United States Court of Appeals
for the Federal Circuit
__________________________
ABRAXIS BIOSCIENCE, INC.,
Plaintiff-Appellee,
v.
NAVINTA LLC,
Defendant-Appellant.
__________________________
2009-1539
__________________________
Appeal from the United States District Court for the
District of New Jersey in case no. 07-CV-1251, Judge Joel
A. Pisano.
ON PETITION FOR PANEL REHEARING AND
REHEARING EN BANC
__________________________
Before RADER, Chief Judge, NEWMAN, LOURIE, BRYSON,
GAJARSA, LINN, DYK, PROST, MOORE, and O’MALLEY,
Circuit Judges.
PER CURIAM.
GAJARSA, Circuit Judge, with whom LINN and DYK,
Circuit Judges, join, concurs in the denial of the petition
for rehearing en banc.
O’MALLEY, Circuit Judge, with whom NEWMAN, Circuit
Judge, joins, dissents from the denial of the petition for
rehearing en banc.
ABRAXIS BIOSCIENCE v. NAVINTA LLC 2
__________________________
RICHARD DE BODO, DLA Piper LLP (US), of Los Ange-
les, California, filed a combined petition for panel rehear-
ing and rehearing en banc for plaintiff-appellee. With
him on the petition was SIEGMUND Y. GUTMAN.
MEREDITH MARTIN ADDY, Brinks Hofer Gilson &
Lione, of Chicago, Illinois, filed a response to the petition
for defendant-appellant. With her on the response were
MARK H. REMUS, LAURA A. LYDIGSEN, and LUKE A.
PARSONS.
__________________________
ORDER
A combined petition for panel rehearing and rehear-
ing en banc was filed by Plaintiff-Appellee, and a response
thereto was invited by the court and filed by Defendant-
Appellant.
The petition for panel rehearing was referred to the
panel that heard the appeal, and thereafter the petition
for rehearing en banc and response were referred to the
circuit judges who are authorized to request a poll
whether to rehear the appeal en banc. A poll was re-
quested, taken, and failed.
Upon consideration thereof,
IT IS ORDERED THAT:
(1) The Plaintiff-Appellee’s petition for panel rehear-
ing is denied.
(2) The Plaintiff-Appellee’s petition for rehearing en
banc is denied.
(3) The mandate of the court will issue on March 21,
2011.
3 ABRAXIS BIOSCIENCE v. NAVINTA LLC
FOR THE COURT
March 14, 2011 /s/ Jan Horbaly
Date Jan Horbaly
Clerk
United States Court of Appeals
for the Federal Circuit
__________________________
ABRAXIS BIOSCIENCE, INC.,
Plaintiff-Appellee,
v.
NAVINTA LLC,
Defendant-Appellant.
__________________________
2009-1539
__________________________
Appeal from the United States District Court for the
District of New Jersey in Case No. 07-CV-1251, Judge
Joel A. Pisano.
GAJARSA, Circuit Judge, with whom LINN and DYK,
Circuit Judges, join, concurring in the denial of the peti-
tion for rehearing en banc.
__________________________
I concur in this court’s decision not to rehear this case
en banc because this is not an issue that rises to the level
of importance of en banc hearing by this court. Contrary
to the dissent, the majority opinion here does not create a
federal common law that broadly displaces state law in
the area of patent assignments.
On April 26, 2006, AstraZeneca (“AZ-UK”) and
Abraxis entered into an Asset Purchase Agreement. The
agreement provided that AZ-UK “shall cause” the transfer
of the three asserted patents to Abraxis. However, at that
ABRAXIS BIOSCIENCE v. NAVINTA LLC 2
time, those patents were owned by Astra Läkemedel
Aktiebolag (“Astra L”) and AstraZeneca AB (“AZ-AB”), not
AZ-UK. On June 28, 2006, AZ-UK attempted to assign
the patents to Abraxis, but failed because AZ-UK could
not assign what it did not own. On March 15, 2007,
Abraxis sued Navinta LLC for patent infringement. On
the same day, AZ-AB and Astra L assigned the patents-
at-issue to AZ-UK, but not to Abraxis. Subsequently, on
November 12, 2007, AZ-UK finally assigned the three
patents to Abraxis.
