The Federal Circuit recently vacated a $20 million jury verdict in favor of a patentee and remanded with instructions to dismiss the case for lack of subject matter jurisdiction, finding that the patentee did not own the asserted patents at the time it filed suit and therefore lacked standing.
The two patents at issue are directed to surgical instruments used in knee replacement procedures. The inventor developed a surgical instrument called the “Zen Instrument” and filed patent applications on it beginning in 2005. In 2006, he entered into an agreement (the 2006 Agreement) with Wright Medical, which stated that the inventor “hereby assigns to Wright all of [the inventor’s] right, title, and interest,” including all intellectual property rights, in the Zen Instrument and any improvements to it.
In 2013, the inventor and Wright ended their business relationship through a Settlement Agreement and a Licensing Agreement. The Settlement Agreement amended the 2006 Agreement by removing the recitations of the “Licensed Product,” i.e., Zen Instrument. Notably, the 2006 Agreement as amended by the 2013 Settlement Agreement retained the language conveying assignment of intellectual property rights from the inventor to Wright, yet none of the agreements stated that Wright had conveyed those intellectual property rights back to the inventor.
In 2020, the inventor formed an LLC (the patentee) and purported to assign to it the two patents at issue. The patentee then sued the defendants for infringement of the patents.
At trial, the jury found that the defendants had willfully infringed one of the asserted patents and awarded $20 million in damages. The district court denied the defendants’ post-trial renewed motion for judgment as a matter of law that argued the patentee had failed to prove ownership of the patents. The defendants appealed, arguing that the patentee lacked standing because it did not own the patents at the time of filing the lawsuit.
On appeal, the Federal Circuit reviewed the ownership issue de novo and found that the inventor had failed to transfer ownership of the patents to the patentee. In reaching that outcome, the Federal Circuit first rejected the patentee’s argument that the assignment provision in the 2006 Agreement was not self-executing. The court explained that the 2006 Agreement clearly and unambiguously assigned all relevant patent rights from the inventor to Wright using the present tense wording “hereby assigns,” which made the assignment to Wright “immediate, automatic, and self-executing.” The court also disagreed with the patentee’s contention that the assignment only applied to future inventions but not to the Zen Instrument, finding it would be “bizarre” for Wright not to seek rights to the very device it sought to commercialize. Finally, the Federal Circuit explained that, under its caselaw, the 2013 Settlement Agreement’s attempt to revoke the original assignment to Wright by retroactively amending the 2006 Agreement was ineffective. Rather, to nullify and void the original assignment, there needed to be a forfeiture provision in the agreement or a provision of the applicable state law. Because no such provisions were shown by the inventor, the 2013 Settlement Agreement did not reassign the rights back to the inventor or otherwise undo the original assignment. Since the inventor never reacquired ownership of the patents from Wright, he had no rights to convey to the patentee in 2020. As a result, the patentee lacked standing to bring the infringement action, and the district court had no jurisdiction.
Practice tip: Prior to filing an infringement suit, a potential plaintiff should carefully review each patent’s assignment and licensing history to ensure proper ownership over the patents. The potential plaintiff’s review should include any employment agreements and other contracts that could affect ownership and should also consider applicable state laws. When determining ownership, a potential plaintiff should be aware that a previous attempt to undue a prior assignment by merely retroactively amending the initial agreement without nullifying and voiding the original assignment through, for example, a forfeiture provision, may be insufficient to revoke the assignment. In such circumstances, a potential plaintiff should consider executing a new assignment to transfer ownership of the patent.
Rasmussen Instruments, LLC v. DePuy Synthes Prods., Inc., No. 2023-1855 (Fed. Cir. Oct. 6, 2025)