McMAHON, District Judge.
In civil actions 11 Civ. 06604, 11 Civ. 08908, and 12 Civ. 00918, Plaintiff Advanced Video Technologies, LLC ("AVT"), a New York corporation with its principal
Because AVT has not demonstrated that it owns any interest in the patent in suit, the joint motion to dismiss is GRANTED and the above-captioned actions are DISMISSED.
Plaintiff AVT is not the inventor listed on the '788 patent, and it does not employ any inventor listed on the patent. It contends that it acquired title as a result of a series of assignments and corporate transactions.
The inventors listed on the patent in suit are three: Vivan Hsiun; Beng-Yu "Benny" Woo; and Xiaoming Li.
In January 1992, while Hsiun was employed at a now defunct company called Infochips Systems, Inc. ("Infochips"), she signed an "Infochips Systems Inc. Employee Proprietary Information Agreement," ("the employment agreement"). Section 2(b) of the employment agreement, entitled "Retaining and Assigning Inventions and Original Works," provided, under the subheading "Inventions and Original Works Assigned to the Company":
(Emphasis added).
Seventeen months earlier, on September 5, 1990, Infochips had entered into a "Security Agreement" with a company called Lease Management Services, Inc. ("LMS"). (See Docket # 102-3
Hsiun's employment contract meets the definition of a "general intangible" under the UCC. It was, therefore, among the assets pledged to LMS as security-provided that after-acquired and after-created assets (like the contract, which came into existence long after the Security Agreement) automatically became security for the LMS loans. The Security Agreement does not specifically provide one way or the other, though one could infer, particularly from the language in the agreement about the aging of Accounts Receivable, that the parties intended for after-acquired assets to fall into the pot of assets pledged as security to LMS. That is the way such agreements customarily work. It is not necessary to resolve that question to decide this motion.
In or about 1993, Infochips went out of business. LMS seized the assets pledged in the Security Agreement. (Docket # 102-3 at AVT0000126-27.) If indeed Hsuin's employment agreement was in the pot of assets securing Infochips' performance under the Security Agreement, LMS seized it along with the other assets.
The parties do not cite to any specific evidence that Hsiun made her contribution to the '788 patent during her brief period of employment with Infochips. However, as AVT relies on the employment agreement and it covers only inventions created during the course of Hsuin's employment with Infochips, I will make that assumption.
Woo Purchases the Pledged Assets from LMS
In March 1995, co-inventor Benny Woo purchased the pledged assets, including Hsiun's employment contract, from LMS. (Docket # 102-3 at AVT0000131.) A few months later, on June 29, 1995, Woo transferred his rights to the assets he had acquired from LMS to a company of which he was the principal, AVC Technology, Inc. ("AVC"—and not to be confused with plaintiff AVT). Therefore, to the extent that Hsuin's employment contract with Infochips was security under the LMS Security Agreement, AVC acquired that interest.
Woo's Company, AVC, Obtains the Patent In Suit
On May 8, 1995, Woo's company, AVC, filed U.S. Patent Application No. 08/437,-276
The '276 application named three coinventors—Woo, Hsiun, and Li—the same three coinventors listed on the face of the '788 patent.
Patent Office regulations require each inventor or co-inventor to execute an "oath" or "declaration" stating, among other things, that the individual is an inventor and that he or she authorizes the filing of the application. 37 C.F.R. § 1.63(a). In its initial submission to the Patent Office, AVC submitted unsigned inventor oaths for all three inventors.
AVC also submitted unsigned "assignments" from the three inventors of their rights in the claimed invention.
The omission of signatures on these critically important forms did not go unnoticed. In June 1995, the Patent Office notified AVC that both the inventor oaths and assignments had to be signed.
AVC promptly obtained signed inventor oaths from all three inventors and submitted them to the patent office. But AVC did not obtain executed assignments from all three inventors: On January 26, 1996, AVC recorded with the Patent Office assignments from Woo and Li, but not from Hsiun. AVC tried to obtain an assignment from Hsiun, but after putting off an AVC agent several times, Hsiun expressly refused to assign her rights in the claimed invention to AVC.