The analysis is simple. The panel, following Federal
Circuit law, concluded that a party has no standing under
Article III to bring an action if it does not own the patents
when it files the action. 35 U.S.C. § 261 requires assign-
ments to be in writing. In this case, Abraxis did not
possess a written assignment of the patents-in-suit from
the owner thereof at the time suit was filed.
The position advocated by the dissent would apply
state law to effectively preempt federal law. When Con-
gress has adopted a statutory scheme to apply in a par-
ticular field, federal law preempts state law. See, e.g.,
Campbell v. Hussey, 368 U.S. 297 (1961); Rice v. Santa Fe
Elevator Corp., 331 U.S. 218, 230 (1947). The dissent
suggests that New York state law pre-empts federal law.
The position that AZ-UK’s failed assignment to Abraxis
on June 28, 2006 can be resurrected by a later transfer of
the patents to AZ-UK on March 15, 2007 by ostensibly
nunc pro tunc assignments is insufficient to avoid section
261 and the federal law of standing. Notwithstanding
New York law, it is not possible to transfer an interest in
a patent unless one owns the patents at the time of the
transfer. Here, it is clear that AZ-UK did not own the
patents and the intent of the parties cannot correct that
fatal error. The district court, purportedly acting under
New York state law, allowed the parties’ intent to trump
3 ABRAXIS BIOSCIENCE v. NAVINTA LLC
the clear language of the agreements. State law cannot
retroactively override federal law to revive failed agree-
ments, thereby conferring standing in federal court.
The panel majority correctly applied this court’s
precedent and federal law to find that Abraxis lacked
standing and could not correct this deficiency after the
inception of this suit. This case does not conflict with our
precedent or warrant en banc review.
United States Court of Appeals
for the Federal Circuit
__________________________
ABRAXIS BIOSCIENCE, INC.,
Plaintiffs-Appellee,
v.
NAVINTA LLC,
Defendants-Appellant.
__________________________
2009-1539
__________________________
Appeal from the United States District Court for the
District of New Jersey in Case No. 07-CV-1251, Judge
Joel A. Pisano
O’MALLEY, Circuit Judge, with whom NEWMAN, Cir-
cuit Judge, joins, dissenting from the denial of the peti-
tion for rehearing en banc.
__________________________
I respectfully dissent from the court’s denial of Appel-
lee’s Petition for Rehearing En Banc. The panel major-
ity’s creation of federal common law to govern
assignments of existing patents conflicts not only with our
precedent, but with longstanding Supreme Court prece-
dent restricting judicial preemption of state law. The
Supreme Court has “uniformly” proscribed the judicial
creation of “a special federal rule” absent a “significant
conflict” between state law and “some federal policy or
interest.” O’Melveny & Myers v. FDIC, 512 U.S. 79, 87
ABRAXIS BIOSCIENCE v. NAVINTA LLC 2
(1994) (citing Wallis v. Pan Am. Petroleum Corp., 384 U.S.
63, 68 (1966)). Though the panel majority did not identify
such a conflict, by virtue of this decision, this court now
requires the application of Federal Circuit contract law to
transfers of existing patent rights, without regard for the
state law jointly chosen by the contracting parties.
The consequences of this decision are not slight. This
creation of a new body of law to govern transfers of patent
rights – one applicable in this Circuit only – will disrupt
substantial expectations with respect to the ownership of
existing patents and impose unnecessary burdens on
future transfers thereof. Parties may now be barred from
pursuing claims for infringement of patents they indis-
putably own under state law, and choice of law provisions
in large-scale asset purchase agreements such as that at
issue here will become meaningless where patents are
involved.
Because this decision conflicts with Supreme Court
precedent and needlessly destabilizes parties’ expecta-
tions, we should take the opportunity to correct this
flawed precedent.
I.
