Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_15-cv-04417/USCOURTS-cand-4_15-cv-04417-6/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ZEROCLICK, LLC,

Plaintiff,

v.

APPLE INC.,

Defendant.

Case No. 15-cv-4417-JST 

ORDER TO SHOW CAUSE AND 

VACATING HEARINGS

Re: ECF No. 107

Before the Court is Defendant Apple Inc.’s motion to dismiss this action for lack of 

standing. For the reasons set forth below, the Court will order Plaintiff Zeroclick, LLC, to show 

cause why this action should not be dismissed for lack of standing and lack of subject matter 

jurisdiction.

I. BACKGROUND AND PROCEDURAL HISTORY

Plaintiff Zeroclick, LLC (“Zeroclick I”), alleges that Apple’s products infringe certain 

claims of two of its patents (“patents-in-suit”): (1) claims 2 and 52 of United States Patent Number 

7,818,691 (“’691 patent”); and (2) claim 19 of United States Patent Number 8,549,443 (“’443 

patent”). The patents-in-suit are both entitled “Zeroclick.” ECF No. 1-1 at 2; ECF No. 1-2 at 2. 

The patents essentially share a specification and claim priority to a United Kingdom patent 

application filed on May 11, 2000. 

On August 16, 2016, the Court issued a claim construction order, in which it concluded 

that claims 2 and 52 of the ’691 patent, and claim 19 of the ’443 patent, were invalid for 

indefiniteness. ECF No. 60. 

On June 1, 2018, the Federal Circuit reversed this Court’s claim construction order. 

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Zeroclick, LLC v. Apple Inc., 891 F.3d 1003 (Fed. Cir. 2018). The court of appeals held that this 

Court erred in concluding that two disputed terms were means-plus-function terms under 35 

U.S.C. § 112, ¶ 6. Id. at 1006-07. It reasoned that, because neither of the terms in question uses 

the word “means,” Apple was required to rebut the presumption that 35 U.S.C. § 112, ¶ 6 does not 

apply to either term, but Apple had failed to do so. Id. at 1007-08. Accordingly, the Federal 

Circuit vacated the judgment and remanded the action to this Court for further proceedings. Id. at 

1009.

Following remand, the Court conducted a case management conference and invited the 

parties to propose constructions for disputed limitations in light of the Federal Circuit’s opinion. 

The parties requested that the Court construe the limitations based on the parties’ existing briefs 

and without entertaining further argument. 

On June 25, 2019, the Court entered a second claim construction order. ECF No. 77. 

Discovery closed on November 1, 2019. ECF No. 82. 

Apple then filed a motion for judgment on the pleadings, ECF No. 88, and a motion for 

summary judgment, ECF No. 96. The motion for judgment on the pleadings is under submission, 

and the motion for summary judgment, and related motions to exclude expert testimony, are 

scheduled for oral argument on May 6, 2020. 

On March 2, 2020, Apple moved to dismiss this action for lack of standing. ECF No. 107. 

That motion is also scheduled for oral argument on May 6, 2020.

II. UNDISPUTED FACTS1

On May 14, 2015, the patentee, Dr. Ness Stewart Irvine, transferred “all rights” to the 

patents-in-suit to InterAD Technologies, LLC. ECF No. 107-3 at 4-7. On May 19, 2015, InterAD 

assigned the patents-in-suit to Zeroclick I. ECF No. 107-4 at 2. On May 20, 2015, InterAD

changed its name to Zeroclick, LLC. Id. at 4. 

1 No party disputes the authenticity or accuracy of the documents discussed herein, or their 

contents, which were filed by Apple and Zeroclick in connection with the present motion. 

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Documents generated from the website of the Office of the Comptroller of Texas state that 

Zeroclick I was formed in Texas as a limited liability company, that it was registered on May 3, 

2007, and that its Texas taxpayer number is 32031452835. ECF No. 107-8 at 3. 

On September 25, 2015, Zeroclick I filed this action against Apple, alleging that it was the 

“owner and assignee” of the patents-in-suit. ECF No. 1 ¶ 7. 

On December 1, 2017, Zeroclick I was terminated as a limited liability company by Erich 

Spangenberg, who is listed on the Certificate of Termination as the only “governing person” of 

Zeroclick I. ECF No. 107-10 at 2. The Certificate of Termination further provides that the 

termination was the result of a “voluntary decision to wind up the entity” that was made in 

accordance with Texas law and “the governing documents of the entity.” Id. at 3. The termination 

became effective on December 1, 2017. Id.