As a result, AVC filed a petition with the Patent Office in August 1995, asking for permission to prosecute the application without obtaining Hsiun's signature. AVC's position was that Hsiun was obligated by her employment agreement with Infochips—which Woo had purchased from LMS and assigned to AVC—to assign her interest in the invention to AVC or its successor in interest. Richard Cortez, the office manager for Infochips, submitted a declaration to the Patent Office documenting his unsuccessful efforts to convince Hsiun to assign her interest in the invention to AVC. (Docket # 102-3 at AVT0000138-140.) Woo also submitted a declaration to the Patent Office, as evidence that he had purchased Infochips' rights under Hsiun's employment agreement from LMS; he attached both "a copy of the agreement whereby the omitted inventor agreed to assign this invention and the documentation wherein the rights in said agreement were purchased by me." (Chen Decl., Ex. 3 at AVT0000107).
This seems to have satisfied the Patent Office, since AVC applied for and prosecuted the patent without obtaining a written assignment from Hsuin. On July 14, 1998, the patent in suit was issued to AVC as assignee.
AVC to Epogy to AVT
Some years later, on July 17, 2000, AVC agreed to be purchased by Epogy Communications, Inc. ("Epogy").
The Purchase Offer Agreement between AVC and Epogy provides, describes the proposed transaction—the purchased of 90% or more of AVC's stock to be followed by a statutory short-form merger under state law—as follows:
(AVT0024726, § 1). (Emphasis added) This agreement was recorded with the Patent Office.
AVT has presented evidence that Epogy successfully acquired 100% of the shares of AVC. However, no documents required to effectuate a statutory short form merger were ever filed, either in Delaware (where AVC was incorporated) or in California (where Epogy was incorporated). (Chen Decl., Exs. 6-9.) AVT now admits that the two corporations never merged.
AVC was, however, eventually dissolved. The shareholder vote authorizing its dissolution took place on September 30, 2002, and the Certificate of Dissolution was filed on November 1, 2002. (See Certificate of Dissolution, Docket # 102-6.).
Several months later, on January 15, 2003, Epogy transferred whatever rights (if any) it had in the '788 patent to a Mr. J. Nicholas Gross.
Mr. Gross assigned his rights (if any) in the patent to Plaintiff AVT on April 30, 2003.
AVT's title to the patent is, therefore, entirely contingent on Epogy's title; if Epogy never acquired title to AVC's interest (be that entire or 66.67%) in the '788 patent, then AVT lacks any interest in the patent.
AVT filed the present action in 2011. For subject matter jurisdiction purposes, its standing to sue must be ascertained as of that date. Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359, 1364 (Fed. Cir.2010) (citing Keene Corp. v. United States, 508 U.S. 200, 207, 113 S.Ct. 2035, 124 L.Ed.2d 118 (1993)).
Defendants filed the instant motion to dismiss for lack of subject matter jurisdiction in December 2014, after learning about this series of transactions during discovery.
In ruling on a motion to dismiss for lack of subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1), a district court need not confine itself to the allegations in the pleadings or accept them as true. A district court may instead refer to documents and evidence outside the pleadings in ruling on the motion. See, e.g., Makarova v. United States, 201 F.3d 110, 112 (2d Cir.2000). And even when there are disputed issues of fact; the district court is empowered to resolve them in the manner it sees fit. Gibbs v. Buck 307 U.S. 66, 71-72, 59 S.Ct. 725, 83 L.Ed. 1111 (1939); see also Alliance For Envtl. Renewal, Inc. v. Pyramid Crossgates Co., 436 F.3d 82, 87-88 (2d Cir.2006) (reviewing acceptable procedures used by district courts in determining jurisdictional questions).
Fortunately, there are no disputed issues of material fact raised by the record submitted to this court. Cf. Lawrence v. Dunbar, 919 F.2d 1525, 1529-30 (11th Cir. 1990). As such, I am able to proceed on the affidavits and other record materials before me. See Alliance For Envtl. Renewal, Inc., 436 F.3d at 88 (citing Exchange National Bank v. Touche Ross & Co., 544 F.2d 1126, 1131 (2d Cir.1976)).
Article III of the Constitution limits federal courts' subject matter jurisdiction to certain "Cases" and "Controversies." "The doctrine of standing is one of several doctrines that reflect this fundamental limitation. It requires federal courts to satisfy themselves that the plaintiff has alleged such a personal stake in the outcome of the controversy as to warrant his invocation of federal-court jurisdiction." Summers v. Earth Island Inst., 555 U.S. 488, 493, 129 S.Ct. 1142, 173 L.Ed.2d 1 (2009) (internal citations and quotations omitted) (emphasis in original).
