Black Hills Media LLC v. Pioneer Corporation, et al., 2-13-cv-05980 (CACD January 14, 2014, Order) (Otero, J.)
Thursday, January 16, 2014
Amendment of Complaint as of Right Does Not Cure Lack of Standing
The court granted defendants' motions to dismiss plaintiff's infringement actions for lack of standing because plaintiff did not own three patents-in-suit at the time of filing even though plaintiff then obtained ownership rights before filing and serving its amended complaint. "[N]o court has yet squarely addressed whether an amended complaint as of right supercedes the original complaint in determining whether a plaintiff has standing under the Patent Act. . . . [A]llowing Plaintiff's suggested rule could incentivize a party to bring suit for patent infringement without owning the patents. That party could then withhold service of the complaint and enter settlement negotiations with the alleged infringers. While patent transfers may be recorded with the Patent and Trademark Office, it is not required, so the alleged infringers could not be certain of the validity of the plaintiff's claimed title. If the settlement negotiations succeed, the plaintiff receives a windfall. If not, it could continue with the lawsuit, so long as it then properly obtained title and filed an amended complaint as a matter of course. . . . Following Plaintiff's suggested rule would give this type of plaintiff another tool to avoid transparency by allowing claims by shell companies that do not even own the patents they assert. The Court does not wish to reward parties who aggressively seek to vindicate rights not yet theirs."