Though this case was nominally about Article III
standing, that inquiry turned entirely on the question of
who owned the asserted patents when suit was filed. The
standing question, and Abraxis’s right to pursue its
claims, was dependent upon whether a series of contracts
purporting to transfer the patents were effective to vest
title to those patents in Abraxis before it filed suit. It is
undisputed that the parties intended that the contracts be
governed by New York law. Interpreting the contracts
under New York law, the district court found that a
subset of those agreements, all of which were executed
before filing, did operate to vest title in Abraxis before it
3 ABRAXIS BIOSCIENCE v. NAVINTA LLC
brought suit. The majority did not dispute this finding.
Rather, it ignored New York law when interpreting the
contracts, and chose, instead, to create a new federal
common law rule to assess the validity of patent trans-
fers, relying on dicta in DDB Technologies v. MLB Ad-
vanced Media, 517 F.3d 1284 (Fed. Cir. 2008). Applying
this new law, the majority concluded that Abraxis did not
obtain title until several months after filing suit and,
thus, lacked standing to pursue the three years of litiga-
tion on the merits that followed the District Court’s
standing ruling. As a judicially created federal rule tied
to no conflict between state law and a federal policy,
however, the majority’s new rule is the type of rule re-
jected regularly by the Supreme Court.
The Supreme Court has held consistently that cases
justifying the “judicial creation of a special federal rule”
displacing state law are “few and restricted, limited to
situations where there is a significant conflict between
some federal policy or interest and the use of state law.”
O’Melveny & Myers, 512 U.S. at 87 (citing Wheeldin v.
Wheeler, 373 U.S. 647, 651 (1963)) (internal quotations
omitted). “[F]ederal courts, unlike their state counter-
parts, are courts of limited jurisdiction that have not been
vested with open-ended lawmaking powers.” Northwest
Airlines v. Transp. Workers Union, 451 U.S. 77, 95 (1981).
Accordingly, whether “latent federal power should be
exercised to displace state law is primarily a decision for
Congress.” Wallis, 384 U.S. at 68. 1 Even where, as here,
1The Supreme Court’s decision in Wallis, 384 U.S.
63, is instructive. There, in the context of contracts
transferring interests in federally granted land, rather
than patent, rights, the Court held that state, rather than
federal, law should apply. Reversing a Fifth Circuit
decision applying federal common law to the transfer of
leases obtained under the Mineral Leasing Act of 1920,
the Supreme Court held: “However fitting this approach
ABRAXIS BIOSCIENCE v. NAVINTA LLC 4
“there is related federal legislation in an area,” it “must
be remembered that Congress acts against the back-
ground of the total corpus juris of the states.” Id. (inter-
nal quotations omitted). Accordingly, matters left
unaddressed by a comprehensive statutory scheme “are
presumably left subject to the disposition provided by
state law.” O’Melveny & Myers, 512 U.S. at 86.
This rule applies with no less force when the federal
interest at issue is expressed in the Patent Act or relates
to intellectual property rights granted thereunder. See
Aronson v. Quick Point Pencil Co., 440 U.S. 257 (1979);
Kewanee Oil v. Bicron, 416 U.S. 470 (1974). In Aronson,
the Supreme Court reversed the Eighth Circuit’s deter-
mination that federal law should displace state contract
law where patent rights are at issue. The Supreme Court
explained that “[c]ommercial agreements traditionally are
the domain of state law,” and that state law “is not dis-
placed merely because the contract relate[s] to intellectual
property which may or may not be patentable . . . .” Id. at
262 (citations omitted). “In this as in other fields, the
question of whether federal law pre-empts state law
involves a consideration of whether that law stands as an
obstacle to the accomplishment and execution of the full
may be where a State interposes unreasonable conditions
on assignability [of the federally granted leases], it can
have no force in this instance because Louisiana conced-
edly provides a quite feasible route for transferring any
mineral lease or contracting to do so, namely, by written
instrument.” Wallis, 384 U.S. at 69-70. The mineral
lease rights at issue in Wallis were no less federal in
origin than the patent rights at issue here and, as the
Fifth Circuit noted, the right to assign those leases was
itself a creature of federal statute. The Supreme Court
was unconvinced, however, that the origin of the rights at
issue was sufficient to displace state law governing their
transfer.
