Schwendimann v. Arkwright Advanced Coating ( 2020 )

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United States Court of Appeals
for the Federal Circuit
______________________
JODI A. SCHWENDIMANN, FKA JODI A. DALVEY,
Plaintiff/Counterclaim Defendant-Cross-Appellant
COOLER CONCEPTS, INC.,
Counterclaim Defendant-Cross-Appellant
v.
ARKWRIGHT ADVANCED COATING, INC.,
Defendant/Counterclaimant-Appellant
______________________
2018-2416, 2019-1012
______________________
Appeals from the United States District Court for the
District of Minnesota in No. 0:11-cv-00820-JRT-HB, Judge
John R. Tunheim.
______________________
SEALED OPINION ISSUED: May 5, 2020
PUBLIC OPINION ISSUED: May 13, 2020 *
* This opinion was originally filed under seal and is
now unsealed in full.
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______________________
DEVAN V. PADMANABHAN, Padmanabhan & Dawson,
PLLC, Minneapolis, MN, argued for plaintiff/counterclaim
defendant-cross-appellant and counterclaim defendant-
cross-appellant. Also represented by MICHELLE DAWSON,
ERIN DUNGAN, PAUL J. ROBBENNOLT.
MICHAEL HAWES, Baker Botts, LLP, Houston, TX, ar-
gued for defendant/counterclaimant-appellant. Also repre-
sented by LAUREN J. DREYER, Washington, DC; LAURA
LYNN MYERS, KURT JOHN NIEDERLUECKE, Fredrikson & By-
ron, PA, Minneapolis, MN.
______________________
Before O’MALLEY, REYNA, and WALLACH, Circuit Judges.
Opinion for the court filed by Circuit Judge WALLACH.
Dissenting opinion filed by Circuit Judge REYNA.
WALLACH, Circuit Judge.
Cross-Appellant Jodi A. Schwendimann filed a lawsuit
in the U.S. District Court for the District of Minnesota
(“District Court”) against Appellant Arkwright Advanced
Coating, Inc. (“Arkwright”), alleging infringement of U.S.
Patent Nos. RE41,623, 7,749,581, 7,754,042, 7,766,475,
7,771,554, and 7,824,748 (collectively, the “Patents-in-
Suit”). 2 Following a jury trial, a judgment of willful
2 U.S. Patent Nos. 7,749,581, 7,754,042, and
7,766,475 are continuations of an application which is a di-
vision of U.S. Patent Application No. 09/541,845 (filed on
Apr. 3, 2000) (“the ’845 application”), entitled “Method of
Image Transfer on a Colored Base,” which is a continua-
tion-in-part of U.S. Patent Application No. 09/391,910 (“the
’910 application”). U.S. Patent No. RE41,623 is the reissue
of U.S. Patent No. 6,884,311, which was the resulting
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SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING 3
infringement was entered against Arkwright, the jury
awarded Ms. Schwendimann damages in the amount of
$2,624,228.00, and the District Court allowed prejudgment
interest of $1,915,328.00. See Schwendimann v. Arkwright
Advanced Coating, Inc., No.11-cv-00820-JRT-HB, 2018
WL 3621206, at *9 (D. Minn. July 30, 2018); J.A. 104–06
(Judgment).
Arkwright appeals. Ms. Schwendimann and her com-
pany Cooler Concepts, Inc. (“Cooler Concepts”) cross ap-
peal. We have jurisdiction pursuant to 28 U.S.C.
§ 1295(a)(1). We affirm.
BACKGROUND
I. Factual History
Starting in 1992, Ms. Schwendimann worked at Amer-
ican Coating Technologies, Inc. (“ACT”), J.A. 8594, which
was owned by Nabil Nasser, J.A. 8595–96. ACT manufac-
tured paper coating products. J.A. 8608. Ms. Schwend-
imann eventually became a vice president at ACT,
J.A. 8597, and worked there until the company ceased op-
erations in 2001, J.A. 8598. From 1998 through 2000,
Ms. Schwendimann and Mr. Nasser filed two patent appli-
cations with the U.S. Patent and Trademark Office
(“USPTO”), claiming inventions relating to image
patent of the ’845 application. A continuing patent appli-
cation is “an application filed subsequently to another ap-
plication, while the prior application is pending, disclosing
all or a substantial part of the subject-matter of the prior
application and containing claims to subject-matter com-
mon to both applications, both applications being filed by
the same inventor or his legal representative.” U.S. Water
Servs., Inc. v. Novozymes A/S, 843 F.3d 1345, 1348 n.1
(Fed. Cir. 2016) (internal quotation marks and citation
omitted). The Patents-in-Suit relate to methods for trans-
ferring images onto a colored base. J.A. 277.
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4 SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING
transferring sheets—U.S. Patent Application Nos.
09/150,983 (“the ’983 application”), J.A. 703, 8619–22, and
the ’845 application, J.A. 703–04—in which both individu-
als were named as inventors. In 1999, Ms. Schwendimann
filed a patent application, U.S. Patent Application No.
09/391,910 (“the ’910 application”), in which Ms. Schwend-
imann was named the sole named inventor. J.A. 703. Ms.
Schwendimann and Mr. Nasser conveyed assignment of all
three applications to ACT in 1998 to 2000. J.A. 703–04.
When ACT ceased operations in 2001, it owed signifi-
cant debt to various lenders, as well as to Ms. Schwend-
imann for her wages and sales commissions. J.A. 1344.
ACT provided to Ms. Schwendimann a promissory note for
the amount $282,073.25 for its outstanding debt to her.
J.A. 8608. It had “become clear,” however, that ACT would
be unable to pay Ms. Schwendimann outright. J.A. 1344.
At the same time, ACT owed attorney fees to its attorneys
at the firm Schwegman, Lundberg & Woessner, P.A.
(“SLW”), which were incurred during the prosecution of
ACT’s patent applications, and which amounted to around
$25,000 to $30,000. J.A. 705, 1344. To settle its outstand-
ing debts, ACT reached an agreement with Ms. Schwend-
imann, in which ACT transferred assignment of its patent
applications—including the ’983, ’845, and ’910 applica-
tions—to Ms. Schwendimann to satisfy its outstanding
debt to her (“2001 Security Agreement”). J.A. 1344. In re-
turn, Ms. Schwendimann agreed to “take responsibility” for
and satisfy ACT’s debts to SLW. J.A. 18682–83.
Ms. Schwendimann also agreed that she would not sue
ACT for her unpaid wages. J.A. 8665. To memorialize the
assignment of the applications, Mr. Nasser and
Ms. Schwendimann met with an SLW attorney and in-
structed her to prepare and file the necessary documents
to assign the applications to Ms. Schwendimann.
