Opinion ID: 209871
Heading Depth: 2
Heading Rank: 3

Heading: Mars's Standing (1996-2003)

Text: The district court held that the 1996 Agreements transferred ownership of the '719 patent [1] to MEI and therefore deprived Mars of standing to recover damages on sales from 1996 to 2003. Mars, 2006 WL 2927240, at . However, applying the logic of this court's decision in Schreiber Foods, the district court held that Mars could cure its lack of standing by the `imminent' transfer back to Mars of the rights to the ... '719 patent[] before final judgment. Id. Though the record is not clear on this point, it appears that the district court treated the Confirmation Agreement as satisfying Schreiber Foods by transferring all of the rights in the '719 patent back to Mars prior to final judgment, thus restoring Mars's standing to recover damages from 1996 to 2003. The district court thus applied its royalty rate to a base that included Coinco sales both prior to 1996, and from 1996 to 2003. On appeal, Coinco argues that Mars failed to recover standing because: (1) the Confirmation Agreement transferred only the right to suenot title tothe '719 patent; and (2) the transfer was after final judgment. Our review of this question of standing is de novo. See Rite-Hite, 56 F.3d at 1551. Preliminarily, we note that both parties have confused the record by taking positions here that are seemingly contradictory to positions taken before the district court as to the interpretation and effect of the Confirmation Agreement. When addressing MEI's standing at the district court, Coinco argued that the Confirmation Agreement transferred back to Mars all of MEI's rights, presumably including title. See J.A. 3242 (The 2006 Coinco Confirmation Agreement ... purports to transfer MEI's entire rights to damages for infringement in the '719 Patent, including damages for past infringement, to Mars, Incorporated.); J.A. 3913 (From the four corners of that particular document, it is clear to Coinco and we believe should be clear to the court that whatever rights that MEI had with respect to the '719 patent, at least according to that document, have been transferred to Mars, Inc.). Now, Coinco argues that the Confirmation Agreement did not transfer title back to Mars. See Cross Appellant's Br. 30 (Mars did not have standing to assert the '719 Patent after January 1, 1996, because  unlike Schreiber Foods Mars never regained title to the patent.). Mars is equally guilty of changing positions. At the district court and in some sections of its opening brief here, Mars argued that the Confirmation Agreement transferred ownership (presumably meaning title) from MEI to Mars. See Appellant's Br. 15 (Mars sold MEI as of June 19, 2006 and regained full ownership of the '137 and '719 patents, including the right to sue for past infringement.) But at oral argument, Mars claimed that the Confirmation Agreement did not and could not transfer title, because Mars never gave up title in the first place. Oral Arg. at 13:52-14:12, available at http://www.cafc.uscourts.gov/oralarguments/mp3/XXXX-XXXX.mp3 (The Confirmation Agreement does not transfer title....). Because this is a question of standing and our review is de novo, see Rite-Hite, 56 F.3d at 1551, we will independently evaluate the effect of the 1996 Agreements and the Confirmation Agreement on the ownership of the '719 patent, notwithstanding the apparently contradictory representations of both parties. [T]he plaintiff in an [infringement] action ... must be the person or persons in whom the legal title to the patent resided at the time of the infringement. Crown Die & Tool Co. v. Nye Tool & Mach. Works, 261 U.S. 24, 40, 43 S.Ct. 254, 67 L.Ed. 516 (1923) (quoting 3 Robinson on Patents § 937); Rite-Hite, 56 F.3d at 1551 (Generally, one seeking money damages for patent infringement must have held legal title to the patent at the time of the infringement.) Likewise, the procedure described in Schreiber requires a patentee to reacquire title to a patent to correct the jurisdictional defect that arises when the plaintiff loses title to the patent during the litigation. See Schreiber, 402 F.3d at 1204 (Here Schreiber reacquired its stake in the litigation by reacquiring the '860 patent (and causes of action thereunder) before the entry of judgment. The jurisdictional defect that had existed was cured before the entry of judgment and thus the judgment was not void. (emphasis added)). We must therefore determine whether the 1996 Agreements transferred title of the '719 patent from Mars to MEI, and, if so, whether the Confirmation Agreement transferred title back from MEI to Mars. Construction of patent assignment agreements is a matter of state contract law. Minco, 95 F.3d at 1117. By their terms, the 1996 Agreements are governed by Delaware law. In Delaware: Under standard rules of contract interpretation, a court must determine the intent of the parties from the language of the contract. A determination of that kind will sometimes require the court to decide whether or not the disputed contract language is ambiguous. Contract language is ambiguous if it is reasonably susceptible of two or more interpretations or may have two or more different meanings. Where no ambiguity exists, the contract will be interpreted according to the ordinary and usual meaning of its terms. Twin City Fire Ins. Co. v. Del. Racing Ass'n, 840 A.2d 624, 628 (Del.2003) (footnotes