5 ABRAXIS BIOSCIENCE v. NAVINTA LLC
purposes and objectives of Congress. If it does not, state
law governs.” Id. at 262 (citations and quotations omit-
ted). The Court then examined whether enforcement of
the contract in that action was inconsistent with the
purposes of the federal patent system, i.e., (1) “to foster
and reward invention”; (2) “to promote[] disclosure of
inventions to stimulate further innovation and to permit
the public to practice the invention once the patent ex-
pires”; and (3) “to assure that ideas in the public domain
remain there for the free use of the public.” Id. (citing
Kewanee Oil Co. v. Bicron Corp., 416 U.S. at 480-81
(1974)). Concluding that it was not, the Court reversed
the Eighth Circuit’s holding that “patent law principles
governed [the parties’] contract,” and endorsed the district
court’s application of state law. Id. at 261, 266.
Thus, we must begin with the proposition that state
law governs the relationship between contracting parties,
even vis-à-vis their ownership of patent rights, where
application of state law does not create a “significant
conflict” with federal policies or interests articulated in a
Congressional Act. 2
2 The field preemption cases cited by the concur-
rence are inapposite. Where Congress legislates in a field
“which States have traditionally occupied,” such as con-
tract law, we must “start with the assumption that the
historic police powers of the States were not to be super-
seded by the Federal Act unless that was the clear and
manifest purpose of Congress.” Rice v. Santa Fe Elevator
Corp., 331 U.S. 218, 230 (1947) (emphasis added). Where,
as here, Congress has not expressly stated such a pur-
pose, it may be inferred under one of two theories. See
California Federal Sav. and Loan Ass’n v. Guerra, 479
U.S. 272, 281 (1987). Under the theory of field preemp-
tion, a “scheme of federal regulation may be so pervasive
as to make reasonable the inference that Congress left no
room for the State to supplement it.” Rice, 331 U.S. at
ABRAXIS BIOSCIENCE v. NAVINTA LLC 6
II.
Consistent with these principles, we have long held
that “legal title to a patent is a question of state law.” See
Enovsys LLC v. Nextel Commc’ns, Inc., 614 F.3d 1333,
1342 (Fed. Cir. 2010); see also Larson v. Correct Craft,
Inc., 569 F.3d 1319, 1327 (Fed. Cir. 2009) (holding that
“questions of patent ownership 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 con-
tract 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.”); Cook
Biotech, Inc. v. Acell, Inc., 460 F.3d 1365, 1373 (Fed. Cir.
2006) (“Assignment of ownership is governed by state law
doctrines.”); Minco Inc. v. Combustion Eng’g, 95 F.3d
1109, 1117 (Fed. Cir. 1996) (“[P]roper construction of . . .
230. Nothing in 35 U.S.C. § 261, nor any other provision
of the Patent Act, however, supports an inference that
Congress had a “clear and manifest purpose” to “com-
pletely displace state regulation” of assignment agree-
ments. Guerra, 479 U.S. at 281. Indeed, by providing
that, subject to the provisions of Title 35, “patents shall
have the attributes of personal property,” § 261 confirms
that Congress intended for state contract law to govern
patent assignments, just as it had always governed trans-
fers of other forms of personal property. 35 U.S.C. § 261.
The only requirement imposed by § 261 is that such
agreements be in writing. Because Congress expressed no
clear intent to completely displace state contract law
when patents are involved, see Aronson, 440 U.S. at 262,
preemption is justified only to the extent that state law
conflicts significantly with the writing requirement, or
some other federal policy or interest. See Guerra, 479
U.S. at 281.