J.A. 8682–83. In June 2002, SLW opened new client mat-
ters for Ms. Schwendimann regarding the three outstand-
ing applications. J.A. 705.
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SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING 5
In January 2003, SLW prepared a draft assignment of
the ’983 application. J.A. 705. The following month,
Mr. Nasser executed the assignment of the ’983 application
on behalf of ACT, J.A. 733–37, and, the next day, SLW filed
the executed assignment with the USPTO, J.A. 486–90.
Throughout 2003, the SLW partner primarily representing
both ACT and Ms. Schwendimann, Janal Kalis, J.A. 702,
communicated with an SLW paralegal, Candy Buending,
regarding the assignment of the ’845 and ’910 applications,
J.A. 706. In both May and December 2003, Ms. Kalis
sought confirmation from Ms. Buending that the assign-
ments for the two applications were finalized. J.A. 706.
Ms. Buending drafted assignments for both the ’845
and ’910 applications, J.A. 706, which Mr. Nasser never
saw or signed, J.A. 1349–50.
In December 2003, SLW filed the following documents
with the USPTO: (1) a fax filing cover sheet notifying and
instructing the USPTO to record and attach an assignment
for the ’845 application; (2) a Recordation Form Cover
Sheet notifying the USPTO that ACT had conveyed by as-
signment the ’845 application to Ms. Schwendimann; and
(3) a copy of the ’983 application assignment with an alter-
ation (“Hand-Altered Copy”). J.A. 707; see J.A. 501–03.
The Hand-Altered Copy contains the ’983 patent’s title, ap-
plication number, the execution date of the ’983 application
assignment, and Mr. Nasser’s signature. J.A. 502–03. In
the upper righthand corner, the Hand-Altered Copy also
contains the handwritten number “1010.021.” J.A. 502.
SLW had assigned Ms. Schwendimann the internal client
number of “1010” and used the number “1010.021” to ref-
erence the ’845 application. J.A. 705. SLW acknowledged
that it filed the incorrect assignment for the ’845 applica-
tion. J.A. 8468 (“So, [Ms. Kalis] attached the wrong assign-
ment. No doubt about it.”). The USPTO accepted the filing
and altered the record owner of the ’845 application in its
database to Ms. Schwendimann. J.A. 707.
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6 SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING
In 2011, Ms. Schwendimann claims she became aware
for the first time that the incorrect assignment was filed
with the USPTO for the transfer of the ’845 application.
Cross-Appellant’s Br. 12. Subsequently, ACT assigned the
Patents-in-Suit to Ms. Schwendimann (“2011 Assign-
ment”), J.A. 8614–16, and it was recorded with the USPTO,
J.A. 505–09. Ms. Schwendimann and ACT executed a sat-
isfaction of debt agreement, which stated that ACT “is in-
debted to [Ms. Schwendimann] under” the Satisfaction of
Debt Agreement, as well as the parties’ 2001 Security
Agreement and other bank loans “in excess of $600,000.”
J.A. 1283; see J.A. 1283–87 (Satisfaction of Debt Agree-
ment). The parties agreed that “[ACT] hereby consents to
[Ms. Schwendimann’s] acceptance of certain of the [c]ollat-
eral consisting of [ACT’s] right, title and interest in certain
patents as described on Schedule I[.]” J.A. 1284 (emphasis
removed). Schedule I lists, inter alia, the Patents-in-Suit.
J.A. 1287. The Satisfaction of Debt Agreement was ap-
proved by the surviving members of the ACT’s Board of Di-
rectors (“Board”). J.A. 1290; see J.A. 1289–91 (ACT
Written Action). In the ACT Written Action, the Board
acknowledged that “ACT is currently indebted to [Ms.
Schwendimann] . . . under a Promissory Note . . . in the
principal amount of $282,073.25” and that, pursuant to
the 2001 Security Agreement “[ACT] granted [Ms.
Schwendimann] a security interest in [ACT’s] personal
property and all proceeds thereof[.]” J.A. 1289–90. It fur-
ther acknowledged that ACT had received two loans from
a bank, which were secured by ACT’s personal property
and that Ms. Schwendimann’s company, Cooler Concepts,
“purchased the [b]ank’s rights to collect the [b]ank [l]oans
and the [b]ank’s collateral position[.]” J.A. 1289. Moreo-
ver, it stated that “[Ms. Schwendimann] has perfected her
security interest in the [c]ollateral by (i) filing a UCC-1 Fi-
nancing Statement with the Minnesota Secretary of
State . . . and with the Wisconsin Department of Financial
Institutions . . . and by (ii) recording an Assignment with
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SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING 7
the [USPTO].” J.A. 1289. Accordingly, the Board approved
the Satisfaction of Debt Agreement. J.A. 1289.
II. Procedural History
In April 2011, Ms. Schwendimann filed a complaint
against Arkwright for infringement of the Patents-in-Suit
with the District Court. J.A. 274–83 (Complaint). 3 In
July 2011, Arkwright asserted a lack of standing on the
grounds that Ms. Schwendimann did not own the Patents-
in-Suit. J.A. 433–34 (Motion to Dismiss for Lack of Juris-
diction). It was at this point that Ms. Schwendimann and
ACT took corrective action, including the 2011 Assignment
and the Satisfaction of Debt Agreement. J.A. 8614–17; see
J.A. 1289–91. In January 2012, Arkwright moved to dis-
miss the Complaint for lack of standing and Ms. Schwend-
imann moved for summary judgment on the same issue.
J.A. 8. In March 2012, the District Court denied both mo-
tions. J.A. 1–18. In doing so, the District Court deter-
mined the Hand-Altered Copy constituted an “instrument
in writing” pursuant to 35 U.S.C. § 261 (2006). J.A. 13; see
J.A. 9–13. 4 The District Court determined that it did not
3 Ms. Schwendimann originally filed suit against
Arkwright in 2008, which was stayed pending reexamina-
tion of the Patents-in-Suit. See Schwendimann v. Ark-
wright, No. 8-cv-162, D.I. 100 (D. Minn. Aug. 19, 2008).
Following reexamination, the parties stipulated to
Ms. Schwendimann refiling the Complaint in 2011. See
Appellant’s Br. 4 n.1, Cross-Appellant’s Br. 4.
4 Section 261 of Title 35 of the United States Code
states:
Applications for patent, patents, or any interest
therein, shall be assignable in law by an instru-
ment in writing. The applicant, patentee, or his as-
signs or legal representatives may in like manner
grant and convey an exclusive right under his
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8 SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING
have sufficient evidence to assess whether the Hand-Al-
tered Copy constituted a valid assignment of the ’845 ap-
plication. J.A. 17. The production of additional discovery
ensued, after which Ms. Schwendimann renewed her mo-
tion for summary judgment on standing and the District
Court granted it, finding that there was no genuine issue
of material fact that ACT had assigned the ’845 application
to Ms. Schwendimann in 2002. J.A. 26–30. Arkwright ap-
pealed the decision to this court. See Schwendimann v.