and internal quotation marks omitted). The relevant language of the 1996 Agreements is: [Mars] Incorporated hereby transfers to MEI-US its entire interest in the Covered Intellectual Property that relates to the business of the Parties. J.A. 4942. We see nothing ambiguous about this language. A transfer of the entire interest of a patentee in a patent is well known to mean a full assignment of the patenti.e., transfer of title. See, e.g., Littlefield v. Perry, 21 Wall. 205, 88 U.S. 205, 219, 22 L.Ed. 577 (1874) ([The] power of assignment has been so construed by the courts as to confine it to the transfer of an entire patent, an undivided part thereof, or the entire interest of the patentee or undivided part thereof within and throughout a certain specified portion of the United States. One holding such an assignment is an assignee within the meaning of the statute, and may prosecute in the Circuit Court any action that may be necessary for the protection of his rights under the patent. (emphasis added)). Thus, giving the ordinary and usual meaning to the terms of this clause of the 1996 Agreements, we find that intent of the parties was to transfer title to the '719 patent from Mars to MEI. Like the district court, we therefore conclude that Mars lacked standing as of 1996. Mars, 2006 WL 2927240, at . We next turn to the Confirmation Agreement to determine whether it transferred title to the '719 patent back to Mars. [2] The Confirmation Agreement is governed by New York law. In New York, [t]he words and phrases used by the parties must, as in all cases involving contract interpretation, be given their plain meaning.... Brooke Group Ltd. v. JCH Syndicate 488, 87 N.Y.2d 530, 640 N.Y.S.2d 479, 663 N.E.2d 635, 638 (1996). Moreover, it is common practice for the courts [of New York] to refer to the dictionary to determine the plain and ordinary meaning of words to a contract. Mazzola v. County of Suffolk, 143 A.D.2d 734, 533 N.Y.S.2d 297, 297 (N.Y.App.Div.1988). Mars cites paragraph A of the recitals as the portion of the agreement effecting a transfer of rights, but paragraph A contains nothing but a general description of the subject matter of the purchase agreement. Paragraph 1 appears to be the paragraph that most closely resembles a transfer of title. It states: Mars and the Buyer [MEI] do hereby acknowledge that Mars owns and retains the right to sue for past infringement of the Litigation Patents. To the extent that MEI may have or claim any rights in or to any past infringement of the Litigation Patents or any recovery therefor, upon the terms and subject to the conditions of the Purchase Agreement, MEI hereby does irrevocably assign all such rights to Mars. J.A. 3177-78 (emphases added). The first sentence of paragraph 1 describes an acknowledgement  i.e., a recognition  of rights that the contracting parties believed had already been transferred. See, e.g., 1 Oxford English Dictionary 108 (2d ed.1989) (defining acknowledge as 1. To own the knowledge of; to confess; to recognize or admit as true.... 3. To own as genuine, or of legal force or validity; to own, avow, or assent, in legal form, to (an act, document, etc.) so as to give it validity); Webster's Third New International Dictionary of the English Language, Unabridged 17 (2002) (defining acknowledge as 1: to show by word or act that one has knowledge of and agrees to (a fact or truth) ... 2 a: to show by word or act that one has knowledge of and respect for the rights, claims, authority or status of ...: recognize, honor, or respect esp. publicly). It did not purport to be a transfer itself. [3] The second sentence of paragraph 1 does describe an actual transferMEI hereby does irrevocably assign all such rights to Mars. J.A. 3178. But the antecedent of such rights is any rights in or to any past infringement of the Litigation Patents or any recovery therefor. J.A. 3177-78. This is an assignment of the right to sue for past infringement, not an assignment of title. See Morrow, 499 F.3d at 1342 (holding that transfer of right to sue for past infringement does not convey title or standing in infringement action). The 1996 Agreements make clear that MEI and Mars knew how to transfer title when they intended to do so. We see no provision in the Confirmation Agreement that transfers title to the '719 patent back to Mars. Finally, we reject Mars's argument that because the right to sue for past infringement is the only remaining right[ ] in an expired patent, a transfer of the right to sue is effectively the same as a transfer of title. Appellant's Reply Br. 15. Title to a patenteven an expired patentincludes more than merely the right to recover damages for past infringement. Moreover, the transfer of the right to sue for past infringement divorced from title creates a risk of unnecessary third-party litigation, whether or not the patent has expired. See Crown Die, 261 U.S. at 39, 43 S.Ct. 254 (expressing disfavor toward separate transfer of right to sue, because it would stir up litigation by third persons that is certainly contrary to the purpose and spirit of the statutory provisions for the assigning of patents). We conclude that the Confirmation Agreement did not transfer title and that Mars lacks standing for the period from 1996 to 2003. [4] We therefore need not decide whether the Confirmation Agreement took effect before or after final judgment for purposes of Schreiber.