7 ABRAXIS BIOSCIENCE v. NAVINTA LLC
assignment agreements” is “a matter of state contract
law.”); cf. Power Lift, Inc. v. Weatherford Nipple-Up
Systems, Inc., 871 F.2d 1082, 1085 (Fed. Cir. 1989) (“A
license agreement is a contract governed by ordinary
principles of state contract law.”).
Admittedly, our panel decision in DDB Technologies
established a limited exception to this longstanding
precedent for agreements assigning rights to future
inventions where the question is “whether a patent as-
signment clause creates an automatic assignment or
merely an obligation to assign.” 517 F.3d at 1290. Rea-
soning that this question is “intimately bound up with the
question of standing in patent cases,” the majority in
DDB Technologies held that federal law should displace
state contract law when this question arises. Id. Until
this case, however, our decisions following DDB Technolo-
gies have invoked this exception and applied federal law
only to resolve the narrow issue of whether a new inven-
tion covered by an earlier assignment agreement is auto-
matically assigned “by operation of law” “once the
invention comes into being,” id., or whether a further act
is required to effectuate the assignment. See, e.g., Bd. of
Trs. of the Leland Stanford Junior Univ. v. Roche Molecu-
lar Sys., 583 F.3d 832, 841 (Fed. Cir. 2009). This comes
as no surprise, as a close inspection of the decision in
DDB Technologies reveals it was never intended to create
an exception so broad as to encompass agreements assign-
ing existing patents, such as those at issue here.
At issue in DDB Technologies was whether one of the
named inventors of the patents in suit had assigned his
interest in those patents to his employer by virtue of a
clause in his employment agreement granting the em-
ployer rights to any invention arising out of the employ-
ment relationship. If such an assignment had occurred,
Plaintiff DDB Technologies LLC (“DDB”) would have
ABRAXIS BIOSCIENCE v. NAVINTA LLC 8
lacked standing to maintain its suit without joining the
employer as a co-owner of the asserted patents. In sup-
port of its claim that it was the sole owner of the patents,
DDB argued that, “even if the patents in suit were within
the scope of the [inventor’s] employment agreement,” the
employer’s claim of ownership was barred by a number of
defenses. DDB Techs., 517 F.3d at 1289. DDB did not
dispute the district court’s determination that applicable
state law precluded an assignor from asserting those
defenses to rescind a valid assignment. Id. Rather, DDB
argued that, because assignment under the employment
agreement was not “automatic,” there was never a valid
assignment and the defenses therefore remained avail-
able. Id. Consequently, the panel’s initial inquiry was
whether the relevant language in the employment agree-
ment constituted a promise to assign in the future or an
assignment that became automatic upon the issuance of
the patent creating the property right.
In answering this question, the DDB Technologies
panel first acknowledged that “state law governs the
interpretation of contracts generally.” Id. at 1290.
Drawing on our analysis in Speedplay, Inc. v. Bebop, 211
F.3d 1245, 1249 (Fed. Cir. 2000) and Arachnid, Inc. v.
Merit Indus., Inc., 939 F.2d 1574 (Fed. Cir. 1991), how-
ever, the panel noted that, because “the question of
whether a patent assignment clause creates an automatic
assignment or merely an obligation to assign is intimately
bound up with the question of standing in patent cases,”
we “have accordingly treated it as a matter of federal
law.” Id. Standing in isolation, this language may appear
to encompass agreements beyond those assigning inter-
ests in future inventions. The remainder of the para-
graph, however, clarifies that the exception applies only
to agreements involving rights to future inventions:
9 ABRAXIS BIOSCIENCE v. NAVINTA LLC
Applying federal law, we have held that whether
an assignment of patent rights in an agreement
such as the one in this case is automatic, requir-
ing no further act on the part of the assignee, or
merely a promise to assign depends on the con-
tractual language. If the contract expressly grants
rights in future inventions, “no further act [is] re-
quired once an invention [comes] into being,” and
“the transfer of title [occurs] by operation of law.”