Arkwright Advanced Coating, Inc., 506 F. App’x 996 (Ta-
ble), at *1 (Fed. Cir. 2013). “[W]e decline[d] to entertain
this interlocutory appeal.” Id.
Following a jury trial, a judgment of willful infringe-
ment was entered against Arkwright and the jury awarded
Ms. Schwendimann damages in the amount of
$2,624,228.00. J.A. 39–40. Subsequently, the District
Court awarded prejudgment interest on the damages in the
amount of $1,915,328.00. See Schwendimann, 2018
WL 3621206, at *23; see also J.A. 104–05. Relevant here,
the District Court determined that it would award a 10 per-
cent prejudgment interest rate, pursuant to Minnesota
Statute § 549.09 (2015). See Schwendimann, 2018
WL 3621206, at *22. First, the District Court rejected
5
Arkwright’s proposed 1.42 percent interest rate, conclud-
ing that it was “unpersuaded” that such a rate “[wa]s suf-
ficient to place [Ms.] Schwendimann ‘in as good a position
as [s]he would have been in had [Arkwright] entered into a
reasonable royalty agreement.’” Id. (quoting General Mo-
tors Corp. v. Devex Corp., 461 U.S. 648, 655 (1983)). Sec-
ond, the District Court determined that the prejudgment
application for patent, or patents, to the whole or
any specified part of the United States.
5 Section 549.09 states that, “[f]or a judgment or
award over $50,000, . . . the interest rate shall be ten per-
cent per year until paid.” MINN. STAT. § 549.09(c)(2).
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SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING 9
interest rate should be calculated based on the amount of
damages awarded by the jury and not of Arkwright’s final
settlement offer, as Arkwright failed to provide a written
offer. Id. Third, the District Court concluded that prejudg-
ment interest should be calculated on the total damages
and not based on the number of infringing sales per year.
Id.
DISCUSSION
On appeal, Arkwright contends that the District Court
erred in finding that Ms. Schwendimann had standing, Ap-
pellant’s Br. 28, and in its award of prejudgment interest,
id. at 60. We discuss each issue in turn.
I. The Photocopy Assignment
A. Standard of Review and Legal Standard
When the district court entered the judgment at issue
in this appeal, it did not have the benefit of our recent prec-
edential decision in Lone Star Silicon Innovations LLC v.
Nanya Tech. Corp., 925 F.3d 1225, 1299 (Fed. Cir. 2019).
Nor did the parties when they filed their appellate briefs.
In Lone Star, we made clear that whether one qualifies as
a patentee under 35 U.S.C. § 281 is a statutory prerequisite
to the right to relief in a patent infringement action, but
does not implicate the district court’s subject matter juris-
diction. There, we recognized that intervening Supreme
Court precedent made clear that our earlier decisions
treating the prerequisites of the Patent Act as jurisdic-
tional were wrong. We expressly held that “[w]e therefore
firmly bring ourselves into accord with Lexmark [Int’l, Inc.
v. Static Control Components, Inc., 572 U.S. 118 (2014)]
and our sister circuits by concluding that whether a party
possesses all substantial rights in a patent does not impli-
cate standing or subject-matter jurisdiction.” Lone Star,
925 F.3d at 1235–36. As long as a plaintiff alleges facts
that support an arguable case or controversy under the Pa-
tent Act, the court has both the statutory and
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10 SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING
constitutional authority to adjudicate the matter. Id. at
1235 (citing Lexmark Int’l, Inc. v. Static Control Compo-
nents, Inc., 572 U.S. 118, 128 n.4 (2014)). Because Ms.
Schwendimann’s Complaint contained such allegations—
that she is the owner by assignment of the ’845 patent and
Appellants infringed that patent—there is no “standing” is-
sue to be decided in this appeal. 6
6 The dissent disagrees and asserts that the Patent
Act’s prerequisites must be treated as jurisdictional be-
cause the right to exclude has constitutional underpin-
nings. There are two problems with that contention. First,
Lone Star states the opposite in a precedential decision.
The dissent, like all subsequent panels, is bound by Lone
Star. Second, not only has the Supreme Court made clear
that virtually all statutory filing prerequisites are non-ju-
risdictional, see, e.g., Fort Bend Cty., Texas v. Davis, 139 S.
Ct. 1843, 1846 (2019) (Title VII’s charge-filing instruction
is non-jurisdictional); United States v. Kwai Fun Wong, 575
U.S. 402, 410 (2015) (“But traditional tools of statutory con-
struction must plainly show that Congress imbued a proce-
dural bar with jurisdictional consequences. In applying
that clear statement rule, we have made plain that most
time bars are nonjurisdictional.”); Union Pacific R. Co. v.
Brotherhood of Locomotive Engineers and Trainmen Gen-
eral Comm. of Adjustment, Cent. Region, 558 U.S. 67, 82
(2009) (providing that the Clean Air Act’s instruction that,
to maintain an objection in court on certain issues, one
must first raise the objection “with reasonable specificity”
during agency rulemaking, is non-jurisdictional), but it has
held that the registration requirement in the Copyright Act
is non-jurisdictional, see Reed Elsevier, Inc. v. Muchnick,
559 U.S. 154, 157 (2010). The Copyright Act is no less tied
to the Intellectual Property Clause in the Constitution
than is the Patent Act.
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SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING 11
Thus, despite the way the parties have framed the is-
sue in their briefing, the only questions we must decide are
whether Ms. Schwendimann was a patentee at the time her
action was filed and, if that status was conferred upon her
by assignment, whether that assignment is reflected in a
written instrument within the meaning of 35 U.S.C. § 261.
We answer both questions in the affirmative.
Under Title 35, only a “patentee” is permitted to pursue
a patent infringement action, 35 U.S.C. § 281. A “patentee”
includes “not only the patentee to whom the patent issued
but also the successors in title to the patentee.” 35 U.S.C.
§ 100(d). “If the party asserting infringement is not the pa-
tent’s original patentee, the critical determination regard-
ing a party’s ability to sue in its own name is whether an
agreement transferring patent rights to that party is, in ef-
fect, an assignment or a mere license.” Lone Star, 925 F.3d
at 1299 (internal quotation marks and citation omitted).
