Another One Bites the Dust: Action Dismissed for Lack of Standing Where Plaintiff Could Not Prove Ownership of the Patent-In-Suit
America’s Collectibles Network (“ACN”) filed a patent infringement action in which it claimed to own U.S. Patent No. 8,370,211 (the “211 Patent”). It brought this action against the Genuine Gemstone Company (“Genuine Gemstone”). Genuine Gemstone filed a motion to dismiss contending that it is the rightful owner of the 211 Patent and that ACN lacks standing to assert infringement.
The district court explained the background facts as follows: “On June 18, 2010, The Colourful Company Group acquired Gems TV (UK) Ltd–the then owner of the 211 Patent–through a share purchase agreement. After the transaction was completed, Gems TV (UK)’s former director, Anthony Hillyer, signed a document purportedly assigning Gems TV (UK)’s interest in the patent to a US affiliate that was not part [of] the sale. ACN traces its chain of title back to that assignment. If the assignment was valid, as ACN contends, then ACN is the rightful owner of the 211 Patent, and this suit may proceed. On the other hand, if the assignment was invalid as the defendant claims, then ACN is not the rightful owner of the 211 Patent, and it lacks standing to assert its infringement claim.”
The district court then analyzed whether the assignment was valid and concluded it was not. “This case revolves around whether or not the addendum Mr. Hillyer executed is valid. It is not. The Gems TV (UK) sale was completed by 7:13 a.m. the morning of June 18, 2010. Anthony Hillyer had previously executed a compromise agreement and resigned as a director of Gems TV (UK) effective at 6:45 a.m. that day. When Mr. Hillyer executed the addendum to assign the 211 Patent sometime after 8:00 a.m. on June 18, 2010, ownership of the 211 Patent (along with the rest of Gems TV (UK) had already been transferred to the Colourful Group, and Mr. Hillyer had resigned from his position as director of Gems TV (UK) Ltd. Mr. Hillyer clearly lacked the authority to transfer Gems TV (UK)’s intellectual property at the time he executed the addendum. The addendum is, therefore, invalid.”
Accordingly, the district court found that ACN lacked standing and dismissed the action. “To be clear, this Court is not holding that Genuine Gemstone is the lawful owner of the 211 Patent. This opinion only considers whether ACN has met its burden of establishing standing. Because ACN has not done so, this Court is without subject-matter jurisdiction. Genuine Gemstone’s counterclaims relating to infringement, validity, and patent eligibility are moot, and will be dismissed as such.”
America’s Collectible Network, Inc. v. The Genuine Gemstone Company, Ltd., Case No. 3:13-CV-335-PLR-HBG (E.D. Tenn. April 2015)