Zeroclick I has not filed any documents in response to the present motion to dismiss

showing what happened to Zeroclick I or its assets, including the patents-in-suit, after it was 

terminated on December 1, 2017.

On July 30, 2019, pursuant to a “Transfer of Ownership Agreement,” non-party Granicus 

IP, LLC, transferred ownership of Zeroclick I to Dr. Irvine. ECF No. 111-1 at 2. The agreement

states that Granicus IP, LLC, was the “sole member” of Zeroclick I at the time of the transfer. Id.

The agreement does not indicate what assets, if any, were held by Zeroclick I at the time of the 

transfer. 

On November 6, 2019, Dr. Irvine formed a new Zeroclick entity (“Zeroclick II”), which, 

like Zeroclick I, is also named Zeroclick, LLC. ECF No. 108-8 (operating agreement). Dr. Irvine 

is the sole member of Zeroclick II. Id. at 2. Documents generated from the website of the Office 

of the Comptroller of Texas state that Zeroclick II was formed in Texas, that it was registered on 

November 6, 2019, and that its Texas taxpayer number is 32072461745. ECF No. 107-8 at 4. The 

taxpayer number of Zeroclick II is different from the taxpayer number of Zeroclick I. See id. at 2-

4. 

On January 14, 2020, Dr. Irvine entered into an “Assignment Agreement” with Zeroclick II

in which Dr. Irvine assigned to Zeroclick II “all rights” to the patents-in-suit. ECF No. 108-10 at 

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2. This Assignment Agreement, which has not been recorded with the United States Patent 

Office, is silent as to how Dr. Irvine came to own any of the rights to the patents-in-suit that he 

purportedly assigned to Zeroclick II under the terms of that contract. 

On February 12, 2020, Dr. Irvine was deposed in connection with this action. ECF No. 

108-6. He testified that he created a “brand new” entity that is also called Zeroclick, that he “got 

[his] patents back,” and that he “put them into this new company and I’m continuing the original 

lawsuit that was started by them.” Id. at 4-5 (Dr. Irvine deposition testimony). When asked 

whether he had “signed any assignments from a previous company called Zeroclick to a brand 

new company called Zeroclick,” Dr. Irvine responded that he had. Id.

On February 26, 2020, Zeroclick I served supplemental responses to Apple’s first set of 

interrogatories, which state, in relevant part: 

On July 30, 2019, the sole member of Zeroclick, LLC transferred 

ownership in that entity to Dr. Nes Irvine, making him the sole 

member. Subsequently, Dr. Irvine dissolved the existing 

Zeroclick, LLC entity and reincorporated the entity (still Zeroclick, 

LLC) with a new operating agreement. Dr. Irvine further executed 

a confirmatory assignment of the patents-in-suit to the new entity.

ECF No. 107-9 at 3.

III. LEGAL STANDARD

“Standing to sue is a threshold requirement in every federal action. Standing must be 

present at the time the suit is brought. The party bringing the action bears the burden of 

establishing that it has standing.” Sicom Sys., Ltd. v. Agilent Techs., Inc., 427 F.3d 971, 975-76 

(Fed. Cir. 2005) (internal citations omitted). A party bringing an infringement action “must meet 

both constitutional and prudential standing requirements.” Morrow v. Microsoft Corp., 499 F.3d 

1332, 1338 (Fed. Cir. 2007). 

“To demonstrate the minimal constitutional standing requirements have been satisfied, ‘[a] 

plaintiff must allege personal injury fairly traceable to the defendant’s allegedly unlawful conduct 

and likely to be redressed by the requested relief.’” Id. at 1338-39 (citations omitted, alterations in 

original). “These requirements have been described as the injury in fact, traceability, and 

redressability inquiries.” Id. at 1339. “Constitutional injury in fact occurs when a party performs 

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at least one prohibited action with respect to the patented invention that violates the[] exclusionary 

rights” bestowed by a patent grant, which include “the legal right to exclude others from making, 

using, selling, or offering to sell the patented invention in the United States, or importing the 

invention.” Id. (citations omitted). “The party holding the exclusionary rights to the patent suffers 

legal injury in fact.” Id. An entity that “lacks injury in fact” because it does not hold title to the 

exclusionary rights to the patent “lacks standing to be a party” under Article III in an action for 

patent infringement. Id. at 1341. 