“[A]n assignee is the patentee and has standing to bring
suit for infringement in its own name.” Enzo APA & Son,
Inc. v. Geapag A.G., 134 F.3d 1090, 1093 (Fed. Cir. 1998)
(citing 35 U.S.C. § 100(d)). To confer patentee status to the
assignee, an assignment must be documented in an “in-
strument in writing[,]” but there are no form or content re-
quirements for the written instrument specified in the
statute. 35 U.S.C. § 261; see id. (“Applications for patent,
patents, or any interest therein, shall be assignable in law
by an instrument in writing.”).
In addition to the § 261 written instrument require-
ment of assignment, the plaintiff must have the legal title
to the patent or patent application, which is determined by
state law. See Enovsys LLC v. Nextel Commc’ns Inc., 614
F.3d 1333, 1342 (Fed. Cir. 2010) (“Who has legal title to a
patent is a question of state law.” (citation omitted)); see
also Jim Arnold Corp. v. Hydrotech Sys., Inc., 109
F.3d 1567, 1571 (Fed. Cir. 1997) (“It may seem strange at
first blush that the question of whether a patent is valid
and infringed ordinarily is one for federal courts, while the
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12 SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING
question of who owns the patent rights . . . is a question ex-
clusively for state courts. Yet that long has been the law.”).
The assignment of a patent’s legal title is interpreted
in accordance with contract statutes and common law in
the state where the assignment took place, see Tri-Star El-
ecs. Int’l Inc. v. Preci-Dip Durtal SA, 619 F.3d 1364, 1367
(Fed. Cir. 2010), here Minnesota. Under Minnesota law,
contracts are construed consistent with the parties’ intent
and, where a written contract does not accurately reflect
the parties’ intentions, a court may reform the contract to
reflect the parties’ intentions. See Gartner v. Gartner, 74
N.W.2d 809, 812 (Minn. 1956). To reform a contract under
Minnesota law, a party must provide proof that:
(1) there was a valid agreement between the par-
ties expressing their real intentions; (2) the written
instrument failed to express the real intentions of
the parties; and (3) this failure was due to a mutual
mistake of the parties, or a unilateral mistake ac-
companied by fraud or inequitable conduct by the
other party.
Nichols v. Sherlard Nat’l Bank, 294 N.W.2d 730, 734
(Minn. 1980).
B. Ms. Schwendimann Is the Owner of the ’845 Patent by
Assignment
The District Court concluded that, at the time she filed
her Complaint, Ms. Schwendimann was a patentee entitled
to sue for infringement of the ’845 patent because she is the
assignee of the ’845 application and holds legal title to both
that application and the subsequent ’845 patent. J.A. 36.
Arkwright contends that the District Court clearly erred in
reaching that conclusion because the ’845 application was
assigned to ACT, not Ms. Schwendimann, at the time the
infringement action was filed. Appellant’s Br. 29. We dis-
agree and find that the District Court did not err.
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SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING 13
Arkwright does not seriously dispute the District
Court’s finding that ACT intended to assign the ’845 appli-
cation to Ms. Schwendimann at the time the application
was filed. While Arkwright contends that the 2011 Assign-
ment evidences that no assignment was intended in 2002
when the application was filed, all other evidence supports
the District Court’s contrary conclusion. The District
Court properly concluded that the assignment for the ’845
application granted legal title to Ms. Schwendimann.
There was a valid agreement between Ms. Schwendimann
and ACT. See Nichols, 294 N.W.2d at 734. Both ACT and
Ms. Schwendimann confirmed that in 2002, ACT offered to
assign the ’845 application to Ms. Schwendimann and she
accepted that offer in exchange for the consideration that
she agree not to file suit against ACT for her unpaid wages
and sales commissions, as well as for her acceptance of
ACT’s debt to SLW for the patent applications she was be-
ing assigned. J.A. 8661–62, 8664–65, 9601. Ms. Schwend-
imann’s conduct confirmed the contract, as she performed
her portion of the agreement by not filing suit against ACT
and satisfying the outstanding debts with SLW. J.A. 8688;
see Holt v. Swenson, 90 N.W.2d 724, 728 (Minn. 1958) (“It
is well settled that acceptance of an offer may be by con-
duct[.]”). Moreover, the Hand-Altered copy of the ’983 ap-
plication shows that the parties informed counsel that an
assignment was to be made, even if counsel did not accu-
rately reflect the parties’ precise intentions. Finally, the
Patents-in-Suit all listed Ms. Schwendimann as the as-
signee, without challenge by ACT for almost a decade be-
fore this litigation took place. J.A. 33. In light of all of this
testimony, the District Court did not clearly err in conclud-
ing that the 2011 Assignment, taken in context with the
testimony of Ms. Schwendimann and Mr. Nasser, merely
reaffirmed the 2002 agreement. J.A. 8614–17.
Perhaps recognizing the difficulty of debating the Dis-
trict Court’s findings with respect to what the parties in-
tended in 2002, Arkwright primarily focuses on the writing
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14 SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING
requirement of § 261. See generally Appellant’s Br., Cross-
Appellant’s Br. It argues that the District Court lacked the
authority to reform the writing after the fact to reflect the
parties’ understanding as of 2002 and that, if it did have
that authority, the assignment would not be effective until
the reformation actually occurred and the writing require-
ment was satisfied. We disagree on both points.
We see nothing in § 261 or our case law interpreting
the statute that specifies the type of writing that is neces-
sary to convey an assignment of patent rights, nor do we
see any reason why state law contract principles, including
those pertaining to reformation, would not apply with
equal force to such writings. Here, the District Court con-
cluded that the written instrument that SLW provided to
the PTO in connection with the ’845 application failed to
express the real intention of the parties as of that date. The
District Court found that the reason it failed to express the
parties’ intentions was due to a mutual mistake of fact.
J.A. 35; see J.A. 32–35. Accordingly, because all refor-
mation requirements were met, see Nichols, 294 N.W.2d at
734 (requiring, for contract reformation: a “valid agree-
ment between the parties expressing their real intentions”;
a “written instrument [that] failed to express” those real
intentions; and “this failure was due to a mutual mistake
of the parties”), the District Court properly reformed the
Hand-Altered Copy as an assignment for the ’845 applica-
tion and determined that Ms. Schwendimann was the “pa-
tentee” as of the date that the handwritten instrument was
submitted to the USPTO. J.A. 35; see Tri-Star, 619 F.3d
at 1367 (explaining that a good-faith mistake does not de-
prive the assignment of its force and the standing it con-
veys); Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245, 1250–
51 (Fed. Cir. 2000) (holding that a licensing agreement con-
ferred standing even though the license agreement in-
cluded the wrong patent number because “substantial
patent rights were transferred”).
