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After-the-fact Patent Assignment Too Late to Save Jurisdiction
November 24, 2010

A patent assignment that was prepared after a patent infringement law suit was commenced was too late to save jurisdiction the Federal Circuit held in Abraxis Bioscience, Inc. v. Navinta LLC. Because the plaintiff did not obtain ownership of the patents at issue until after the lawsuit was commenced, the plaintiff lacked standing at the time the case was initiated and dismissal of the case was mandatory.

Abraxis markets the drug NAROPIN as a local anesthetic for use in surgery and for acute pain management. NAROPIN is the subject of three patents. Initially the patents were assigned by the inventor to AB Astra. AB Astra assigned the NAROPIN patents to AstraZeneca AB. Therefore, as of June 1994, the NAROPIN patents were owned by AstraZeneca AB.

In April 2006, Abraxis entered into an asset purchase agreement with AstraZeneca UK, an affiliate of AstraZeneca AB. Pursuant to the asset purchase agreement, AstraZeneca UK executed an IP Assignment Agreement stating in pertinent part that “[AstraZeneca UK] will . . . execute . . . any and all further . . . assignments . . . as necessary . . . to vest in [Abraxis] any of the [patents at issue].” However, at the time the IP Assignment Agreement was executed, the patents were still owned by AstraZeneca AB and not by AstraZeneca UK. Therefore, there was a break in the chain of title.

In March 2007, Abraxis filed an action against Navinta alleging that Navinta’s proposed new drug would infringe the NAROPIN patents. Apparently recognizing the possible break in the chain of title, AstraZeneca AB executed an assignment of the NAROPIN patents to AstraZeneca UK on the same day the complaint was filed. In November 2007, several months after the action had been commenced, AstraZeneca UK executed an assignment of the NAROPIN patents to Abraxis “confirming the sale, assignment, conveyance and transfer to Abraxis” of all rights in the NAROPIN patents—including the right to sue for patent infringement--no later than the date of the original IP Assignment Agreement between Abraxis and AstraZeneca UK.

The Federal Circuit first noted that standing is a constitutional requirement and that a court may exercise jurisdiction only if the plaintiff had standing to sue at the date it files suit. The Court found that Abraxis did not acquire ownership of the NAROPIN patents until the November 2007 assignment. Therefore, Abraxis lacked standing at the time the lawsuit was filed, and the case had to be dismissed for lack of subject matter jurisdiction. The finding that ownership did not transfer until November 2007, rather than on the date of the assignment to AstraZeneca UK, was based at least in part on the fact that the language of IP Purchase Agreement was not automatic and contemplated further written assignment of the patents by AstraZeneca UK.

Judge Newman dissented arguing that New York state law should have applied, and that under New York law the after-the-fact assignment that gave an effective date of June 2006 was sufficient to transfer ownership prior to commencement of the lawsuit.

To read the full opinion in Abraxis Bioscience, Inc. v. Navinta LLC, click here.

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