PARADISE CREATIONS, INC., Plaintiff-Appellant, v. UV SALES, INC., Defendant-Appellee.
No. 02-1283.
United States Court of Appeals, Federal Circuit.
DECIDED: Jan. 3, 2003.
315 F.3d 1304
Respondent‘s motion to dismiss is GRANTED and the petition for review is DISMISSED AS MOOT.
III.
Petitioners’ goal appears to be to force EPA to bump-up Atlanta to severe nonattainment status, with all that a reclassification would entail. If EPA cannot extend Atlanta‘s attainment deadline under the Extension Policy, then it most likely will need to reclassify Atlanta. If, however, we were to review the MVEB Adequacy Determination, declare the Extension Policy invalid, and vacate the Adequacy Determination, we would be issuing an advisory opinion. EPA‘s SIP Approval has rendered the Adequacy Determinatiоn a legal nullity, thereby mooting this case and depriving us of jurisdiction. Vacating EPA‘s Adequacy Determination would change nothing, so we will dismiss the petition as moot.
Kyle B. Fleming, Baker & Hostetler LLP, of Cleveland, OH, argued for defendant-appellee. With him on the brief was Thomas H. Shunk.
Before LOURIE, BRYSON, and DYK, Circuit Judges.
DYK, Circuit Judge.
This case presents the question of whether a suit for patent infringement must be dismissed for laсk of Article III standing because the plaintiff corporation claimed its patent rights under a contract executed at a time when it was administratively dissolved. Paradise Creations, Inc. (“the appellant“) appeals the final judgment of the United States District Court for the Southern District of Florida. The district court granted summary judgment in favor of the defendant, U V Sales, Inc. (“the appellee“), and dismissed the aрpellant‘s claim for patent infringement for
BACKGROUND
The appellant was incorporated under the laws of Florida on March 13, 1985. On August 23, 1996, the appellant was administratively dissolved for failing to file its annual report, pursuant to Florida Corporation Statutes, сhapter 607.1622(8), which provides: “[a]ny corporation failing to file an annual report . . . shall be subject to dissolution or cancellation of its certificate of authority to do business as provided in this act.”
During the period of its dissolution, the appellant entered into an аgreement with Leon Hayduchok, whereby it alleges it obtained exclusive rights to the patent in suit, U.S. Patent No. 4,681,471 (“the ‘471 patent“). Under the agreement, Hayduchok, who was one of the named inventors listed in the patent, granted to the appellant “the exclusive, unlimited, irrevocable, world-wide right and license” to the ‘471 patent, effective October 14, 1997. (J.A. at 113). The appellant also relies on two letters, dated April 7, 1999, and May 13, 1999, in which Hayduchok and the other named inventor listed in the patent, Leopold Strauss, are alleged to have resolved litigation between each other regarding ownership of the ‘471 patent, and consented to continued enforcement and licensing of the patent by the appellant. Like the 1997 licensing agreement, these letters were written during the period of the appеllant‘s administrative dissolution.
The appellant initiated this action by filing a complaint for patent infringement against the appellee in the United States District Court for the Southern District of Florida on September 29, 2000, during the period that the appellant was administratively dissolved.
On June 22, 2001, the appellee filed a motion for summary judgment, alleging that because the appellant had been administratively dissolved since August 1996, it did not have capacity to sue under Florida law or standing to invoke the district court‘s jurisdiction under Article III of the United States Constitution. The appellee argued that the appellant lacked capacity under Florida Corporation Statutes chapter 607.1622(8), which provides, “[a]ny corporation failing to file an annual report . . . shall not be permitted to maintain or defend any аction in any court of this state.” The appellee further argued that because Florida law prohibits dissolved corporations from conducting business except that necessary to wind up and liquidate their business and affairs, the agreements the appellant entered into while administratively dissolved did not transfer enforceable patent rights to the appellant during the period of dissolution. Therеfore, the appellee argued, the appellant did not have sufficient interest in the patent at suit to establish standing.
As noted above, on June 29, 2001, the appellant obtained reinstatement as a corporation from the Florida Department of State.
On July 2, 2001, the appellant filed a motion for leave to file an amended complaint, pursuant to
On August 16, 2001, the appellant filed an opposition brief to the appellee‘s motion for summary judgment. The aрpellant argued that although it was administratively dissolved at the time it obtained exclusive rights to the patent and at the time it filed suit, under Florida Corporation Statutes chapter 607.1422(3), when an administratively dissolved corporation is reinstated, the reinstatement “relates back to and takes effect as of the effective date of the administrative dissolution and the corporation resumes carrying оn its business as if the administrative dissolution had never occurred.” (J.A. at 227, quoting
On November 13, 2001, the district court granted the appellee‘s motion for summary judgment. The court held that standing in federal court is a matter of federal law, and “depends upon the state of things at the time of the action brought.” Paradise Creations, No. 00-8898, slip op. at 5 (quoting Keene Corp. v. United States, 508 U.S. 200, 207 (1993)). Therefore, the court reasoned, the Florida Corporation Statutes could not retroactively create jurisdiction where it was lacking at the time the action was filed. Id. at 7. The court noted that the “Plaintiff does not dispute” that the agreements it relied upon as its basis for rights in the patent “were not valid during the time that Plaintiff was dissolved.” Id. at 6. Therеfore, the court held, the appellant did not have enforceable rights to the ‘471 patent on the day it filed its complaint and could not establish federal standing. Id. at 7.
