Court Opinion

ID: 5116309
Source: CourtListenerOpinion
Date Created: 2021-10-06 15:00:59.231496+00
Date Added: 2024-06-11T08:21:56.062005
License: Public Domain

Case: 21-1702   Document: 22     Page: 1    Filed: 10/06/2021

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

     PETER SGROMO, AKA PIETRO PASQUALE-
              ANTONIO SGROMO,
               Plaintiff-Appellant

                            v.

                TARGET BRANDS INC.,
                   Defendant-Appellee
                 ______________________

                       2021-1702
                 ______________________

     Appeal from the United States District Court for the
 District of Minnesota in No. 0:20-cv-01030-JRT-LIB, Judge
 John R. Tunheim.
                  ______________________

                 Decided: October 6, 2021
                 ______________________

    PETER SGROMO, Thunder Bay, Ontario, Canada, pro se.

      JOHN S. ARTZ, Dickinson Wright PLLC, Ann Arbor, MI,
 for defendant-appellee. Also represented by STEVEN A.
 CALOIARO, Reno, NV; JAMES J. LUKAS, JR., Greenberg Trau-
 rig, P.A, Chicago, IL.
                   ______________________

   Before LOURIE, O’MALLEY, and CHEN, Circuit Judges.
Case: 21-1702     Document: 22     Page: 2    Filed: 10/06/2021

 2                              SGROMO   v. TARGET BRANDS INC.

 PER CURIAM.
     Pietro Pasquale Antonio Sgromo appeals from a deci-
 sion of the United States District Court for the District of
 Minnesota granting Target Brands, Inc.’s (“Target”) mo-
 tion to dismiss for lack of jurisdiction and denying Sgromo’s
 motion for a preliminary injunction. See Sgromo v. Target
 Brands, Inc., No. CV 20-1030, 2021 WL 632496 (D. Minn.
 Feb. 18, 2021). We affirm.
                        BACKGROUND
     Sgromo alleges that he owns U.S. Patents 7,046,440
 (“the ’440 patent”), 8,654,422 (“the ’422 patent”), and
 9,511,298 (“the ’298 patent”), and the H2O-GO! trade-
 marks. These patents and trademarks relate to pool deco-
 rations and structures, but their subject matter is not
 relevant here. The present action is not Sgromo’s first at-
 tempt at asserting infringement of these patents and
 trademarks, and other courts have found that Sgromo does
 not own any of these patents or trademarks. For context
 regarding the present action, we briefly summarize the
 prior court decisions.
      In April 2019, the District Court for the Northern Dis-
 trict of California, in a suit brought in that court, found
 that Leonard Scott, not Sgromo, was the rightful owner of
 the ’440 patent and enjoined Sgromo from filing any claim
 in federal or state court pertaining to royalty payments
 arising from use of this patent. See Bestway (USA), Inc. et
 al. v. Sgromo et al., No. 17-CV-205, Dkt. No. 148 (N.D. Cal.
 Apr. 18, 2019); S.A. 53–54. 1 In September 2019, the Dis-
 trict Court for the Eastern District of Texas dismissed
 Sgromo’s complaint in that court for infringement of the
 ’440 patent for lack of standing because Sgromo had not
 shown a written transfer of all substantial rights of the ’440

     1  “S.A.” refers to the Supplemental Appendix filed
 with Target’s brief.
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 SGROMO   v. TARGET BRANDS INC.                            3

 patent to himself and because other district court proceed-
 ings had already concluded that he was not the owner of
 the ’440 patent. See Sgromo v. Bestway Enter. Co. Ltd., No.
 19-CV-60, 2019 WL 4686719, at *3 (E.D. Tex. Aug. 29,
 2019), R. & R. adopted, 2019 WL 4673756, at *1 (E.D. Tex.
 Sept. 25, 2019).
     In 2019, the Northern District of California and East-
 ern District of Texas courts found that Sgromo failed to
 demonstrate ownership of the ’298 patent. See Sgromo,
 2019 WL 4686719, at *4–5; J.A. 7.
     In September 2019, the Eastern District of Texas court
 dismissed Sgromo’s complaint for infringement of the ’422
 patent for lack of standing because Imperial Toy, LLC (“Im-
 perial Toy”) was assigned the rights to the ’422 patent. See
 Sgromo v. Imperial Toy LLC, 2019 WL 4394565, at *2 (E.D.
 Tex. Sept. 13, 2019). In November 2019, Imperial Toy filed
 for bankruptcy, and despite Sgromo asserting that he was
 the rightful owner of the ’422 patent, the bankruptcy court
 overruled Sgromo’s objection and approved the sale of the
 ’422 patent free and clear of any claim by Sgromo. J.A. 21–
 22; S.A. 76, 101.
    Finally, the Eastern District of Texas court found that
 Sgromo did not show that he was the owner of the H2O-
 GO! trademarks. See Sgromo, 2019 WL 4686719, at *5–6.
     Thus, other tribunals had determined that Sgromo
 lacked ownership of the patents and trademark sufficient
 to bring suit on them.
     In the present case Sgromo sued Target in the United
 States District Court for the District of Minnesota for in-
 fringement of the ’440, ’422, and ’298 patents, and the H2O-
 GO! trademarks. J.A. 3–4. Sgromo alleged that Wide Eyes
 Marketing, Ltd. (“WEM”), a company owned and operated
 by Sgromo, acquired ownership of the ’440 patent on De-
 cember 10, 2010. J.A. 4. In May 2013, WEM granted a
 non-exclusive license to Bestway (Hong Kong)
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 4                             SGROMO   v. TARGET BRANDS INC.

