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Sgromo v. Imperial Toy LLC

United States District Court, E.D. Texas, Marshall Division

September 13, 2019

PIETRO PASQUALE ANTONI SGROMO, Plaintiff,
v.
IMPERIAL TOY LLC and HEB GROCERY COMPANY, LP, Defendants.

          MEMORANDUM ORDER

          ROY S. PAYNE UNITED STATES MAGISTRATE JUDGE.

         Before the Court are (1) Defendant Imperial Toy LLC's (“Imperial”) Motion to Dismiss (Dkt. No. 24); and (2) Plaintiff Pietro Pasquale Antoni Sgromo's (“Sgromo”) Motion for Temporary Injunction (Dkt. No. 18). After consideration, the Court grants Imperial's Motion to Dismiss. The Court concludes that Plaintiff lacks standing to assert claims of patent infringement against Imperial. Accordingly, Plaintiff's patent infringement claims against Imperial are dismissed with prejudice. The Court concludes that it lacks subject matter jurisdiction over the state law claims against Imperial, so those claims are dismissed without prejudice. Because Defendant HEB Grocery Company, LP has not appeared in the case, and there is no evidence in the record that Plaintiff has served process on HEB, all claims against it are dismissed without prejudice under Rule 4(m). The Court also denies Plaintiff's Motion for Temporary Injunction.

         In the First Amended Complaint (Dkt. No. 16), Sgromo asserts various claims against Imperial:

• Count I -infringement of U.S. Patent No. 8, 654, 422 (“'422 Patent”); (Id. at 4-5)
• Count II -infringement of U.S. Patent No. 9, 069, 243 (“'243 Patent”); (Id. at 5-6)
• Count III - violation of the Texas Uniform Trade Secrets Act; (Id. at 6-7)
• Count IV - tortious interference; (Id. at 7)
• Count V - unfair competition; (Id. at 8)
• Count VI - unjust enrichment; (Id. at 9)

         The Court will first address Counts I and II together. Then, the Court will address the state law claims that are asserted in Counts III through VI. Lastly, the Court will address the Motion for Temporary Injunction.

         I. Plaintiff lacks standing for his Count I and Count II claims of patent infringement.

         A party invoking federal jurisdiction bears the burden of showing that it has standing to sue. Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992). “[S]tanding is to be determined as of the commencement of suit.” Id. at 571 n.5. “[I]n order to assert standing for patent infringement, the plaintiff must demonstrate that it held enforceable title to the patent at the inception of the lawsuit.” Paradise Creations, Inc. v. UV Sales, Inc., 315 F.3d 1304, 1309 (Fed. Cir. 2003) (emphasis in original) (citing Lans v. Digital Equip. Corp., 252 F.3d 1320, 1328 (Fed. Cir. 2001) (holding that the appellant did not have standing, because he had already assigned title to the patent at the inception of the lawsuit); Enzo APA & Son, Inc. v. Geapag A.G., 134 F.3d 1090, 1092 (Fed. Cir. 1998) (holding that a licensee lacked standing where there was no written transfer of rights under the patent at the time the infringement claims were brought and stating that, “[a]s a general matter, parties should possess rights before seeking to have them vindicated in court”); Jim Arnold Corp. v. Hydrotech Sys., Inc., 109 F.3d 1567, 1572 (Fed. Cir. 1997) (holding that an assignor lacked standing, because it had not succeeded in rescinding or canceling its assignment in state court at the time it filed its complaint in federal court); Gaia Techs., Inc. v. Reconversion Techs., Inc., 93 F.3d 774, 778 (Fed. Cir. 1996) (holding that the plaintiff's patent and trademark infringement claims were required to be dismissed for lack of standing, because of its “inability to prove that it was the owner of the Intellectual Property at the time the suit was filed”), as amended on rehearing on different grounds, 104 F.3d 1296 (Fed. Cir. 1996))).

         The Federal Circuit's opinion in Jim Arnold is particularly instructive. In that case, the Federal Circuit held that:

To invoke the jurisdiction of a federal court under § 1338, it is necessary that plaintiff allege facts that demonstrate that he, and not the defendant, owns the patent rights on which the infringement suit is premised. Furthermore, this allegation of ownership must have a plausible foundation. Federal jurisdiction cannot lie based on allegations that are frivolous or insubstantial. See Cervantez v. Bexar County Civil Service Comm'n, 99 F.3d 730, 733 (5th Cir. 1996). Thus, if plaintiff cannot in good faith allege such facts because, absent judicial intervention to change the situation, under the terms of a ...

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