In a patent infringement action brought against eight automobile manufacturers, the U.S. Court of Appeals for the Federal Circuit concluded that the plaintiff lacked standing to assert any of the three patents at-issue.  MHL Tek, LLC v. Nissan Motor Co., et al., Case Nos. 10-1287, -1317, ‑1318 (Fed. Cir., Aug. 10, 2011) (Gajarsa, J.).

Plaintiff MHL Tek asserted infringement of U.S. Patent Nos. 5,663,496 (the ’496 patent), 5,741,966 (the ’966 patent) and 5,731,516 (the ’516 patent).  The patents relate to a tire pressure monitoring system.  The ’496 and ’966 patents were divisionals of the same application (the Parent Application).  The ’516 patent was not related to the ’496 or ‘966 patents, but all three patents named the same two inventors.

Two days after the Parent Application was filed, the inventors assigned “the entire right, title and interest … in and to the inventions and discoveries in” the Parent Application to third-party Animatronics, Inc.  Animatronics subsequently assigned its rights to McLaughlin Electronics.  Despite their prior assignment, a week before the suit was filed, the inventors purported to assign their rights in all three patents to plaintiff MHL Tek.  Later, several months after the complaint was filed, despite its prior assignment, Animatronics purportedly assigned its rights to MHL Tek.

At the lower court, the defendants moved to dismiss the action as to all three patents for lack of standing.  The district court granted the defendants’ motion with respect to the ’496 and ’966 patents, agreeing that the inventors assigned their rights in those patents to Animatronics, which had subsequently assigned its rights to McLaughlin, and, thus, MHL Tek lacked standing to sue.

The defendants then filed another motion to dismiss for lack of standing as to the ’516 patent.  The district court found that the ’516 patent was not included within the scope of the original assignment between the inventors and Animatronics, and, thus, the district court denied the motion. 

On appeal, the Federal Circuit affirmed the district court’s dismissal with respect to the ’496 and ’966 patents.  Further, the Federal Circuit reversed the district court’s holding that MHL Tek had standing to assert the ’516 patent.  The Court concluded that the ’516 patent, while not in the same family tree, was within the scope of the “inventions and discoveries” of the Parent Application because each of the limitations of the invention claimed in the ’516 patent is supported in the Parent Application’s written description for purposes of 35 U.S.C. §112.  Thus, the Court found that the pre-suit assignment by the inventors to MHL Tek was ineffective because “the invention claimed by the ’516 patent was covered by the assignment … to Animatronics, which then assigned it to [McLaughlin ],” and, as a result, MHL Tek lacked standing.  

Practice Note:  Assignments broadly drafted to include the entire right, title and interest in “the inventions and discoveries” of one named patent application may inadvertently transfer rights in a patent that issues from an application in a different family but that covers related subject matter.