The appellant timely filed this appeal. This court has jurisdiction pursuant to
DISCUSSION
I
We review the district court‘s grant of summary judgment without deference. Schumer v. Lab. Computer Sys., Inc., 308 F.3d 1304, 1310 (Fed. Cir. 2002). This court reviews questions of law, including standing and capacity to sue under
II
It appears that under Flоrida law, the appellant had capacity to sue at the time of the complaint, at least insofar as the suit for patent infringement was “necessary to wind up and liquidate its business and affairs.”
III
However, regardless of whether the appellant had capacity to sue, it must establish that it had standing under Article III of the Constitution at the time it filed suit. Whether a party has standing to sue in federal court is a question of federal law. Baker v. Carr, 369 U.S. 186, 204 (1962). Article III standing, like other bases of jurisdiction, generally must be present аt the inception of the lawsuit. Lujan v. Defenders of Wildlife, 504 U.S. 555, 570 n.5 (1992) (plurality opinion) (“[S]tanding is to be determined as of the commencement of suit.“); see also Keene Corp. v. United States, 508 U.S. 200, 207 (1993) (“[T]he jurisdiction of the Court depends on the state of things at the time of the action brought.“); Arizonans for Official English v. Arizona, 520 U.S. 43, 64, 67 (1997) (holding that standing is an aspect of the case or controversy requirement, which must be satisfied “at all stages of review“).
To demonstrate standing under Article III, the plaintiff must satisfy three elements. First, the plaintiff must allege that it has suffered an “‘injury in fact’ — an invasion of a legally protected interest.” Lujan, 504 U.S. at 560. Second, “there must be a causal connection between the injury and the conduct complained of.” Id. And third, “it must be ‘likely,’ as opposed to merely ‘speculative,’ that the injury will be ‘redressed by a favorable decision.‘” Id. at 561 (quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 38, 43 (1976)). The Patent Act provides that only “[a] patentee shall have remedy by civil action for infringement of his patent.”
The appellee argues that the appellant did not have enforceable patent rights during the period of its administrative dissolution, and therefore, did nоt hold such rights to the patent at the time it filed suit. Florida Corporation Statutes chapter 607.1421(3) provides: “[a] corporation administratively dissolved continues its corporate existence but may not carry on any business except that necessary to wind up and liquidate its business and affairs.” The appellee contends, without citation to any authority, that a contract entered into in violation оf chapter 607.1421 cannot grant enforceable rights under Florida law, during the period of corporate dissolution. The appellant does not challenge this construction of the statute, thus admitting that it did not hold enforceable patent rights when the suit was filed. Instead, the appellant relies wholly on the theory that when it gained reinstatement, under Florida Corporation Statutes chap-
IV
Florida Corporation Statutes chapter 607.1422(3) provides: “[w]hen the reinstatement is effective, it relates back to and takes effect as оf the effective date of the administrative dissolution and the corporation resumes carrying on its business as if the administrative dissolution had never occurred.” The appellant contends that, pursuant to this statute, its licensing agreement was retroactively validated upon reinstatement, and that it constructively held enforceable patent rights on the day it filed its complaint. The appelleе counters that whatever the effect of the corporate revival statute in Florida State courts, it cannot retroactively confer standing in federal court. We agree with the appellee.
As noted above, whether a party has standing to assert the jurisdiction of a federal court is a question of federal law, and “standing is to be determined as of the commencement of suit.” Lujan, 504 U.S. at 570 n.5. Acсordingly, this court has determined that in order to assert standing for patent infringement, the plaintiff must demonstrate that it held enforceable title to the patent at the inception of the lawsuit. Lans, 252 F.3d at 1328 (holding that the appellant did not have standing, because he had already assigned title to the patent at the inception of the lawsuit); Enzo APA & Son, Inc. v. Geapag A.G., 134 F.3d 1090, 1092 (Fed. Cir. 1998) (holding that a licensee lacked standing where there was no written transfer of rights under the patent at the time the infringement claims were brought); Jim Arnold Corp. v. Hydrotech Sys., Inc., 109 F.3d 1567, 1572 (Fed. Cir. 1997) (holding that an assignor lacked standing, because it had not succeeded in rescinding or canceling its assignment in state court at the time it filed its complaint in federal court); Gaia Techs., Inc. v. Reconversion Techs., Inc., 93 F.3d 774, 778 (Fed. Cir. 1996) (holding that the plaintiff‘s patent and trademark infringement claims were required to be dismissed for lack of standing, because of its “inability to prove that it was the owner of the Intellectual Property at the time the suit was filed“), as amended on rehearing on different grounds, 104 F.3d 1296; cf. Matos v. Sec‘y of Dep‘t of Health & Human Servs., 35 F.3d 1549, 1553 (Fed. Cir. 1994) (holding that a jurisdictional defect created by the plaintiff‘s filing of a parallel action in state court cannot be cured by a nunc pro tunc order in the state court purporting to retroactively dismiss the state action).