Case: 18-2416 Document: 60-2 Page: 15 Filed: 05/05/2020
SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING 15
When a court reforms a contract, it simply assures that
the written instrument properly reflects the parties’ agree-
ment. The agreement was effective when made, not as of
the date of the reformation. The written instrument re-
quirement in § 261 does not define when the agreement oc-
curs, it merely requires that some writing confirm the fact
of assignment. By virtue of the reformation, the written
instrument was corrected nunc pro tunc, to the point of the
assignment.
It is for these same reasons that the dissent’s reliance
on our prior holdings in Paradise Creations, Inc. and Gaia
Technologies is unpersuasive. See Dissent Op. at 4 (citing
Paradise Creations, Inc. v. UV Sales, 315 F.3d 1304 (Fed.
Cir. 2003); Gaia Techs., Inc. v. Reconversion Techs., Inc., 93
F.3d 774 (Fed. Cir. 1996)). Even putting aside the fact that
both cases significantly predate Lone Star and the Su-
preme Court case law on which it relies, neither case in-
volves a district court’s reformation of a contract, to
properly reflect a valid, pre-existing transfer agreement.
See Paradise Creations, 315 F.3d at 1309 (holding that a
state corporate revival statute cannot retroactively confer
Article III standing); Gaia Techs., 93 F.3d at 779 (holding
that an assignment, executed on October 24, 1994, but
which claimed to be effective “prior to Gaia’s filing of the
instant suit,” was not sufficient to confer standing on
Gaia). 7 The Hand-Altered copy is not a later license that
the parties declare transferred rights as of some earlier ef-
fective date. The District Court’s reformation of the writ-
ing simply confirmed the earlier written transfer of the
license—both the transfer and the writing predated the fil-
ing of the lawsuit.
7 Abraxis Bioscience, Inc. v. Navinta LLC, 672 F.3d
1239 (Fed. Cir. 2011) (denial of reh’g en banc) is distin-
guishable for the same reasons.
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16 SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING
To understand this principle, it is helpful to consider
an analogous context: reformation of written instruments
that are subject to the statute of frauds. Restatement (Sec-
ond) of Contracts discusses reformation for statute of
frauds contracts—certain types of contracts that, under
common law, must be executed in writing—and states: “If
reformation of a writing is otherwise appropriate, it is not
precluded by the fact that the contract is within the Statute
of Frauds.” Restatement (Second) of Contracts § 156
(1981). The Restatement explains that the premise under-
lying this rule is that a writing evidencing an agreement
may be reformed before it is subjected to the requirements
of the Statute of Frauds because the Statute does not bar
reformation in such a case. Moreover, Minnesota courts
have applied reformation to deeds and contracts that re-
quire a written agreement. See, e.g., Olson v. Erickson, 44
N.W. 317, 318 (Minn. 1980); Olson v. Olson, No. C9-97-
1978, 1998 WL 170111, at *1 (Minn. Ct. App. Apr. 14, 1998)
(“Where a written contract fails, through mistake or fraud,
to express the actual oral agreement, it may be reformed
even though it comes within the statute of frauds.”). Fol-
lowing the Restatement’s logic, the assignment with the
Hand-Altered Copy may be reformed before it is subjected
to the requirements of § 261 because the statute does not
bar reformation. Here, Ms. Schwendimann was the pa-
tentee by virtue of an assignment that occurred before the
suit was filed. While the writing needed to satisfy § 261
had to be reformed, it suffices that reformation occurred
before judgment was entered in the infringement action.
Finally, despite the dissent’s arguments otherwise, our
precedent does not suggest that in the context of agree-
ments assigning existing patents, federal law governs the
interpretation of these contracts. We recognize that, in the
context of employment agreements assigning rights to fu-
ture inventions, our decision in DDB Technologies v. MLB
Advanced Media, 517 F.3d 1284 (Fed. Cir. 2008) estab-
lished an exception to the general rule that state law
Case: 18-2416 Document: 60-2 Page: 17 Filed: 05/05/2020
SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING 17
governs the interpretation of assignment employment
agreements. We have not held that such an exception
should be extended to agreements assigning existing pa-
tents, especially where those assignments occur outside of
the employment context. See, e.g., Enovsys, 614 F.3d at
1342; Larson v. Correct Craft, Inc., 569 F.3d 1319, 1327
(Fed. Cir. 2009) (holding that “questions of patent owner-
ship are determined by state law”); Euclid Chem. Co. v.
Vector Corrosion Techs., Inc., 561 F.3d 1340, 1343 (Fed.
Cir. 2009) (“Construction of patent assignment agreements
is a matter of state contract law.” (quoting Mars, Inc. v.
Coin Acceptors, Inc., 527 F.3d 1359, 1370 (Fed. Cir. 2008)));
MyMail, Ltd. v. Am. Online, Inc., 476 F.3d 1372, 1376 (Fed.
Cir. 2007) (“[T]he only question is one of ownership. State
law, not federal law, addresses such property ownership
disputes.”).
Accordingly, we find that the District Court did not err
in concluding that (1) Ms. Schwendimann was a patentee
at the time of her Complaint; and (2) as of that same time
there was a valid agreement between ACT and
Ms. Schwendimann in 2002 to assign the ’845 application
to Ms. Schwendimann and make her the patentee within
the meaning of 35 U.S.C. § 281. For all of these reasons,
we reject Arkwright’s claim that the lower court judgment
must be set aside because Ms. Schwendimann was not a
patentee entitled to pursue infringement claims relating to
the ’845 patent at the time this action was filed.
II. Prejudgment Interest
A. Legal Standard
Upon a finding of infringement, “the [district] court
shall award the claimant damages adequate to compensate
for the infringement, but in no event less than a reasonable
royalty for the use made of the invention by the infringer,
together with interest and costs as fixed by the court.” 35
U.S.C. § 284. “[P]rejudgment interest should ordinarily be
awarded where necessary to afford the plaintiff full
Case: 18-2416 Document: 60-2 Page: 18 Filed: 05/05/2020
18 SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING
compensation for the infringement.” General Motors, 461
U.S. at 654. Prejudgment interest is not a penalty, but in-
stead “serves to make the patent owner whole, for damages
properly include the foregone use of money of which the pa-
tentee was wrongly deprived.” Sensonics, Inc. v. Aerosonic
Corp., 81 F.3d 1566, 1574 (Fed. Cir. 1996). Awarding “pre-
judgment interest is the rule, not the exception.” Id. We
afford district courts “wide latitude in the selection of in-
terest rates,” and have permitted the use of statutory rates
set by states, U.S. Treasury bill rate, and the prime rate.
See Gyromat Corp. v, Champion Spark Plug Co., 735
F.2d 549, 556 (Fed. Cir. 1984) (citing cases); see also Uni-
royal, Inc. v. Rudkin-Wiley Corp., 939 F.2d 1540, 1545 (Fed.
