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KW-2 LLC v. ASUS Computer International Inc.

United States District Court, D. Colorado

March 16, 2016

KW-2, LLC, Plaintiff,
v.
ASUS COMPUTER INTERNATIONAL, et al., Defendants.

ORDER GRANTING MOTIONS TO DISMISS FOR LACK OF STANDING

ROBERT E. BLACKBURN UNITED STATES DISTRICT JUDGE.

The matters before me are (1) Defendant Asus Computer International and Asustek Computer, Inc.’s Motion To Dismiss for Lack of Standing [#32], [1] filed August 11, 2015;[2] and (2) Defendant Dell Inc.’s Motion To Dismiss for Lack of Standing [#31], filed July 31, 2015.[3] I grant the motions and dismiss these actions for lack of federal subject matter jurisdiction.

I. JURISDICTION

Putatively, I have jurisdiction of this matter under 28 U.S.C. §§ 1331 (federal question) and 1338 (patent issues).

II. STANDARD OF REVIEW

Federal courts are courts of limited jurisdiction and thus may adjudicate only claims the Constitution or Congress gives them jurisdiction to determine. Morris v. City of Hobart, 39 F.3d 1105, 1110 (10th Cir. 1994), cert. denied, 115 S.Ct. 1960 (1995); Fritz v. Colorado, 223 F.Supp.2d 1197, 1199 (D. Colo. 2002). Concomitantly, the class of persons authorized to bring suit is limited by constitutional and prudential principles of standing. See Warth v. Seldin, 422 U.S. 490, 500-01, 95 S.Ct. 2197, 2206, 45 L.Ed.2d 343 (1975). “[S]tanding is a threshold issue in every case[.]” Board of County Commisioners of Sweetwater County v. Geringer, 297 F.3d 1108, 1111 (10th Cir. 2002) (citation and internal quotation marks omitted). If a putative plaintiff lacks standing, the court is without subject matter jurisdiction to consider its claims. See, e.g., Warth, 95 S.Ct. at 2206-07; Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208, 215, 94 S.Ct. 2925, 2929, 41 L.Ed.2d 706 (1974).

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). Defendants’ motions present factual attacks on plaintiff’s assertion of standing. Accordingly, I may consider the exhibits presented by the parties to resolve disputed jurisdictional facts. Wheeler v. Hurdman, 825 F.2d 257, 259 n.5 (10th Cir.), cert. denied, 108 S.Ct. 503 (1987). Once its standing has been challenged, plaintiff bears burden to demonstrate that it has standing to bring suit. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 2136, 119 L.Ed.2d 351 (1992).

III. ANALYSIS

This is a suit alleging infringement of United States Patent No. 6, 027, 835 (the “‘835 patent”), which claims rights in a “Cell Electrode Sheet with Displaced Electrode Depolarizing Mixes.” As plaintiff in each of the three consolidated cases herein, KW-2, LLC, claims to be the “exclusive licensee” of the ‘835 patent under the terms of a February 2015, “Exclusive Patent License Agreement” (the “License Agreement”) between itself and Ryujin Patent & Licensing Ltd. (“Ryujin”), a Japanese corporation designated therein as the “Owner” of the ‘835 patent. Defendants move to dismiss on the ground that plaintiff lacks standing to sue to enforce the patent.

Although standing is circumscribed by both constitutional and prudential limitations, see Warth, 95 S.Ct. at 2205; Geringer, 297 F.3d at 1111, defendants’ arguments implicate only prudential standing.[4] Prudential standing is comprised of “a judicially-created set of principles that, like constitutional standing, place[] ‘limits on the class of persons who may invoke the courts' decisional and remedial powers, ’" even when constitutional standing requirements are satisfied. Geringer, 297 F.3d at 1112 (quoting Warth, 95 S.Ct. at 2205). Among the prudential standing doctrines is the requirement that a plaintiff must assert its “own rights, rather than those belonging to third parties.” Sac & Fox Nation of Missouri v. Pierce, 213 F.3d 566, 573 (10th Cir. 2000), cert. denied, 121 S.Ct. 1078 (2001). It is that principle which forms the basis of the instant motions.

The Patent Act contemplates that a “patentee” may bring suit “for infringement of his patent.” 35 U.S.C. § 281 (emphasis added). Generally, therefore, only a party who holds legal title to the patent has standing to sue to enforce it. Propat International Corp. v. Rpost, Inc., 473 F.3d 1187, 1189 (Fed. Cir. 2007); Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1551 (Fed. Cir.) (en banc), cert. denied, 116 S.Ct. 184 (1995). This category includes a “person to whom the patent was issued” as well as any “successors in title.” 35 U.S.C. § 100(d). Thus, the assignment of legal title in a patent gives standing to the assignee to bring suit on the patent:

[A] patent is, in effect, a bundle of rights which may be divided and assigned, or retained in whole or part. . . . When a sufficiently large portion of this bundle of rights is held by one individual, we refer to that individual as the owner of the patent, and that individual is permitted to sue for infringement in his own name.

Alfred E. Mann Foundation For Scientific Research v. Cochlear Corp., 604 F.3d 1354, 1360 (Fed. Cir. 2010). See also Enzo APA & Son, Inc. v. Geapag A.G., 134 F.3d 1090, 1093 (Fed. Cir. 1998) (assignment may take "the form of the entire patent, an undivided part or share of the entire patent, or all rights under the patent in a specified geographical region of the United States”). Conversely, “[a]ny less than a complete transfer of these rights is merely a license, in which case the title remains with the owner of the patent and the suit must be brought in its name.” Enzo APA & Son, Inc., 134 F.3d at 1093.

Yet “[e]ven if the patentee does not transfer formal legal title, the patentee may effect a transfer of ownership for standing purposes if it conveys all substantial rights in the patent to the transferee.” Propat International Corp., 473 F.3d at 1189. Under this “limited exception, ” the transfer creates “an exclusive license, rendering the licensee the virtual assignee.” Id. A party who does not have “all substantial rights” in the patent does not have standing to sue for ...


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