 International Ltd. and Bestway (USA), Inc. (collectively,
 “Bestway”). Id. Bestway then terminated the license in
 March 2017. Id. As a result, Sgromo claimed that the ’440
 patent exclusively reverted to WEM. Id. In April 2020,
 Sgromo filed a purported assignment from WEM to himself
 in the U.S. Patent and Trademark Office (“USPTO”). S.A.
 244–48.
     Regarding the ’422 patent, Sgromo alleged that he li-
 censed this patent to Imperial Toy but that the license ter-
 minated due to non-payment of royalties and all rights in
 the ’422 patent reverted to him. J.A. 4–5. In March 2020,
 Sgromo filed a “corrective assignment” which he claimed
 showed that the rights in the ’422 patent reverted to him.
 J.A. 30. As for the ’298 patent, Sgromo claimed that he
 licensed the patent to Bestway in 2013, Bestway termi-
 nated the license in 2017, and all rights reverted to him.
 Id. And, regarding the H2O-GO! trademarks, Sgromo al-
 leged that he granted a non-exclusive license to the trade-
 marks to Bestway, but Bestway terminated the agreement
 in March 2017, and the rights exclusively reverted to him.
 Id. In April 2020, Sgromo filed documents that he alleged
 are assignments of the H2O-GO! trademarks. S.A. 305–10.
     Shortly after bringing suit, Sgromo filed a motion for a
 preliminary injunction. S.A. 344. Target then moved to
 dismiss the case for lack of subject matter jurisdiction.
     A magistrate judge issued a report and recommenda-
 tion that recommended granting Target’s motion to dismiss
 and also recommended denying Sgromo’s motion for a pre-
 liminary injunction. J.A. 8. The magistrate judge found
 that WEM, not Sgromo, owned the ’440 patent. J.A. 26–29.
 WEM then assigned the patent to Scott. Id. This meant
 that, Scott, not Sgromo, held all the rights to the ’440 pa-
 tent and these rights never reverted to WEM or were later
 assigned to Sgromo, as Sgromo claimed. Id.
     With regard to the ’422 patent, the magistrate judge
 found that although Sgromo was listed as an inventor,
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 SGROMO   v. TARGET BRANDS INC.                             5

 Imperial Toy was the assignee of the patent and held all
 ownership rights to the patent. J.A. 29–31. With regard
 to the ’298 patent, the magistrate judge found that alt-
 hough Sgromo was listed as an inventor, Eureka Inven-
 tions was the original assignee of the patent and then
 assigned all ownership rights to Bestway. J.A. 31–33.
 With regard to the H2O-GO! trademarks, the magistrate
 judge found that the trademarks were issued to and owned
 by Bestway and that Sgromo failed to demonstrate that he
 held any ownership rights over these trademarks. J.A. 33–
 35. The magistrate judge also found that Sgromo’s pur-
 ported assignments for the ’422 and ’440 patents and the
 H2O-GO! trademarks were not actual assignment docu-
 ments but instead declarations and a notice of recordation
 with no legal effect. J.A. 26–35.
     Because Sgromo lacked ownership of any of the as-
 serted patents and trademarks, the magistrate judge rec-
 ommended granting Target’s motion to dismiss for lack of
 subject matter jurisdiction on the ground that Sgromo
 lacked standing to assert claims for infringement. J.A. 41.
 In addition, because Sgromo also failed to demonstrate
 that he had a fair chance of prevailing on any of his claims,
 the magistrate judge recommended denying Sgromo’s mo-
 tion for a preliminary injunction. J.A. 41–42. Judge John
 Tunheim adopted the report and recommendation and dis-
 missed the claims. J.A. 2–14.
     Sgromo then filed the present notice of appeal to this
 court, appealing the district court’s grant of Target’s mo-
 tion to dismiss and denial of Sgromo’s motion for a prelim-
 inary injunction. S.A. 433. We have jurisdiction under 28
 U.S.C. § 1291.
                         DISCUSSION
     We review a grant or denial of a motion to dismiss for
 lack of standing de novo, but the underlying facts used to
 support the decision are reviewed for clear error. See
 Hewlett-Packard Co. v. Acceleron LLC, 587 F.3d 1358, 1361
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 6                              SGROMO   v. TARGET BRANDS INC.

