Haddad v. United States
127 Fed. Cl. 565
| Fed. Cl. | 2016Background
- Michael Haddad filed U.S. Patent No. 7,639,844 (the '844 patent); Astornet Technologies, Inc. (Astornet) later was identified as sole exclusive licensee in a separate Maryland district-court complaint.
- Haddad sued the United States in the Court of Federal Claims (two consolidated complaints filed Oct. 6, 2015) alleging TSA infringement of the '844 patent.
- The government moved to dismiss for lack of jurisdiction, arguing Haddad lacked Article III standing because he had transferred all substantial rights in the '844 patent to Astornet.
- Haddad contends he retained ownership rights (assignment records allegedly show no assignment), Astornet dissolved in Feb. 2016, and Astornet later purportedly terminated its right to litigate—facts Haddad says preserve his standing.
- The government replied that any post-filing events (Astornet’s dissolution or termination letter) cannot cure Haddad’s lack of standing at the time the complaints were filed; Haddad has not shown that substantial rights reverted to him before Oct. 6, 2015.
- The Court denied the government’s motion to dismiss but ordered Haddad to show cause within 45 days why the complaints should not be dismissed unless he produces documentary proof that substantial patent rights reverted to him before filing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue for patent infringement | Haddad says he remained patent owner and could enter/exit licensing; no valid prior assignment divested him of substantial rights | Government asserts Haddad transferred all substantial rights to Astornet (exclusive licensee), so Haddad lacked standing when he filed | Court found prima facie defect: record indicates Astornet held exclusive litigation rights; Haddad must show documentary proof rights reverted before filing or case may be dismissed |
| Effect of post-filing events on jurisdiction | Haddad argues Astornet’s 2016 dissolution and later termination of litigation rights cure standing | Government argues jurisdiction is determined at complaint filing; post-filing events cannot cure a jurisdictional defect | Court held post-filing events do not cure lack of standing at filing; Haddad must show reversion occurred before Oct. 6, 2015 |
| Need for documentary proof of assignment/reversion | Haddad points to absence of an assignment record and his signed permission to Astornet to litigate | Government notes Haddad has not produced the alleged contract transferring rights or any pre-filing documentation of reversion | Court required Haddad to produce a legal document showing reversion of substantial rights prior to filing or show cause why case should not be dismissed |
| Whether licensor must be joined if rights retained | Haddad implies he retained control and thus could sue alone | Government relies on Federal Circuit precedent that when an exclusive licensee holds all substantial rights, the licensor cannot sue alone | Court applied precedent: where exclusive license transfers all substantial rights, licensor lacks standing absent proof of reversion or retained substantial rights |
Key Cases Cited
- Waterman v. MacKenzie, 139 U.S. 252 (establishes party-in-interest rule for patent suits)
- Alfred E. Mann Found. for Sci. Research v. Cochlear Corp., 604 F.3d 1354 (Fed. Cir. 2010) (analysis of when exclusive license transfers all substantial patent rights)
- Enzo APA & Sons, Inc. v. Geapag AG, 134 F.3d 1090 (Fed. Cir. 1998) (virtual assignment doctrine for exclusive licenses)
- Paradise Creations, Inc. v. UV Sales, Inc., 315 F.3d 1304 (Fed. Cir. 2003) (plaintiff must hold enforceable title at suit inception)
- Schreiber Foods, Inc. v. Beatrice Cheese, Inc., 402 F.3d 1198 (Fed. Cir. 2005) (jurisdictional defects cannot be cured by subsequent acquisition of interest)
- Arrowhead Indus. Water, Inc. v. Ecolochem, Inc., 846 F.2d 731 (Fed. Cir. 1988) (jurisdiction determined by facts at time complaint filed)
- Gonzalez v. Thaler, 132 S. Ct. 641 (courts must address jurisdictional defects sua sponte)
- Erickson v. Pardus, 551 U.S. 89 (courts generally accept complaint facts as true when resolving motions to dismiss)
- Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (courts should decide jurisdiction before merits)