To establish Article III standing, a plaintiff must demonstrate that it holds an enforceable title to the patent at the inception of an infringement action, and jurisdictional defects cannot be cured after the complaint has been filed.
Abraxis Bioscience, Inc. v. Navinta LLC, No. 2009-1539 (Fed. Cir. Nov. 9, 2010).
A generic drug company appealed a district court’s finding that its Abbreviated New Drug Application (“ANDA”) product would infringe a series of patents relating to a local/regional anesthetic indicated for use in surgery and for acute pain management. The issue was whether a November 2007 assignment of ownership to the plaintiff could be given retroactive effect to an earlier June 2006 assignment agreement in order to cure a defect in ownership that existed when the complaint was filed in March 2007. The Federal Circuit found that the November 2007 agreement was insufficient to cure the defect, that the plaintiff did not have legal title to the patents and reversed the district court’s holdings to the contrary.
In so holding, the Federal Circuit re-affirmed its previous holdings that in a patent infringement action, “the plaintiff must demonstrate that it held enforceable title to the patent at the inception of the law-suit” and the jurisdictional defect cannot be cured after the complaint has been filed. Moreover, although state law governs the interpretation of contracts generally, “the question of whether a patent assignment clause creates an automatic assignment or merely an obligation to assign is intimately bound up with the question of standing in patent cases,” and is accordingly treated as a matter of federal law.
Under the April 2006 master agreement, the plaintiff agreed that the actual transfer of the patents was to occur by means of a separate “IP Assignment Agreement.” When the “IP Assignment Agreement” was executed in June 2006, the party purporting to assign the asserted patents to the plaintiff did not actually possess their titles and therefore could not assign their rights to the plaintiff. The only exception to this rule—that a party may sue for past infringement transpiring before it acquired legal title if a written assignment expressly grants the party a right to do so—was not applicable here.
Judge Newman dissented, generally faulting the majority for nullifying “over three years of litigation, including full trial of infringement of all three patents, and judicial determination of complex questions of law and fact concerning the Hatch-Waxman Act and its application.” Judge Newman concluded that New York law applied to the agreements at issue, and that under New York law, the plaintiff had ownership of the patents such that it had standing to sue.
A copy of the opinion can be found here.