The plaintiff has the burden of establishing Article III standing as to each type of relief he wishes to pursue. Los Angeles v. Lyons, 461 U.S. 95, 103, 105, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983). To meet that burden, he must show:
Susan B. Anthony List v. Driehaus, ___ U.S. ___, 134 S.Ct. 2334, 2341, 189 L.Ed.2d 246 (2014) (quoting Lujan, v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)) (internal citations and quotation marks omitted).
The Federal Circuit has explained that, in patent cases, "injury in fact" can only be suffered by one who holds exclusionary rights to the patent:
Morrow v. Microsoft Corp., 499 F.3d 1332, 1339 (Fed.Cir.2007) (internal quotations and citations omitted). Because he lacks the exclusionary right that infringement injures, a plaintiff who lacks "enforceable title to [a] patent at the inception of [his] lawsuit" will be unable to show "injury in fact," and is thus unable to meet his burden to show that he has Article III standing to pursue his claim. Abraxis Bioscience, Inc. v. Naninta, LLC, 625 F.3d 1359, 1363 (Fed.Cir.2010). And if the plaintiff lacks standing, federal courts lack subject matter jurisdiction to adjudicate his claim. Id.
"A party that has been granted all substantial rights under the patent, `regardless of how the parties characterize the transaction that conveyed those rights,' is considered to have legal title, and therefore standing." Sky Technologies LLC v. SAP AG, 576 F.3d 1374, 1379 (Fed.Cir. 2009) (quoting Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245, 1249-50 (Fed.Cir. 2000)). "Thus, it is the substance of what was granted, that determines the rights in the patent, not the form." Id. (internal citations and quotation marks omitted).
With few exceptions, state law governs whether a plaintiff has enforceable title to a patent. DDB Technologies, L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 1284, 1296 (Fed.Cir.2008) (Newman, J., describing the rule and dissenting as to the recognition of an exception) ("State statutory and common law have long been recognized as governing the ownership of patent property.") (citing Jim Arnold Corp. v. Hydrotech Sys., Inc., 109 F.3d 1567, 1572 (Fed.Cir.1997) ("[T]he question of who owns the patent right and on what
Nonetheless, patents are a creature of federal law, and the Federal Patent Act requires certain formalities in order to convey ownership rights in a patent to another. All assignments of interests in a patent, for example, must be in writing. 35 U.S.C. § 261; see also Sky Technologies, 576 F.3d at 1379; (citing Ager v. Murray, 105 U.S. 126, 131-32, 26 L.Ed. 942 (1881) (internal citations omitted)).
But, "there is nothing that limits assignment as the only means of transferring patent ownership . . . ownership of a patent [also] may be changed by operation of law." Id. (citing Akazawa v. Link New Technology International, Inc., 520 F.3d 1354, 1356 (Fed.Cir.2008)). Thus, state statutes of foreclosure and intestacy, as well as the adoption of the Uniform Commercial Code (in one state), have been held to effect transfers of title to patents. Id. (collecting cases).
The defendants have identified three purported defects in AVT's claim to have title to the '788 patent. Only one of them, however, implicates this court's subject matter jurisdiction.
If Hsiun never conveyed any interest in the invention to Infochips by virtue of her employment agreement, there would obviously be a defect in AVT's title to the extent it purports to derive from Hsuin's employment agreement. The parties disagree about whether Hsuin's employment contract—which obligated Hsuin to (1) assign her interest in any "invention" created during her employment to her employer and (2) cooperate in the prosecution of any patent to be procured on that invention by her employer—was an agreement to assign "patent rights" in the future, which would be void. See Bd. of Trustees of Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc., 583 F.3d 832, 841-42 (Fed.Cir.2009) aff'd, 563 U.S. 776, 131 S.Ct. 2188, 180 L.Ed.2d 1 (2011). Obviously, if the employment agreement did not in fact transfer to Infochips any rights in the invention that was eventually the subject of the '788 patent, then LMS, and later Woo, and eventually AVC never acquired Hsuin's one third interest in the invention. That would make her an absent co-owner of the patent.
Similarly, if Infochips, having acquired Hsiun's rights to the invention, failed to assign those rights to LMS under the Security Agreement, then there would be a gap in AVT's title as well. LMS could only have taken title to Infochips' rights under the employment agreement if after-acquired assets or after-created rights automatically became "security" on the date they were created or acquired. As noted above, that appears to be an open question, given the wording of the Security Agreement. Again, this argument implicates only Hsuin's partial interest in the patent—not the ownership interests of Woo and Li, which they conveyed to AVC, and which AVC believes it conveyed to Epogy. But if Hsuin's contract was never assigned to LMS, then Hsuin remained at all times a co-owner of the patent.
