that the patent owner must demonstrate that it held enforceable title to the patent “at the inception of the lawsuit” to assert standing. Abraxis Bioscience, Inc. v. Navinta LLC., Case No. 09-1539 (Fed. Cir., Nov. 9, 2010) (Gajarsa, J.).

In November 2006, Navinta filed an ANDA for a generic version of Naropin®, which is marketed by Abraxis. Abraxis sued Navinta for infringement of U.S. Patent Nos. 4,870,086 (the ’086 patent), 5,670,524 (the ’524 patent) and 5,834,489 (the ’489 patent).

The ’086 patent was assigned to Astra Lakemedel Aktiebolag (Astra L) in 1986. The ’524 and ’489 patents were assigned to AstraZeneca AB (AZ-AB) in 2000. In April 2006, Abraxis entered into an asset purchase agreement (APA) with AstraZeneca (AZ-UK). The APA provided that AZ-UK “shall or shall cause one or more of its Affiliates to, Transfer to [Abraxis], all of the right, title and interests” in the asserted patents. On June 28, 2006, AZ-UK and Abraxis executed an intellectual property assignment agreement assigning the three patents to Abraxis.

On the same day that Abraxis filed its complaint against Navinta, Astra L and AZ-AB each executed an assignment of their respective patents to AZ-UK. The assignments referred the APA and stated that the assignments were executed to allow AZ-UK to “further convey” the patents to Abraxis. Eight months later, AZ-UK and Abraxis executed another agreement stating that, pursuant to the 2006 APA, AZ-UK confirmed that Abraxis acquired the ownership of the asserted patents no later than June 28, 2006.

Navinta argued that Abraxis lacked standing because Abraxis did not own the asserted patents at the time it filed the complaint. The district court, however, found that although there was a break in the chain of title, the “intent” of the various assigning entities was sufficient to imply a nunc pro tunc assignment based on the relationship between the corporate entities. Navinta appealed.

The Federal Circuit reversed, explaining that the contractual language of the APA indicated that the actual transfer of the asserted patents was to occur in the future (that AZ-UK “shall, or shall cause one or more of its Affiliates” to assign). Therefore, under the Federal Circuit’s “promise to assign” precedent, a subsequent written agreement was necessary to consummate the assignment. Further, even assuming the March 2007 agreements were retroactive, title to the asserted patents did not automatically vest in Abraxis upon the March 2007 transfer to AZ-UK, because the June 2006 Assignment did not result in an immediate transfer of “expectant interests” to Abraxis. For title to vest in Abraxis, a further assignment by AZ-UK was required. Finally, Abraxis argued that “equitable title” to the asserted patents through the APA was sufficient to confer standing, citing Arachnid. The Federal Circuit distinguished Arachnid, noting it concerned a present agreement to assign rights to future inventions. In contrast, the June 2006 assignment attempted to assign rights to existing patents, but was ineffective because AZ-UK did not own the patents at the time. Without ownership, AZ-UK had no authority to convey the equitable or legal titles to Abraxis.