IP Law Daily Dismissal of infringement suit reversed so trial court could consider standing issue
Monday, April 12, 2021

Dismissal of infringement suit reversed so trial court could consider standing issue

By Kevin M. Finson, J.D.

An appeal of a dismissal was remanded because the trial court had not had an opportunity to consider new evidence as to ownership of the patent in suit, which presented a standing issue.

A motion to dismiss cannot be considered while a potential issue of standing remains unresolved, the U.S. Court of Appeals for the Federal Circuit has held. WiNet Labs, LLC sued Motorola Mobility, LLC alleging that Motorola infringed its patent. A district court granted Motorola’s motion to dismiss the case with prejudice. In a motion for attorney fees, Motorola for the first time questioned WiNet’s ownership of the patent-in-suit. The district court stayed resolution of Motorola’s motion for fees pending WiNet’s appeal of the dismissal. The appellate court found that the record created a serious question about WiNet’s Article III standing. Thus, the court vacated the judgment and remanded the case so that the district court may address the Article III standing question for the first time (WiNet Labs, LLC v. Motorola Mobility, LLC, April 12, 2021, Taranto, R.).

WiNet filed suit against Motorola Mobility LLC (Motorola) for infringement of U.S. Patent No. 7,593,374 (the ’374 patent). The trial court granted Motorola’s motion to dismiss for failure to state a claim, and WiNet appealed the dismissal to the Federal Circuit. After the dismissal was granted, Motorola filed a petition for attorney fees and in the process suggested that WiNet did not actually own the ’374 patent. In their submissions on the fee motion the parties produced evidence showing a dispute as to ownership which the trial court did not have the opportunity to address before it ruled on the dismissal.

Ownership. WiNet claimed ownership by way of a 2019 assignment from the named inventors of the patent. The parties agreed, however, that in 2005 the inventors had assigned all their interest to M-Labs, Ltd., a Virgin Islands corporation not a party to the suit. WiNet claimed that the ownership of the patent had reverted to the named inventors when M-Labs ceased operations, but there was no reversionary language in the 2005 assignment. In addition, WiNet could point to no Virgin Islands corporations law which would support its reversion theory. The court held that this raised a grave doubt regarding WiNet’s Article III standing, as WiNet could not sue for infringement of a patent in which it held no rights.

Without ruling on whether it could resolve the question itself, the Federal Circuit remanded the case so that the trial court could decide the issue of standing in the first instance, and did not address the dismissal for failure to state a claim.

The case is No. 2020-2235.

Attorneys: Matthew Michael Wawrzyn (Wawrzyn LLC) for WiNet Labs LLC. Louis A. Klapp (Riley Safer Holmes & Cancila LLP) for Motorola Mobility LLC.

Companies: WiNet Labs LLC; Motorola Mobility LLC

MainStory: TopStory Patent FedCirNews GCNNews

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