Corrected assignment effective to show ownership, willful infringement finding and prejudgment interest award affirmed

Jodi A. Schwendimann, Cooler Concepts, Inc. v. Arkwright Advanced Coating, Inc.

Docket No. 2018-2416, 2019-1012
May 13, 2020

Brief Summary: DC finding of willful infringement and award of prejudgment interest affirmed; “corrected nunc pro tunc” assignment effective to show ownership.

Summary: Arkwright appealed DC finding of willful infringement of six US patents regarding methods for transferring images onto a colored base and about $2.6 million damages and pre-judgment interest award. Ms. Schwendimann became the owner of patent applications leading to the disputed patents as part of a settlement with her previous employer. The original complaint against Arkwright was filed in 2008 and re-filed in 2011 following reexamination of one of the disputed patents. Arkwright moved to dismiss the complaint because an assignment was incorrect (i.e., Ms. Schwendimann was not the owner) but the assignment was corrected (also in 2011) and the DC found standing. Arkwright unsuccessfully filed an interlocutory appeal of this issue, which was denied in 2013 (Schwendimann, FC 2013). In this appeal, Arkwright argued unsuccessfully that Ms. Schwendimann lacked standing and that the DC erred in its prejudgment interest award. The FC panel explained that all that was required of the complaint is an allegation of facts by Ms. Schwendimann “that she is the owner by assignment of the ‘845 patent and Appellants infringed that patent”, which was present in the complaint and, therefore, “there is no ‘standing’ issue to be decided in this appeal” (citing Lone Star, FC 2019 (unavailable to the DC at the time of its decision) which brought the FC “into accord with” Lexmark, US 2014 (“whether a party possesses all substantial rights in a patent does not implicate standing or subject-matter jurisdiction”); see FN6 for a discussion of the dissent). “[T]he only questions” the FC needed to decide here, it explained, was “whether Ms. Schwendimann was a patentee at the time her action was filed and, if that status was conferred upon her by assignment, whether that assignment is reflected in a written instrument with the meaning of 35 U.S.C. § 261” for which “there are no form or content requirements” (§ 261; Enzo, FC 1998 (citing 35 U.S.C. § 100(d)). And “[w]ho has legal title is a question of state law.” (Enovsys, FC 2010; Jim Arnold, FC 1997; Tri-Star, FC 2010 (“interpreted in accordance with contract statutes and common law in the state where the assignment took place”); i.e., Minnesota in this case). The FC panel found no error with the DC decision (e.g., “ACT intended to assign” it, “the 2011 Assignment…merely reaffirmed the 2002 agreement”, “mutual mistake of the parties”, “good faith mistake” (Tri-Star); Speedplay, FC 2000 (license agreement listing wrong patent number effective since “substantial patent rights were transferred”); “By virtue of the reformation, the written instrument was corrected nunc pro tunc, to the point of the assignment.”) The FC panel also found no error with the DC’s award of prejudgment interest at “10 percent per year, starting from the first date of infringement” which was proper under Minnesota statutes (Nickson, FC 1988; Comcast IP, FC 2017).

This entry was posted in Assignment / Ownership, Damages, Willfullness. Bookmark the permalink.

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