 (Fed. Cir. 2009). “A finding is ‘clearly erroneous’ when alt-
 hough there is evidence to support it, the reviewing court
 on the entire evidence is left with the definite and firm con-
 viction that a mistake has been committed.” United States
 v. Gypsum Co., 333 U.S. 364, 395 (1948).
      Because the grant, denial, or modification of a prelimi-
 nary injunction is not unique to patent law, we apply the
 regional circuit law when reviewing and interpreting such
 decisions. See, e.g., Aevoe Corp. v. AE Tech Co., 727 F.3d
 1375, 1381 (Fed. Cir. 2013). The Eighth Circuit reviews a
 district court’s decision granting or denying a preliminary
 injunction for abuse of discretion. See Barrett v. Claycomb,
 705 F.3d 315, 320 (8th Cir. 2013). A district court abuses
 its discretion by basing its decision, inter alia, on an erro-
 neous legal standard or clearly erroneous findings of fact.
 Id.
     Sgromo argues that the district court erred by failing
 to properly apply contract law in interpreting the assign-
 ments and corresponding ownership of the patents and
 trademarks at issue in this case. Target contends that this
 argument is baseless because the court did not engage in
 any contract interpretation. We agree with Target. The
 court did not engage in any contract interpretation in find-
 ing that Sgromo did not own any of the patents or trade-
 marks at issue. To the extent that Sgromo contends that
 the court erred in finding that he did not have ownership
 of the patents and trademarks at issue, we disagree.
     Sgromo did not hold ownership of any of the patents or
 trademarks when he asserted them. At all relevant times,
 as indicated by publicly available assignment forms, Scott,
 Bestway, or Imperial Toy owned the ’422, ’440, and ’298
 patents and the H2O-GO! trademarks. See J.A. 26–35, 63;
 S.A. 111–22, 170–75. Although Sgromo is listed as an in-
 ventor on the ’298 and ’422 patents, he had assigned them
 to others and lacked ownership of these patents when he
 attempted to sue on them. In addition, the purported
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 SGROMO   v. TARGET BRANDS INC.                                7

 assignments Sgromo filed for the ’422 patent, ’440 patent,
 and H2O-GO! trademarks have no legal effect. See 37
 C.F.R. § 3.54 (“The recording of a document . . . is not a
 determination by the Office of the validity of the document
 or the effect that document has on the title to an applica-
 tion, a patent, or a registration.”).
     The district court’s findings regarding ownership in the
 present case are consistent with those of the other courts
 that have found that Sgromo holds no ownership rights to
 the ’422, ’440, and ’298 patents and the H2O-GO! trade-
 marks. Because Sgromo lacked ownership of the patents
 and trademarks at issue when he brought this suit, he
 lacks standing to assert his claims for infringement. See
 Paradise Creations, Inc. v. UV Sales, Inc., 315 F.3d 1304,
 1309 (Fed. Cir. 2003) (“[T]o assert standing for patent in-
 fringement, the plaintiff must demonstrate that it held en-
 forceable title to the patent at the inception of the lawsuit.”)
 (emphasis in the original). We therefore affirm the court’s
 dismissal of Sgromo’s action.
      Sgromo also asserts infringement of U.S. Patent
 9,069,243 for the first time on appeal. This patent was not
 asserted against Target at the district court and cannot be
 raised for the first time on appeal. See Sage Prods., Inc. v.
 Devon Indus., Inc., 126 F.3d 1420, 1426 (Fed. Cir. 1997)
 (“With a few notable exceptions . . . appellate courts do not
 consider a party’s new theories, lodged first on appeal. If a
 litigant seeks to show error in a trial court’s overlooking an
 argument, it must first present that argument to the trial
 court.”).
     In light of our affirmance of the dismissal of Sgromo’s
 action, the portion of the district court’s decision address-
 ing Sgromo’s motion for a preliminary injunction is moot.
 Thus, we do not address Sgromo’s appeal from that portion
 of the court’s decision.
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 8                              SGROMO   v. TARGET BRANDS INC.

                        CONCLUSION
     For the foregoing reasons, the decision of the district
 court is affirmed.
                       AFFIRMED
                           COSTS
 Costs are awarded to Target.