Cir. 1991) (“A trial court is afforded wide latitude in the
selection of interest rates . . . and may award interest at or
above the prime rate.” (internal citations omitted)). We re-
view the award of prejudgment interest for abuse of discre-
tion, “basing the award on clearly erroneous factual
findings, legal error, or a manifest error of judgment.” King
Instruments Corp. v. Perego, 65 F.3d 941, 952 (Fed.
Cir. 1995).
B. The District Court Did Not Abuse Its Discretion in
Awarding Prejudgment Interest
The District Court granted Ms. Schwendimann pre-
judgment interest at a rate of 10 percent per year. J.A. 91.
Arkwright contends the District Court abused its discre-
tion in awarding prejudgment interest on the entire dam-
ages from the first infringement date. Appellant’s Br. 60.
We disagree with Arkwright.
The District Court did not abuse its discretion in grant-
ing a prejudgment interest rate of 10 percent, starting from
the first date of infringement. Typically, “prejudgment in-
terest should be awarded from the date of [the] infringe-
ment to the date of [the] judgment.” Nickson Indus., Inc.
v. Rol Mfg. Co., 847 F.2d 795, 800 (Fed. Cir. 1988). Where
a jury awards a lump-sum amount as compensation for
Case: 18-2416 Document: 60-2 Page: 19 Filed: 05/05/2020
SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING 19
infringement, the prejudgment interest is properly applied
to the entire amount beginning on the first date of the in-
fringement. See Comcast IP Holdings I LLC v. Spring
Commc’ns Co., L.P., 850 F.3d 1302, 1315 (Fed. Cir. 2017)
(affirming the “district court’s assessment of prejudgment
interest against [an infringer] based on the entire royalty
award” where the jury awarded a lump-sum amount). The
District Court did not abuse its discretion by awarding pre-
judgment interest in the amount of 10 percent, pursuant to
the rate set by § 549.09 of the Minnesota Statutes. See Gy-
romat Corp., 735 F.2d at 556 (upholding the award of a pre-
judgment interest rate set at the state statutory rate as
within the district court’s discretion); see also Oiness v.
Walgreen Co., 88 F.3d 1025, 1028, 1033 (Fed. Cir. 1996)
(upholding the application of a state statutory prejudgment
interest rate of 8 percent, while remanding the prejudg-
ment interest award on other grounds); Railroad Dynam-
ics, Inc. v. A. Stucki Co., 727 F.2d 1506, 1520 (Fed.
Cir. 1984) (upholding the district court’s selection of a 6
percent prejudgment interest rate, “[t]hough the [district]
court could have selected a higher interest rate”). Accord-
ingly, the District Court did not abuse its discretion in its
award of prejudgment interest.
CONCLUSION
We have considered the parties’ other arguments and
each of the remaining issues raised on appeal and find
them to be without merit. Accordingly, the Judgment of
the U.S. District Court for the District of Minnesota is
AFFIRMED
Case: 18-2416 Document: 60-2 Page: 20 Filed: 05/05/2020
United States Court of Appeals
for the Federal Circuit
______________________
JODI A. SCHWENDIMANN, FKA JODI A. DALVEY,
Plaintiff/Counterclaim Defendant-Cross-Appellant
COOLER CONCEPTS, INC.,
Counterclaim Defendant-Cross-Appellant
v.
ARKWRIGHT ADVANCED COATING, INC.,
Defendant/Counterclaimant-Appellant
______________________
2018-2416, 2019-1012
______________________
Appeals from the United States District Court for the
District of Minnesota in No. 0:11-cv-00820-JRT-HB, Judge
John R. Tunheim.
______________________
REYNA, Circuit Judge, dissenting.
Our jurisprudence on standing is clear. A plaintiff
must have Article III standing at the time it filed suit.
Post-suit activities cannot confer Article III standing that
was otherwise lacking when the suit was filed. The clarity
of this principle is welcome, for litigants require clear no-
tice of how to satisfy the constitutional threshold of stand-
ing. The majority obscures the principle, however, by
blessing the district court’s post-suit cure of Ms. Schwend-
imnn’s lack of constitutional standing at the time she filed
her complaint. I dissent.
Case: 18-2416 Document: 60-2 Page: 21 Filed: 05/05/2020
2 SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING
I
As an initial matter, and contrary to the majority’s
opinion, the crux of the jurisdictional issue on appeal is not
merely statutory—i.e., whether Ms. Schwendimann can be
classified as a “patentee” with “all substantial rights” in the
patent under 35 U.S.C. § 281. The issue is constitutional—
i.e., whether Ms. Schwendimann had any requisite “exclu-
sionary rights” in the patents-in-suit at the time of filing
her infringement suit to establish Article III standing. See
Maj. Op. at 9–10; see also Lone Star Silicon Innovations
LLC v. Nanya Tech. Corp., 925 F.3d 1225, 1234–35 (Fed.
Cir. 2019). 1 If a party has no Article III standing, the
1 The majority asserts that the dissent requires the
Patent Act’s prerequisites to be jurisdictional require-
ments, which allegedly conflicts with Lone Star. See Maj.
Op. at 10. This is incorrect. The majority misreads both
the dissent’s position and Lone Star. The dissent does not
propose that the Patent Act’s prerequisites are jurisdic-
tional. Rather, the dissent is faithful to well-established
law that Article III standing is a separate and overriding
requirement from statutory standing. See Raines v. Byrd,
521 U.S. 811, 820 n.3 (1997) (noting the “settled” principle
that “Congress cannot erase Article III’s standing require-
ments by statutorily granting the right to sue to a plaintiff
who would not otherwise have standing”); Gladstone Real-
tors v. Village of Bellwood, 441 U.S. 91, 100 (1979) (recog-
nizing that although “Congress may, by legislation, expand
standing to the full extent permitted by Art. III,” “[i]n no
event . . . may Congress abrogate the Art. III minima”); see
also Phigenix, Inc. v. Immunogen, Inc., 845 F.3d 1168, 1175
(Fed. Cir. 2017) (holding that a petitioner for inter partes
review before the Patent Trial and Appeal Board lacked Ar-
ticle III standing before this court, notwithstanding the pe-
titioner’s statutory right to appeal under 35 U.S.C. § 319).
Case: 18-2416 Document: 60-2 Page: 22 Filed: 05/05/2020
SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING 3
standing inquiry ends and the case must be dismissed.
Lone Star does not hold otherwise. Rather, Lone Star clar-
ified that a party that fails to satisfy the statutory standing
requirements under the Patent Act— i.e., “all substantial
rights” in the patent—may nonetheless meet the baseline
constitutional standing threshold, so long as the party
holds some exclusionary rights in the patent. 925 F.3d at
1234–35.