Prudential concerns sometimes require the dismissal of infringement suits in the absence of patent co-owners, because a defendant should not be sued repeatedly for the same acts of infringement and on the same patent. See Aspex Eyewear, Inc. v. Altair Eyewear, Inc., 288 Fed.Appx. 697, 704-05 (Fed.Cir.2008). So too, a coowner's patent rights can be said to include the right to impede another co-owner's pursuit of infringement actions. STC. UNM v. Intel Corp., 767 F.3d 1351, 1353 (Fed.Cir.2014) (citing Schering Corp. v.
However, the rationale underlying this rule is purely one of "prudential" standing—that is, one of statutory interpretation concerning who has a cause of action under the statute and under what circumstances. Id. And as the Supreme Court recently clarified, prudential or statutory standing is not really "standing" at all. Lexmark Int'l, Inc. v. Static Control Components, Inc., ___ U.S. ___, 134 S.Ct. 1377, 1388 n. 4, 188 L.Ed.2d 392 (2014) (analyzing the Lanham Act). As a result, no motion to dismiss for lack of subject matter jurisdiction pursuant to Fed. R.Civ.P. 12(b)(1) lies where the alleged "lack of standing" is merely prudential:
Id.
The third and most glaring alleged defect in AVT's title, however, raises an issue of actual, not prudential, standing—which is to say, it raises the question whether AVT has any interest in the patent whatsoever. That issue does implicate this court's subject matter jurisdiction because, if plaintiff AVT has no rights at all in the '788 patent, it could have suffered no injury-in-fact from defendants' alleged infringement. Absent injury-in-fact, AVT has no right to sue for infringement. Abraxis Bioscience, Inc., 625 F.3d at 1363.
The potential defect is Epogy's purported failure to acquire any of AVC's rights in the '788 patent from AVC after it acquired 100% of AVC's stock. If Epogy failed to acquire title to AVC's assets before assigning the patent to Gross in January 2003, then Gross had nothing to assign to AVT in April 2003, and AVT does not own any interest at all in the '788 patent.
Since the AVC-Epogy transfer is the only transfer whose validity implicates this Court's subject matter jurisdiction, it is appropriate to consider it first, and to reach the prudential issue only if needed. See District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983); see also Coan v. Kaufman, 457 F.3d 250, 256 (2d Cir.2006). Here, there is no need to reach the prudential issue, because the actual standing issue is dispositive.
AVT's theory of how Epogy came to acquire AVC's rights in the patent in suit has shifted over time.
Instead, AVT now argues that no shortform merger was needed, because Epogy acquired AVC's assets (including its interest in the '788 patent) because Epogy purchased all of AVC's stock before AVC dissolved. (See Docket # 163 at 1-2.) AVT cites no authority for this assertion, and understandably so, because Epogy did not acquire any of AVC's assets simply by purchasing 100% of its stock. That is a well-settled proposition of corporate law in both Delaware (where AVC as incorporated) and California (where Epogy was incorporated).
In a 1963 opinion, Orzeck v. Englehart, 41 Del.Ch. 361, 365, 195 A.2d 375, 377 (1963), the Delaware Supreme Court was confronted with the question of whether the purchase by one corporation of all the stock in another corporation effected a transfer of the assets of the purchased corporation to its new parent. The answer was no:
Id. (citing Owl Fumigating Corp. v. California Cyanide Co., 3 Cir., 24 F.2d 718; Fidanque v. American Maracaibo Co., 33 Del.Ch. 262, 92 A.2d 311) (emphasis added); see also Buechner v. Farbenfabriken Bayer, 154 A.2d 684, 686-87 (De1.1959) (a parent company "has no interest of any specific assets of the [wholly-owned subsidiary]" because "[t]he corporation is an entity, distinct from its stockholders even if the subsidiary's stock is wholly owned by one person or corporation."). This is part and parcel of the:
Texaco Ref & Mktg., Inc. v. Delaware River Basin Comm'n, 824 F.Supp. 500, 506-07 (D.De1.1993) aff'd, 30 F.3d 1488 (3d Cir.1994)
The 2015 edition of "Folk on the Delaware General Corporation Law," the leading
Of course, Epogy, which was the acquiring corporation here, is a California corporation, not a Delaware corporation. However, the law is no different in California: when a corporation acquires all of the stock of another corporation, it does not thereby become the owner of the assets of its now wholly-owned subsidiary. In 1941, the California Supreme Court declared that it was "fundamental, of course, that the corporation has a personality distinct from that of its shareholders, and that the latter neither own the corporate property nor the corporate earnings." Miller v. McColgan, 17 Cal.2d 432, 110 P.2d 419, 421 (1941); see also 15 Cal. Jur.3d Corporations § 335 ("The shareholders are not the owners of corporate property.").