FilmTec Corp., 939 F.2d 1568 at 1573 (contract
provided that inventor “agrees to grant and does
hereby grant” all rights in future inventions); see
also Speedplay, 211 F.3d at 1253 (contract pro-
vided that employee's inventions within the scope
of the agreement “shall belong exclusively to [em-
ployer] and [employee] hereby conveys, transfers,
and assigns to [employer] . . . all right, title and
interest in and to Inventions”). Contracts that
merely obligate the inventor to grant rights in the
future, by contrast, “may vest the promisee with
equitable rights in those inventions once made,”
but do not by themselves “vest legal title to pat-
ents on the inventions in the promisee.”
DDB Techs., 517 F.3d at 1289 (emphasis added). Thus,
DDB Technologies did no more than recognize an excep-
tion to our precedent for assignments of rights in future
inventions – an exception it felt was compelled by earlier
case law discussing future inventions. It did not broaden
that exception to include assignments of existing patents,
however. Nor could it have. Had the decision purported
to extend the exception to assignments of existing pat-
ents, any attempted extension would have been dicta
because that case did not involve an agreement assigning
one or more existing patents.
ABRAXIS BIOSCIENCE v. NAVINTA LLC 10
Thus, no matter one’s view of the propriety of the ju-
dicial preemption exercised in DDB Technologies as to
assignments of rights in future inventions, 3 a separate
preemption analysis was required to justify a new rule
extending DDB Technologies to the much broader cate-
gory of assignments of existing patents. See O'Melveny &
Myers, 512 U.S. at 88 (“Not only the permissibility but
also the scope of judicial displacement of state rules turns
upon” the “significant conflict with some federal policy or
interest.”). Had the panel undertaken the necessary
preemption analysis, it would have no doubt understood
that its decision to displace New York law could not stand
in the face of governing Supreme Court precedent.
As discussed above, the majority’s creation of federal
common law would have been proper only if the use of
state law would have posed a “significant conflict” with an
identifiable federal policy or interest. Despite precedent
requiring that such a conflict be “specifically shown,” the
panel majority did not so much as mention a conflict. See
Wallis, 384 U.S. at 68. Indeed, the closest it came to
justifying its rule was when the majority quoted DDB
Technologies for the proposition that, because “the ques-
3 Many have questioned the wisdom of DDB Tech-
nologies, including whether the mere fact that a particu-
lar question of contract interpretation is “intimately
bound up with the question of standing” is sufficient to
justify judicial preemption of state law. See, e.g., Ian N.
Feinberg, et al., Consequences of the Federal Circuit’s New
Reliance on Federal Common Law to Interpret Patent
Assignment Agreements, LANDSLIDE, Jan./Feb. 2011, at
45. Though it may be that DDB Technologies should be
reconsidered because it too displaces state law without
seeming to identify a sufficiently significant conflict with
federal interests as a precondition to doing so, I do not
now address the wisdom of DDB Technologies, only the
unwarranted extension of its principles to existing patent
rights.
11 ABRAXIS BIOSCIENCE v. NAVINTA LLC
tion of whether a patent assignment clause creates an
automatic assignment or merely an obligation to assign is
intimately bound up with the question of standing in
patent cases,” we “have accordingly treated it as a matter
of federal law.” While there is surely a relationship
between property rights – and their ownership – and
standing, that does not give rise to a significant conflict
with federal patent policy.
The fact that the result of both the ownership and
standing inquiries may change based on which law is
applied cannot possibly be enough to justify creation of a
federal common law governing all patent assignments; if
uniformity in the outcome of standing determinations
were sufficient justification for preemption, “we would be
awash in federal common-law rules.” See O'Melveny &
Myers, 512 U.S. at 88. Just as standing turns on
“whether a patent assignment clause creates an auto-
matic assignment or merely an obligation to assign,” it
also turns on the effect of a divorce decree on an ex-
spouse’s co-ownership interest in a patent, 4 whether a
state court judgment transferring title in a patent may be
nullified for fraud, 5 and the effect of foreign intestacy law
on a plaintiff’s ownership interest in a patent. 6 Like most
legal inquiries bearing on patent ownership, these ques-
tions are “intimately bound up with the question of stand-
4 Enovsys, 614 F.3d at 1336 (holding that, based on
the effect of a divorce decree under California law, a
company had standing to bring suit without joining the
founder’s ex-wife).