Prudential standing exists where the requirements set forth in the Patent Act for bringing a 

civil action are satisfied. “The Patent Act provides that ‘[a] patentee shall have remedy by civil 

action for infringement of his patent.’” Sicom Sys., 427 F.3d at 976 (quoting 35 U.S.C. § 281). 

“The term ‘patentee’ comprises ‘not only the patentee to whom the patent was issued but also the 

successors in title to the patentee.’” Id. (quoting 35 U.S.C. § 100(d)). “However, if the patentee 

transfers all substantial rights under the patent, it amounts to an assignment and the assignee may 

be deemed the effective patentee under 35 U.S.C. § 281 for purposes of holding constitutional 

standing to sue another for patent infringement in its own name.” Id. (citations omitted).

IV. DISCUSSION

Apple moves to dismiss this action with prejudice on the ground that Zeroclick I lacks

standing to sue for infringement of the patents-in-suit. Apple argues that Zeroclick I has been 

dissolved and lost ownership of the patents-in-suit, which caused it to lose standing in this action. 

Apple further argues that Zeroclick II cannot be substituted as a plaintiff because the record shows 

a break in the chain of title with respect to the patents-in-suit, and as a result of that break, 

Zeroclick I has not shown that Zeroclick II owns the patents-in-suit and has standing to sue for 

infringement thereof. In the alternative to dismissal of this action with prejudice, Apple requests 

that the Court strike all proceedings during which Zeroclick I lacked standing. 

Zeroclick I opposes the motion, arguing that there is no standing defect because it is not 

the case that “there are two Zeroclicks,” as Zeroclick, LLC, was merely “re-formed” by Dr. Irvine 

with a new operating agreement ECF No. 111 at 4-5. In apparent contradiction to that argument,

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Zeroclick also contends that any standing defect can be cured by “order[ing] an amendment to 

conform to proof” that Zeroclick II is the “successor in interest” to Zeroclick I. Id.

The Court concludes, based on the record before it, that Zeroclick I lacks standing and that 

Zeroclick II cannot be substituted as a plaintiff because Zeroclick I has not shown that Zeroclick II 

has standing to sue for infringement of the patents-in-suit.

It is undisputed that Zeroclick I was dissolved by Dr. Irvine at some point after July 30, 

2019, and that it no longer holds any legal right to the patents-in-suit. Accordingly, Zeroclick I 

has lost constitutional standing to prosecute this patent-infringement action, rendering this action 

moot. See Schreiber Foods, Inc. v. Beatrice Cheese, Inc., 402 F.3d 1198, 1202-03 (Fed. Cir. 

2005) (holding that the plaintiff in patent-infringement action lost standing by assigning all rights 

to the asserted patents to a non-party entity and that “the case became moot” as a result of the 

plaintiff’s loss of standing); King Pharmaceuticals, Inc. v. Eon Labs, Inc., 616 F.3d 1267, 1282-83 

(Fed. Cir. 2010) (holding that a party’s assignment of “all its interests” in the patents-in suit, 

including “any rights it may have” to sue the opposing party for damages, rendered the action 

devoid of any “actual case or controversy” as between those parties).

Zeroclick I argues that its dissolution and loss of rights to the patents-in-suit did not create 

a standing defect because Zeroclick I was “re-formed” by Dr. Irvine under a new operating 

agreement and, as a result of that “re-formation,” it is not the case that “there are two Zeroclicks.” 

ECF No. 111 at 4-5. Zeroclick I, however, points to no evidence or authority to support its theory

that Zeroclick I and Zeroclick II are the same entity. Further, Dr. Irvine’s own deposition 

testimony, and other documents submitted by Apple, contradict the notion that Zeroclick I and 

Zeroclick II are the same entity. See ECF No. 108-6 at 4-5 (Dr. Irvine’s deposition testimony

stating that he created a “brand new company” also called Zeroclick, LLC); ECF No. 108-8 

(operating agreement of Zeroclick II, stating that Zeroclick II was “formed” on November 6, 

2019); ECF No. 107-8 at 2-4 (documents generated from the website of the Texas Office of the 

Comptroller showing that Zeroclick I and Zeroclick II have different taxpayer numbers, dates of 

registration, registered addresses, and registered agents). Accordingly, the Court cannot find that 

no standing defect exists on the basis that Zeroclick I and Zeroclick II are the same entity. 