So under the relevant state law, Epogy did not automatically become vested with ownership in the '788 patent upon acquiring 100% of the stock of AVC. Notwithstanding the parties' express statement that they did not intend that AVC remain a wholly-owned subsidiary of Epogy (see supra, page 414), Epogy's acquiring 100% of the stock of a Delaware corporation did nothing except create a parent-subsidiary relationship; it did not transfer ownership of the acquired corporation's assets to the new parent corporation (Epogy). To do that, something more was needed.
That something could have been an assignment, which is the recognized method of transferring patent rights between a parent and its subsidiary: "Common corporate structure does not overcome the requirement that even between a parent and a subsidiary, an appropriate written assignment is necessary to transfer legal title from one to the other." Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359, 1366 (Fed.Cir.2010). But there was no such assignment.
So AVT insists that Epogy acquired ownership of the '788 patent from its wholly-owned subsidiary incident to AVC's dissolution. Citing Del.Code Ann. tit. 8, § 281(b), AVT states that, "it is black letter law that any assets remaining when a corporation is dissolved are to be distributed to stockholders." (Docket # 163, AVT
(Emphasis added). Since Epogy purchased all the outstanding shares of AVC, AVT argues, Epogy was entitled to distribution of all AVC's "remaining assets"—including AVC's interest in the patent-insuit—upon AVC's dissolution.
The problem with this argument is it misconstrues the way Delaware corporate law works.
When a Delaware corporation files a certificate of dissolution, it does not simply evaporate. Rather, it "dissolves" only for the purpose of continuing to do business. By operation of law, Del. Ann.Code § 278, the corporation remains continues in existence for a period of at least three years from the date of dissolution—more, if the period is extended by the Court of Chancery—for the limited purpose of allowing it to wind up its affairs. To that end, it can ,sue and be sued, dispose of or convey its property and discharge its liabilities. Only after all of that is done is a Delaware corporation permitted "to distribute to their stockholders any remaining assets"—that is, any assets that remain after satisfaction of all liabilities—pursuant to § 281(b). Under § 281, stockholders are last in line; they are entitled to receive, not all the assets of a dissolved corporation, but only "remaining assets"—the assets that are left over after all other corporate creditors have been satisfied, or provision made for them to be satisfied.
AVT's brief in opposition to the motion to dismiss highlights the last sentence of § 281(b) but conspicuously fails to acknowledge the rest of the statute, or its interplay with § 278. That interplay is critical, because § 281(b) requires that a dissolving corporation or some successor entity adopt a "plan of distribution" of the dissolving corporation's assets at some time during "the period described in § 278"—i.e., the three year statutory wind-down period. As the Delaware Supreme Court recently explained, the term "remaining assets," to which shareholders are entitled pursuant to § 281(b), can be understood only in relation to such a plan of distribution:
In re Krafft-Murphy Co., Inc., 82 A.3d 696, 708 (De1.2013) (emphasis added). Put otherwise, ownership of the assets of a dissolved corporation do not devolve onto shareholders by operation of law immediately upon the filing of a certificate of dissolution; they have to be distributed according to a plan.
So AVC's assets did not automatically revert to Epogy, its 100% owner, when it filed its certificate of dissolution on November 1, 2002. AVT cites no authority for the proposition that title to AVC's assets devolved onto its 100% shareholder by operation of law immediately upon the filing of a certificate of dissolution except § 281(b), and § 281(b) does not so provide.
And therein lies the rub.