In Enzo, the plaintiff claimed title to the patent under an exclusive license. 134 F.3d at 1092. As proof of title, the plaintiff produced a written agreement that wаs executed after the inception of the lawsuit, but which, by its terms, was retroactive, purportedly taking effect prior to the filing of the complaint. Id. This court determined that “[i]t is clear from the record that there was no writing transferring all substantial rights under the ‘274 patent to Geapag at the time it brought suit.” Id. at 1093. We determined that “[a]s a general matter, parties should possess rights before seeking to have them vindicated in court,” 134 F.3d at 1093-94 (quoting Procter & Gamble Co. v. Paragon Trade Brands, Inc., 917 F. Supp. 305, 310 (D. Del. 1995)), and therefore held that the retroactive licensing agreement was “not suffi-
This case is distinguished from Mentor H/S, Inc. v. Med. Device Alliance, Inc., 240 F.3d 1016, 1019 (Fed. Cir. 2001). In that case, we held that an exclusive licensee with less than аll substantial rights in the patent did not have the right to sue under the Patent Act at the inception of the lawsuit, but could cure the defect by filing a motion to join the patentee as a plaintiff. Id. In that case, the plaintiff had a cognizable injury at the inception of suit for the purpose of Article III standing, based on its exclusive license to the patent. Id. at 1018. Unlike in Mentor, however, the appellant in this case held no enfоrceable rights whatsoever in the patent at the time it filed suit, and therefore lacked a cognizable injury necessary to assert standing under Article III of the Constitution. See Lujan, 504 U.S. at 560.
Such a defect in standing cannot be cured after the inception of the lawsuit.2
In summary, at the time the appellant filed its suit, it agrees that it did not have enforceable rights to the patent and did not have standing to assert federal jurisdiсtion. It cannot rely on the Florida corporate revival statute to retroactively claim enforceable patent rights on the day it filed its complaint, in order to assert standing. We express no opinion as to whether in a newly filed action, the corporate reinstatement of the plaintiff, which lifted Florida‘s bar on enforcement of any contract rights acquired during the period of its dissоlution, would allow the plaintiff to sue for damages for infringement occurring during the dissolution period.3
Accordingly, we hold that this case was properly dismissed for want of standing, though the plaintiff may refile the action.
CONCLUSION
For the foregoing reasons, the judgment of the district court is
AFFIRMED.
No costs.
LOURIE, Circuit Judge, dissenting.
I respectfully dissent from the majority‘s decision holding that Paradise lacked Article III standing to bring its lawsuit during the period of its administrative dissolution.
The requiremеnts of Article III standing, as set forth in the majority opinion, ante at 1308 (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (plurality opinion)), were fully satisfied under the facts of this case. Provided that Paradise had legal capacity under the law of Florida, see infra, it had been granted an exclusive license under the patent1 and hence suffered an injury in fact from infringement; there is a causal connection between injury suffered by a patentee (оr one who stands in the patentee‘s shoes) and allegedly infringing acts; and it is likely that such injury is redressable by winning a patent infringement suit. Thus, Article III standing was established.
The only issue here is whether the administrative dissolution deprived Paradise of its entitlement to bring the lawsuit. That is a matter of state, viz., Florida law, as the existence and capacity of a corporation are governed by state law.
Paradise was temрorarily impaired as a corporation under Florida law. In fact, if Paradise had not been reinstated under chapter 607.1422 of the Florida Statutes, then the only acts it would have been entitled to take would relate to winding up and liquidating its business.
As for the so-called “admission” during oral argument by Paradise, I understand that admission to be only that, during the period of dissolution, before reinstatement, Paradise lacked capacity to do business, which is no more than saying what chapter 607.1421 provides, until chapter 607.1422 has come into effect.
I also do not believe that Enzo governs this case. I see а meaningful difference between a party that had not entered into the contract before suit (the plaintiff in Enzo) and one who had (Paradise), but whose corporate capacity to transact business was temporarily defective. The other cases are similarly distinguishable.
Thus, I would reverse the decision of the district court holding that Paradise lacked Article III standing to bring this suit.
In re MAJESTIC DISTILLING COMPANY, INC.
Nos. 02-1243, 74,622,781.
United States Court of Appeals, Federal Circuit.
Jan. 2, 2003.