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Zeroclick I next argues that, even if a standing defect was created by its dissolution and 

loss of rights with respect to the patents-in-suit, that defect can be cured by substituting Zeroclick

II as plaintiff. ECF No. 111 at 6. But, because Zeroclick I has not established that Zeroclick II 

has any rights to the patents-in-suit, the Court cannot conclude that the standing defect that has 

mooted this action can be cured by substituting Zeroclick II as plaintiff. 

Substitution of the plaintiff can cure a standing defect in a patent-infringement action only 

where the Court can conclude that the new plaintiff has standing to sue for infringement. See, e.g., 

Insituform Techs., Inc. v. Cat Contracting, Inc., 385 F.3d 1360, 1371-72 (Fed. Cir. 2004)

(allowing joinder of new owner of patent rights where assignment of patent rights to the new 

owner was not disputed); Morrow, 499 F.3d at 1343 (holding that, “[t]o demonstrate entitlement to 

join” a patent infringement suit as plaintiff, an entity “must have the right to exclude others from 

making, using, or selling the invention in the United States”). To have standing to sue for patent 

infringement, the new plaintiff must have “sufficient exclusionary rights” in the patent-in-suit such 

that it suffers an injury in fact from infringing activities. See Morrow, 499 F.3d at 1341. To 

determine whether an entity has sufficient exclusionary rights to have standing to sue for 

infringement, the Court must “trace the chain of title to the patent.” Enzo APA & Son, Inc. v. 

Geapag A.G., 134 F.3d 1090, 1092 (Fed. Cir. 1998). 

Here, there is a gap in the chain of title with respect to the patents-in-suit that prevents the 

Court from concluding that Zeroclick II has sufficient exclusionary rights to be a plaintiff in this 

patent-infringement action. This gap starts when Zeroclick I was terminated in 2017, and ends in 

January 2020, when Dr. Irvine assigned the rights he purportedly had to the patents-in-suit to 

Zeroclick II. Zeroclick I has submitted no evidence to show what happened to the ownership of 

the rights to the patents-in-suit during that timeframe. Zeroclick also has not cited any authority 

showing that a standing defect like the one here can be cured by substituting a new plaintiff when 

the record shows a break in the chain of title. In the absence of evidence establishing that 

sufficient exclusionary rights to the patents-in-suit were assigned to Dr. Irvine before he assigned 

any such rights to Zeroclick II in January 2020, Zeroclick II would appear to have no standing. 

See Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359, 1367-68 (Fed. Cir. 2010) (vacating 

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district court’s denial of motion to dismiss for lack of standing on the ground that a break in the 

chain of title to patents defeated standing).

Zeroclick I does not dispute that it was terminated in December 2017 pursuant to the 

Certificate of Termination filed with the Texas Secretary of State. See ECF No. 107-10 at 2. 

Zeroclick I has submitted no evidence to show what happened to Zeroclick I’s assets, including 

the patents-in-suit, as a result of that termination. The only document that Zeroclick I submitted in 

response to Apple’s present motion to dismiss shows that the ownership of Zeroclick I was 

transferred to Dr. Irvine in July 2019 pursuant to a “Transfer of Ownership Agreement” with nonparty Granicus IP, LLC. ECF No. 111-1 at 2. The agreement, however, does not indicate what 

assets, if any, were held by Zeroclick I at the time of this transfer. Id. The agreement also is silent 

as to the patents-in-suit. 

Zeroclick I argues in a footnote, without pointing to any evidence or authority, that all

rights to the patents-in-suit remained with Zeroclick I between its 2017 termination until 

ownership of Zeroclick I was transferred to Dr. Irvine in 2019. See ECF No. 111 at 5 n.1. But the 

Court cannot simply assume, based on Zeroclick I’s arguments alone, that ownership of all rights 

to the patents-in-suit remained with Zeroclick I notwithstanding its termination in 2017, because 

Texas law, which applies to entities formed in that state, requires that the assets of a limited 

liability company be distributed to creditors and owners before it is terminated. See, e.g., Tex. 