AVT offers no evidence that either AVC or Epogy ever adopted the statutorily required plan of distribution. The only fair inference from the evidence it does offer (about which more below) is that no such plan was adopted. It is, therefore, impossible to conclude that Epogy acquired title to AVC's assets, at the very least during the three year statutory "wind-down" period provided for in § 278, and perhaps for an even longer period. § 281(b) requires a dissolving corporation to adopt a plan of distribution, and gives it a period of time—the three year statutory wind-down period—to do so. It thus stands to reason that the dissolving corporation retains title to its assets until such a plan is adopted, so that it can use those assets to satisfy any obligations that exist on the date of dissolution.
Of course, AVC may not have had any obligations or pending claims to settle on the day it filed its Certificate of Dissolution; if so, a plan of dissolution, duly adopted by AVC's Board, could undoubtedly have provided for a prompt distribution of some or all of AVC's assets, including its interest in the '788 patent. But even on that assumption (and there is absolutely no evidence in the record on the point), AVC and its parent Epogy still had to comply with the statutory formality: AVC had to adopt a plan of distribution, and AVC had to "distribute" the assets to Epogy for its parent to obtain ownership of its subsidiary's assets. Defendants have scoured the filings in the office of the Delaware Secretary of State and have come up with AVC's Certificate of Incorporation, its Amended and Restated Certificate of Incorporation, and its Certificate of Dissolution—but no plan of distribution, or any evidence that one was ever adopted. None was produced during discovery. And none was produced by AVT in its opposition to the motion to dismiss.
In the absence of a plan, there could have been no distribution on or about November 1, 2002, the date of AVC's dissolution. And in the absence of a distribution, AVC's assets, including the '788 patent, were not acquired by AVC's parent corporation,
This is critically important, because Epogy purported to assign its interest in the '788 patent to Gordon on January 15, 2013. In the absence of a distribution pursuant to a plan, as mandated by § 281(b), Epogy had no ownership interest in the patent on that date. AVT suggests no reason why AVC's rights in the '788 patent would, could or should have devolved by operation of law onto its shareholder/parent a mere two and one half months after the filing of the certificate of dissolution, except via a plan of distribution that does not appear to exist. The logic of the § 278 period of continued corporate existence, as well as the fact that § 281(b) mandates the creation of a plan of distribution, suggests otherwise. Indeed, were that not the case, shareholders of a Delaware corporation could simply assume ownership of assets needed for other purposes. But they are not statutorily entitled to such assets.
In short, under no reading of § 281(b) could Epogy have acquired title to the patent pursuant to that statute before January 15, 2003, the date when it purported to assign its rights to Gross. Which means, perforce, that Epogy conveyed to Gross nothing at all—and Gross conveyed nothing at all to Plaintiff.
With no assignment and no statutory mechanism to support a transfer of AVC's patent rights to Epogy by the magic January 15, 2003 date, AVT is left to argue that AVC must have transferred its interest to Epogy simply because it intended to do so—and because it represented to Gross that it had done so. Thus, AVT has submitted
(Id. at ¶ 3-4 (emphasis added).) AVT also offers the deposition testimony of Homer Chang, who was "at all pertinent times the CEO and Co-Chair of Epogy." (Docket # 106 at 25), and who testified that Epogy
(Docket # 106 at 26-27) (quoting Chang Dep. at 17:3-7, 18:18-19:18, 20:6-12, 20:24-21:18, 30:12-17).
Finally, AVT points to the fact that Epogy executed two documents on behalf of AVC after it acquired AVC's stock. One is a September 2000 "Statement by a Foreign Corporation" that Epogy executed "on behalf of AVC. The other is a January 2002 Delaware tax filing that Homer Chang of Epogy signed as AVC's "Chairman and CEO."
Clearly, Epogy's officers (including Woo, who had been the principal of AVC) believed that they had transferred patent rights from one entity to the other. But believing does not make it so. Similarly, warranting to Gross that Epogy had valid title to the patent does not make it so. I could warrant that I had title to the Brooklyn Bridge, but that would not make me the bridge's owner; it would only give the person to whom I sold it an action for breach of warranty. So to here: Gross could sue Epogy for breach of warranty (were the claim not time barred), but Epogy plainly erred when it told Gross that Epogy had valid title to AVC's assets, because those assets had been neither assigned nor distributed to it. A misstatement about what one owns does not convey any interest in the disputed property.
