Common Ownership Required to Maintain Enforceability of Patent Subject to Terminal Disclaimer Means Ownership by Same Entity, not Same Corporate Family

The court granted defendants' motion to dismiss plaintiff's infringement claim for failure to state a claim because the asserted patent had been the subject of a terminal disclaimer but plaintiff did not own the prior patent. "The parties agree with binding Federal Circuit precedent that holds that if the ownership of a disclaimed patent is separated from the prior patent, the disclaimed patent is not enforceable. . . . Plaintiff’s argument that both the [patent-in-suit], owned by Plaintiff . . . and the [prior patent], owned by [a different entity], are owned by Acacia by virtue of its 100% ownership of [plaintiff] and [the other entity] goes against a 'basic tenet of American corporate law . . . that the corporation and its shareholders are distinct entities. . . . A corporate parent which owns the shares of a subsidiary does not, for that reason alone, own or have legal title to the assets of the subsidiary.'"

Email Link Corp. v. Treasure Island, LLC et al, 2-11-cv-01433 (NVD September 25, 2012, Order) (Reed, J.).