Bus. Orgs. Code § 11.053 (providing that an entity “in the process of winding up shall apply and 

distribute its property to discharge, or make adequate provision for the discharge of, all of the 

domestic entity’s liabilities and obligations,” and, after that is done, the “entity shall distribute the 

remainder of its property, in cash or in kind, to the domestic entity’s owners according to their 

respective rights and interests”); Tex. Bus. Orgs. Code § 11.101 (“On completion of the winding 

up process . . . a filing entity must file a certificate of termination in accordance with Chapter 4.”). 

There is nothing in the record to support the notion that Zeroclick I retained any of its assets, 

including ownership of the patents-in-suit, notwithstanding its winding-up and termination in 

2017. As noted above, Dr. Irvine was not an owner of Zeroclick I until July 2019, so the Court 

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cannot assume that he received any rights to the patents-in-suit as a result of the winding-up and 

termination of Zeroclick I in 2017. 

Further, Zeroclick I has not explained how ownership of Zeroclick I could have been 

transferred to Dr. Irvine in July 2019 even though Zeroclick I was terminated in 2017. 

Further still, the transfer of ownership of Zeroclick I to Dr. Irvine in July 2019 does not 

establish, or even suggest, that ownership of any rights to the patents-in-suit, which is the 

ownership that matters to the analysis here,

2 was transferred to Dr. Irvine at that time. Even if the 

Court assumes that Zeroclick I retained ownership of the patents-in-suit despite the 2017 

termination, such that Zeroclick I still owned all rights to the patents at the time Dr. Irvine became 

the owner of Zeroclick I in July 2019, that still would not show that Dr. Irvine became the owner 

of any rights to the patents-in-suit when he became the owner of Zeroclick I. Ownership of the 

patents-in-suit would have remained with Zeroclick I in the absence of an assignment of the 

patents-in-suit from Zeroclick I to Dr. Irvine. There is no evidence of any such assignment.

Notably, Dr. Irvine was asked at his deposition whether he had “signed any assignments 

from a previous company called Zeroclick to a brand new company called Zeroclick,” and he 

responded that he had. See ECF No. 108-6 at 4-5. Zeroclick I has not filed the purported 

assignments of the patents-in-suit from Zeroclick I to Zeroclick II. 

In the absence of a showing that Zeroclick II has sufficient exclusionary rights with respect 

to the patents-in-suit, Zeroclick II lacks injury in fact and therefore lacks constitutional standing to 

be a plaintiff in this patent-infringement action. Accordingly, the Court concludes, based on the 

2 Dr. Irvine’s acquisition of Zeroclick I in July 2019 does not establish that Dr. Irvine also 

acquired ownership of any patent rights that Zeroclick I might have held at that time. The Federal 

Circuit has recognized that there is a difference between having a beneficial interest in an entity 

that possesses rights to a patent, and having ownership of rights to the patent itself. The latter is 

relevant and material to the standing inquiry; the former is not. See, e.g., Morrow, 499 F.3d at 

1343 (holding that an entity’s “beneficial ownership interest” in another company that held rights 

to the patent-in-suit “does not affect the outcome of [the] standing analysis” because “whatever 

interests in the ’647 patent may flow to [the first entity] in the future are insufficient to convert its 

equitable future interests in the patent into full legal exclusionary interests” that would permit the 

first entity to sue in the present suit). 

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current record, that the standing defect created by Zeroclick I’s dissolution and loss of rights to the 

patents-in-suit cannot be cured by substituting Zeroclick II as plaintiff.

V. CONCLUSION

For the foregoing reasons, the Court orders Zeroclick I to show cause why this action 

should not be dismissed for lack of standing. Within 21 days of the date this order is filed, 

Zeroclick I shall file a brief and supporting evidence establishing the chain of title to the patentsin-suit, from Zeroclick I’s termination in 2017 until January 2020, when Dr. Irvine transferred to 

Zeroclick II the rights he purportedly had to the patents-in-suit. Apple may file a response to 

Zeroclick I’s brief within seven days of the date Zeroclick I’s brief is filed. At that time, the Court 

will take Apple’s motion to dismiss for lack of standing under submission without a hearing. 

The hearings on Apple’s motion to dismiss for lack of standing, Apple’s motion for 

summary judgment, and motions to exclude expert testimony related to Apple’s motion for 

summary judgment, which are currently scheduled for May 6, 2020, are vacated. The Court may 

reschedule these hearings to a later date if the Court, in its discretion, finds that a hearing is 

necessary.

IT IS SO ORDERED.

Dated: April 23, 2020

______________________________________

JON S. TIGAR

United States District Judge

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