The facts in this case highlight the constitutional
standing issue. On April 1, 2011, when Ms. Schwend-
imann filed her infringement suit, she alleged that she
owned the patents-in-suit. She did not. Ms. Schwend-
imann argued that she became the owner when she was
assigned the ’845 application, from which these patents is-
sued, via the “Hand-Altered Copy” assignment. Ms.
Schwendimann never asserted, before the district court or
on appeal, that she had any exclusionary rights in the pa-
tents-in-suit at the time of filing separate and apart from
the Hand-Altered Copy.
Below, the district court determined that under Minne-
sota state law, the Hand-Altered Copy only assigned rights
to Ms. Schwendimann in the ’983 application, not the ’845
application. J.A. 13. 2 At this point, the district court
should have dismissed Ms. Schwendimann’s complaint for
lack of Article III standing because on April 1, 2011, the
day the underlying suit was filed, Ms. Schwendimann had
no enforceable, exclusionary rights in the patents-in-suit.
2 Contrary to the majority’s assertion, the dissent
does not suggest that the Hand-Altered Copy be inter-
preted under federal law. See Maj. Op. at 16. As noted
above, the district court interpreted the Hand-Altered
Copy under Minnesota state law as unambiguously assign-
ing only the ’983 application. No party disputes this deter-
mination on appeal, and, thus, this interpretation stands.
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4 SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING
The district court, however, reformed the Hand-Altered
Copy in order to retroactively grant Ms. Schwendimann en-
forceable, exclusionary rights in the ’845 application effec-
tive at the time of filing. Whether post-suit reformation
can be an exception to the fundamental Article III require-
ment that standing be present at the time of filing is a ques-
tion of constitutional standing and is an issue of first
impression. Thus, contrary to the majority’s reasoning, we
cannot bypass this constitutional standing issue. See
AsymmetRx, Inc. v. Biocare Medical, LLC, 582 F.3d 1314,
1318 (Fed. Cir. 2009).
II
“Whether a party has standing to sue in federal court
is a question of federal law.” Paradise Creations, Inc. v. UV
Sales, Inc., 315 F.3d 1304, 1308 (Fed. Cir. 2003). Article
III standing, like other bases of jurisdiction, must be pre-
sent at the inception of the lawsuit. Lujan v. Defenders of
Wildlife, 504 U.S. 555, 570 n.5 (1992) (plurality opinion)
(“[S]tanding is to be determined as of the commencement
of suit.”); see also Keene Corp. v. United States, 508 U.S.
200, 207 (1993) (“[T]he jurisdiction of the Court depends
upon the state of things at the time of the action brought.”).
Based upon this Supreme Court jurisprudence, we have
held that “in a patent infringement action, the plaintiff
must demonstrate that it held enforceable title to the pa-
tent at the inception of the lawsuit to assert standing.”
Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359,
1364 (Fed. Cir. 2010) (internal quotation marks omitted).
In other words, the plaintiff is required to have at least
some enforceable, exclusionary rights “to the patents on
the day it filed the complaint and that requirement can
not be met retroactively.” Id. at 1366 (emphasis added).
“[I]f the original plaintiff lacked Article III initial standing,
the suit must be dismissed, and the jurisdictional defect
cannot be cured after the inception of the lawsuit.”
Id. at 1364 (internal quotation marks omitted) (emphasis
Case: 18-2416 Document: 60-2 Page: 24 Filed: 05/05/2020
SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING 5
added). We have consistently enforced the requirement
that standing be present at the time of filing, even in the
face of subsequent legal events that purport to have retro-
active effect.
For example, plaintiffs who lacked a written assign-
ment at the time filing cannot rely on post-suit assign-
ments to fix a lack of standing at the time of filing. See
Enzo APA & Son, Inc. v. Geapag A.G., 134 F.3d 1090, 1093
(Fed. Cir. 1998) (“[N]unc pro tunc assignments are not suf-
ficient to confer retroactive standing.”); see also Alps
South, LLC v. Ohio Willow Wood Co., 787 F.3d 1379, 1384–
86 (Fed. Cir. 2015); Abraxis Biosecience, 625 F.3d at 1367;
Gaia Techs., Inc. v. Reconversion Techs. Inc., 93 F.3d 774,
779–80 (Fed. Cir. 1996).
Likewise, we have rejected a plaintiff’s attempt to ret-
roactively revive an unenforceable license agreement in or-
der to fix a lack of Article III standing. Paradise Creations,
315 F.3d at 1310. In Paradise, the plaintiff was a Florida
corporation that entered into a license agreement while ad-
ministratively dissolved under Florida state law, which un-
disputedly rendered its license agreement unenforceable.
Id. at 1308, 1310. After suing for patent infringement in
federal district court, the appellant was reinstated as a cor-
poration under Florida state law. Id. at 1306. Appellant
argued that it had enforceable patent rights at the time of
filing due to the Florida corporate revival statute, which
provided that the reinstatement “relates back to and takes
effect as of the effective date of the administrative dissolu-
tion and the corporation resumes carrying on its business
as if the administrative dissolution had never occurred.”
Id. at 1309. In other words, appellant argued that due to
the Florida revival statute, its license agreement was al-
ways valid, and, thus, it possessed enforceable rights at the
time of filing. We rejected this theory, noting that “at the
time the appellant filed its suit,” the appellant
Case: 18-2416 Document: 60-2 Page: 25 Filed: 05/05/2020
6 SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING
undisputedly “did not have enforceable rights to the pa-
tent,” and, thus, “did not have standing to assert federal
jurisdiction.” Id. at 1310. We explained that the appellant
cannot rely on the Florida corporate revival statute “to ret-
roactively claim enforceable patent rights on the day it filed
its complaint, in order to assert standing.” Id.
I see no reasoned difference between Ms. Schwend-
imann’s reliance on post-suit reformation in this case and
the plaintiffs’ reliance on nunc pro tunc agreements or the
Florida revival statute in the above cases. Here too, Ms.
Schwendimann filed suit without an enforceable, written
assignment as to the patents-in-suit and is attempting to
rely on post-suit activity to retroactively fix her defective
assignment in order to confer standing. Remarkably, the
district court in this case determined that the Hand-Al-
tered Copy was unenforceable as to the ’845 application at
the time of filing. Thus, consistent with our precedent, Ms.
Schwendimann cannot rely on the post-suit reformation to
retroactively fix a standing defect.
