One of my most read posts is “What Nunc Pro Tunc Means.” It means “now for then” in Latin, which is hardly much help. Extensive Google research tells me that it’s used to correct judicial orders, but that’s not what brings readers to my blog. In the IP field we typically use “nunc pro tunc” in the context of an assignment of a patent, trademark or copyright. The nunc pro tunc assignment becomes the subject matter for a blog post when someone back-dates an assignment to try to cure a standing defect. That is, Plaintiff P sues for infringement of a patent it thought it owned. Smart Defendant D realizes Plaintiff P doesn’t own it because of some defect in the chain of title, so Plaintiff P responds by getting the true owner to sign a “nunc pro tunc” assignment, back-dating the assignment to a date before the lawsuit was filed. Pro tip—it doesn’t work. As quoted in my earlier post, “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 litigation, and provide incentives for parties to obtain assignment in order to expand their arsenal and the scope of litigation. Inevitably, delay and expense would be the order of the day.”
In re CTP Innovations is the next permutation of the effort. The case is a consolidated multi-district action combining various lawsuits brought by “non-practicing patent assertion entity” CTP Innovations, hence the unusual caption for an adversarial dispute. That is the court’s description of the plaintiff; consider whether that affected the court’s reasoning.
The court helpfully puts the chain of title in a chart for us:
|9/21/1999||Inventors assign patent rights to Banta Corporation (“Banta”)||Banta Corporation|
|In 2007||R.R. Donnelley acquires Banta (not its assets)||Banta Corporation|
|2007-2013||Banta operates as a subsidiary of R.R. Donnelley||Banta Corporation|
|2/12/2013||R.R. Donnelley (not Banta) executes assignment of rights to Media Innovations, LLC||Banta Corporation|
|3/5/2013||Media executes assignment of rights to CTP Innovations, LLC||Banta Corporation|
|5/24/2013||Banta executes assignment of rights to R.R. Donnelley nunc pro tunc to 1/3/2013||R.R. Donnelley & Sons Company|
|6/14/2013||CTP files first of suits at issue||R.R. Donnelley & Sons Company|
What we have then is a nunc pro tunc assignment that was executed before the lawsuit was filed. Ok, no problem there. But the question becomes whether that nunc pro tunc assignment also cured the defect down the chain, the assignment from Media Innovations to CTP Innovations. The court holds it does not:
CTP contends that Banta’s May 24, 2013 execution of a nunc pro tunc assignment of the rights to the Patents in Suit to R.R. Donnelley was effective to retroactively close the gaps in the chain of title between R.R. Donnelley and Media and between Media and CTP. Certainly, contracting parties may agree to give retroactive effect to their agreements as between themselves. However, a nunc pro tunc agreement cannot be used to rewrite history so as to retroactively provide standing to sue for patent infringement. “[N]unc pro tunc assignments are not sufficient to confer retroactive standing.” Enzo APA & Son, Inc. v. Geapag A.G., 134 F.3d 1090, 1093 (Fed. Cir. 1998). “As a general matter, parties should possess rights before seeking to have them vindicated in court.” Id.
Certainly, Banta had the ability to, and did, transfer the rights to the Patents in Suit to R.R. Donnelley on May 24, 2013. R.R. Donnelley then had the ability immediately to transfer those rights to CTP. Had R.R. Donnelley done so, CTP would have owned the rights prior to filing the instant lawsuits. Alternatively, on May 24, 2013, Banta could have transferred the patent rights to Media, and Media immediately could have assigned those rights to CTP and provide CTP standing to file the instant law suits. And, most simply, on May 24, 2013, Banta (then owning the patent rights) could have assigned the rights directly to CTP. However, Banta took none of these courses of action. Rather, Banta sought to retroactively provide CTP with the patent rights by means of a nunc pro tunc assignment of the rights to R.R. Donnelley.
What I find helpful in the court’s explanation of nunc pro tunc is the concept that “contracting parties may agree to give retroactive effect to their agreements as between themselves [but a] nunc pro tunc agreement cannot be used to rewrite history.” A nunc pro tunc is a legal fiction between two parties, and enforceable between them, but that doesn’t mean anyone else is bound by the parties’ legal fiction.
That said, I’m not convinced that the court has this one right. The court relied on Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359, 1364 (Fed. Cir. 2010) (blogged here), a troubling decision (for me, anyway) that relied on a fine language distinction in deciding the effective date of an assignment. The CTP Innovations court acknowledged Abraxis was only “analogous” to the situation here. It had a similar fact pattern and outcome, but answered a different legal question.
I’m not a big fan of “gotchas” in litigation. Of course the plaintiff must own the rights allegedly infringed, but the court didn’t give any rationale for essentially voiding an agreement that all the relevant parties (that is, those who owned, or thought they owned, the patent) appear to agree was the desired state of affairs. It was also all said and done before a single lawsuit was filed and, but for the court’s disregard for the private parties’ clear intent, any standing problem was cured before any of the lawsuits were file. The court pointed out the problem could have been fixed in any number of ways, except apparently the one way the patent owners elected to use. A single nunc pro tunc assignment makes sense to me; the court’s suggested alternatives were all more complicated, requiring two transactions instead of one, or else creating a different chain of title altogether.
I suspect this one’s not over.
In re CTP Innovations, LLC, MDL No. 14-MD-2581, (D. Md. Nov. 30, 2016).
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