Friday, January 28, 2011

Transfer of Operations to Parent Entity Without Corresponding Transfer of Patent Rights Precludes Lost Profits

Defendant's motion for summary judgment of no lost profit damages was granted in part. "After [plaintiff's parent's] acquisition of [plaintiff], [plaintiff] operations were transferred to [its parent]. [Plaintiff] is still in existence and has consolidated financial statements; however, the business expenses incurred to produce the [products and services at issue] are now incurred by [the parent]. . . . [Plaintiff] has not assigned the patent-in-suit to [its parent] nor granted a license to [its parent]. This evidence establishes that, since the stock acquisition and restructuring of operations, as a matter of law, these profits and losses are, in effect, the profits and losses of [the parent], a non-party. . . . [Plaintiff] cannot recover lost profits after the date [its] operations . . . ceased. The precise date when this occurred is a question of fact for the jury to decide."

Duhn Oil Tool Inc. v. Cooper Cameron Corporation, 1-05-cv-01411 (CAED January 24, 2011, Order) (Wanger, J.).

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