Similarly, the recordation of the AVC-Epogy Purchase Offer Agreement with the USPTO, about which Couture testifies, did not transfer AVC's ownership interest in the '788 patent; it merely announced AVC's and Epogy's intention that those rights would be transferred. The public filings in which Epogy's chairman signed on behalf of AVC did not effect a transfer; I have little doubt that Epogy's chairman was also the chairman of its wholly-owned subsidiary (that is generally the way it works), but that proves nothing about the ownership of AVC's assets. And while Mr. Courture's declaration, as well as the express terms of the Purchase Offer Agreement, express what the parties intended—namely, that Epogy would succeed to AVC's rights in the '788 patent—intentions that do not crystallize into acts recognized by law as sufficient to transfer title do not convey title.
In short, between 2000 and January 15, 2003, Epogy and its lawyers somehow managed to do everything except actually convey title to the patent from subsidiary (AVC) to parent (Epogy). Therefore, under Delaware law, AVC (not Epogy) owned the patent on the day Epogy (not AVC) purported to convey the patent to Gross, AVT's predecessor-in-title.
I find instructive the recent opinion in Labyrinth Optical Technologies, LLC v. Alcatel-Lucent USA, Inc., 12-00759 (C.D.Cal. Mar. 23, 2015) (on file with the Court). In that case, the plaintiffs claim to own the relevant patent rested on a written assignment that purported to assign all the patents "listed in the Exhibit attached hereto." Unfortunately, no such exhibit was appended to the assignment. The Labyrinth court found it "likely that the parties intended to include a list of transferred patents in the Exhibit, but they did not." Id. at 8. Under the relevant state law, the absence of any document showing precisely what was to be conveyed defeated the plaintiffs claim to title and thus required dismissal for lack of subject matter jurisdiction. Indeed, the Labyrinth court dismissed even though the plaintiff represented that it could simply have another, corrected assignment executed and refile the very same action.
Here, in order for AVT to acquire rights in the '788 patent, it would have to take an
Finally, there is no merit to AVT's suggestion that the Court refer any factual disputes over its ownership of some interest in the patent to a jury—both because a district court is permitted to resolve factual disputes when ascertaining its own jurisdiction (see supra, at page 415), and because the record raises no genuine issues of material fact to resolve.
"As there is no statutory direction for procedure upon an issue of jurisdiction, the mode of its determination is left to the trial court." Gibbs, 307 U.S. at 71-72, 59 S.Ct. 725. Where a genuine issue of material fact exists relating to subject matter jurisdiction, it is within the court's discretion to hold a hearing limited to the question of Article III standing. Alliance For Envtl. Renewal, Inc. v. Pyramid Crossgates Co., 436 F.3d at 87-88. But AVT has not produced any evidence sufficient to create a genuine issue of material fact as to the dispositive question here: whether AVC transferred its interest in the '788 Patent to Epogy, its sole shareholder, before January 15, 2003, when Epogy purported to transfer that interest to Gross, who in turn purported to transfer it to Plaintiff. Had AVT provided a copy of its plan of distribution for AVC, or even testimony that such a plan was adopted and made provision for the immediate transfer of the patent rights, that might have raised a genuine issue of fact. Had AVT provided a written assignment, or even testimony that one was made but cannot now be located, that could have raised a question of fact. Going back to its original position, had AVT provided any evidence that the two corporations were merged, that would have raised a genuine issue of fact.
But AVT has done none of these things. It has merely provided a declaration from an attorney who recalls what was intended but evidently never done, and from the President of Epogy, who apparently believed that a merger took place when none ever did. This "evidence" falls far short of creating a genuine dispute as to any fact that would be material to resolving whether Epogy took title to the patent pursuant to a "distribution of [AVC's] remaining assets" under Del.0 ode Ann. tit. 8, § 281(b) before it purported to assign its interest in the patent on January 15, 2003.
Because AVT raises no genuine issue of material fact, there is no need to conduct any hearing at all—let alone impanel a jury to deliver what would be a wholly advisory verdict. Rather, I proceed in a manner the Second Circuit has recognized as appropriate: after discovery concerning the jurisdictional issue (which was conducted in the course of more fulsome discovery proceedings already underway in these matters), and on a motion supported by affidavits and exhibits—including an affidavit that AVT submitted specifically to aid the Court in its resolution of the issue of subject matter jurisdiction. Alliance For Envtl. Renewal, Inc., 436 F.3d at 87-88 (citing Exchange National Bank., 544 F.2d at 1131).
For the foregoing reasons, Defendants' joint motion is GRANTED and actions 11 Civ. 06604, 11 Civ. 08908, and 12 Civ. 00918 are DISMISSED. The Clerk of the