To hold otherwise implicates the practical concerns we
announced in Gaia. There, we rejected a plaintiff’s attempt
to fix a standing defect through a nunc pro tunc assignment
and explained that:
parties should possess rights before seeking to
have them vindicated in court. Allowing a subse-
quent [legal event] to automatically cure a stand-
ing defect would unjustifiably expand the number
of people who are statutorily authorized to
sue. . . . Permitting non-owners and licensees the
right to sue, so long as they eventually obtain the
rights they seek to have redressed, would enmesh
the judiciary in abstract disputes, risk multiple lit-
igation, and provide incentives for parties to obtain
assignments in order to expand their arsenal and
the scope of litigation. Inevitably, delay and ex-
pense would be the order of the day.
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SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING 7
Gaia Techs., 93 F.3d at 780.
Like in Gaia, the majority’s holding risks delay and
multiple litigation. For example, until a plaintiff with a
defective assignment obtains a reformation, which could
take years, 3 the assignor can file a separate suit, assert
that it was the true assignee, and subject the defendant-
infringer to multiple infringement suits for the same pa-
tent. The defendant-infringer would have to defend itself
in both suits, not knowing which party actually owned the
patents. Additionally, the assignor, unbeknownst to the
plaintiff, could have assigned the patent in writing to a
third party, who in turn sues the defendant-infringer in a
separate suit. For defending small businesses, whose core
technology is at issue, the cost and uncertainty of multiple
litigations can be devastating. Therefore, as Gaia teaches,
plaintiffs should bear the cost of shoring up their patent
rights before filing suit to prevent such undue delay and
expense. 4
3 In this case, the Hand-Altered Copy was reformed
in August 2012, one year and five months after Ms.
Schwendimann filed suit.
4 The majority’s position would also procedurally
burden defendants. In order to ascertain with certainty
whether a plaintiff had the right to sue in the first place, a
defendant will have to engage in costly discovery and liti-
gation regarding the fact-intensive state law issue of refor-
mation—which focuses on facts and circumstances not in
the defendant’s possession. In this case, the defendant had
to endure two rounds of briefing and discovery before the
district court was prepared to rule on the issue of refor-
mation. This was an undue and unjustified burden for de-
fendant to bear. Instead, Ms. Schwendimann should have
ironed out her patent rights with ACT, the assignor, before
filing suit.
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8 SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING
The majority’s holding also implicates the same feder-
alism concerns we raised in Abraxis. There, we held that
plaintiffs could not fix a lack of standing by relying on a
post-suit nunc pro tunc provision in an assignment, which
under New York law would have retroactively conferred ti-
tle pre-suit. 625 F.3d at 1367. The concurrence in denial
of rehearing en banc explained that “[t]he district court,
purportedly acting under New York state law, allowed the
parties’ intent to trump the clear language of the agree-
ments [in existence at the time of filing]. State law can-
not retroactively override federal law to revive failed
agreements, thereby conferring standing in federal
court.” Abraxis Bioscience, Inc. v. Navinta LLC, 672 F.3d
1239, 1241 (Fed. Cir. 2011) (Gajarsa, J., concurring in de-
nial of reh’g en banc) (emphasis added). The concurrence
thus rejected the district court’s position, which would “ap-
ply state law to effectively preempt federal law.” Id. at
1240–41.
Here, federal law requires a patent assignment to be in
writing. See 35 U.S.C. § 261. As previously noted, for con-
stitutional standing purposes, Ms. Schwendimann must
have had an enforceable, written assignment of the ’845
application at the time of filing her suit. See Lone Star, 925
F.3d at 1234. Yet, no party disputes that Ms. Schwend-
imann had no enforceable, written assignment for the ’845
application at the time of filing. That ACT, the assignor of
the ’845 application, and Ms. Schwendimann may have
orally agreed that she be the assignee pre-suit is not a suf-
ficient jurisdictional hook under federal law. If it were,
Section 261’s writing requirement would be rendered
meaningless. Thus, like the district court in Abraxis, the
majority improperly permits state law (Minnesota state
contract law) to retroactively override federal law (Section
261) in order to confer standing in federal court. See
Abraxis, 672 F.3d at 1241.
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SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING 9
Lastly, the majority’s reliance on Tri-Star Elecs. Int’l.,
Inc. v. Preci-Dip Durtal SA, 619 F.3d 1364 (Fed. Cir. 2010)
and Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245 (Fed. Cir.
2000) is misplaced. In those cases, the district court did
not rely on any post-suit activity to retroactively alter a de-
fective assignment. Instead, the district court discerned
from the four corners of the assignment that the plaintiff
was the assignee of the patents-in-suit, despite a clerical
error within the document, Speedplay, 211 F.3d at 1250–
51, or based on the use of the term “successor,” Tri-Star,
619 F.3d at 1367. Thus, in both cases, the district court
held that based on the assignment as written at the time
of filing, the plaintiffs had rights in the patents, and, thus
standing. That did not occur here. The district court in
this case determined under Minnesota state law that as
written at the time of filing, the Hand-Altered Copy unam-
biguously assigned to Ms. Schwendimann the ’983 applica-
tion, not the ’845 application, and could not be interpreted
otherwise.
The majority’s precedential decision will create uncer-
tainty for litigants and courts. Until this case, this court
has safeguarded the rule that plaintiffs must have formal,
exclusionary rights at the time of filing regardless of state
law doctrines that retroactively confer rights. See, e.g.,
Alps South, 787 F.3d at 1384–86; Abraxis Bioscience, 672
F.3d at 1241; Abraxis Bioscience, 625 F.3d at 1366; Para-
dise Creations, 315 F.3d at 1310; Enzo APA & Son, 134
F.3d at 1093–94; Gaia Techs., 93 F.3d at 780. That rule is
now obscure. Even more, the newly created exception for
the retroactive state law remedy of reformation opens the
door for similar exceptions for other retroactive state law
doctrines.
Equally unfortunate is that the district court’s stand-
ing determination “has resulted in a substantial waste of
judicial and litigant resources.” Jim Arnold Corp. v. Hydro-
tech Sys., Inc., 109 F.3d 1567, 1578 (Fed. Cir. 1997). “The
Case: 18-2416 Document: 60-2 Page: 29 Filed: 05/05/2020
10 SCHWENDIMANN v. ARKWRIGHT ADVANCED COATING
remedy for that, however, is not an equally unfounded as-
sumption of jurisdiction.” Id. at 1579. Instead, upon dis-
covery of her standing defect, Ms. Schwendimann should
have sought dismissal of the suit without prejudice and
then either obtained a written assignment from ACT or
sought reformation of the Hand-Altered Copy in state
court. Then, having secured exclusionary rights in the ’845
application, Ms. Schwendimann could have refiled suit in
federal court. If there needs to be a cure in this case, that
is it: dismiss and refile.
For these reasons, I dissent.