5 MyMail, 476 F.3d at 1376 (holding that, as a matter
of Texas law, the state court judgment could not be collat-
erally attacked).
6 Akazawa v. Link New Tech. Int'l, Inc., 520 F.3d
1354, 1358 (Fed. Cir. 2008) (remanding for a determina-
tion on the effect of Japanese intestacy law on the plain-
tiff’s standing to sue).
ABRAXIS BIOSCIENCE v. NAVINTA LLC 12
ing in patent cases.” Yet no one would seriously contend
that this intimate bond justifies the creation of Federal
Circuit common law pertaining to transfers of marital
property, collateral challenges to state court judgments,
or the impact of intestacy on patent ownership. The
requirement that a significant conflict be specifically
shown safeguards against this sort of proliferation of
federal common law, and we should not have allowed the
majority to skirt that restriction here to displace state
contract law. See Aronson, 440 U.S. at 262.
III.
The concurrence appears to argue that this case did
not involve the application of federal contract law, but
was, rather, a simple case of Abraxis lacking a written
assignment of the asserted patents when it filed suit, and
the district court allowing the operation of state law to
retroactively cure defective standing. 7 Had the district
court allowed that to occur, and the panel opinion was
limited to that finding, I would not suggest that we revisit
this case. But that is not what happened. To the con-
trary, before Abraxis filed suit, AZ-UK and its affiliates
executed a series of agreements which, under the district
court’s interpretation of New York law, effectuated a
written assignment sufficient to satisfy the writing re-
quirement and, accordingly, Article III standing. Only by:
(1) confusing the law relating to the retroactive transfer of
title with principles prohibiting retroactive conferral of
standing; and (2) interpreting the parties’ agreements
7 See Concurring Op. at 2-3. (“In this case, Abraxis
did not possess a written assignment of the patents-in-
suit from the owner thereof at the time suit was filed. . . .
State law cannot retroactively override federal law to
revive failed agreements, thereby conferring standing in
federal court.”)
13 ABRAXIS BIOSCIENCE v. NAVINTA LLC
under our doctrine pertaining to future inventions did the
majority reach a different result.
To assess standing, we must apply constitutional con-
cepts to underlying facts. In patent cases, standing turns
on ownership of the patent rights at issue. Speedplay,
211 F.3d at 1249. Where the party filing suit purports to
have obtained those property rights by assignment, we
are to look to state law to assess the effect of that convey-
ance. See Cook Biotech, 460 F.3d at 1373. 35 U.S.C. § 261
requires the fact of a writing, state law defines the legal
effect of any such writing, and standing principles require
that a valid written transfer occur as of the filing of a
complaint in federal court.
This case involved five separate writings, only one of
which was executed after Abraxis filed suit. The first,
executed in April of 2006, was a master Asset Purchase
Agreement (“APA”), pursuant to which AZ-UK was to, “or
was to cause one of its affiliates to,” transfer to Abraxis
“all of the right, title and interest” of AZ-UK and its
Affiliates in certain patents, including those eventually
asserted by Abraxis. Abraxis Bioscience, Inc. v. Navinta
LLC, No. 07-1251, 2009 U.S. Dist. LEXIS 26959, *3
(D.N.J. Mar. 23, 2009). This transfer was to take place at,
and as of, the “effective time,” which, by operation of the
definition in the APA, was June 28, 2006. Id. at *3-4. As
contemplated by the APA, the parties executed an IP
Assignment Agreement (“IPAA”) on June 28, 2006, which
provided that AZ-UK “hereby sells, assigns, conveys and
transfers” to Abraxis all of AZ-UK’s “right, title and
interest in and to,” the patents later asserted by Abraxis,
among other IP rights. Id. at *4. Subsequently, in early
2007, AZ-UK learned that title to the asserted patents
remained with two of its affiliates, and had not been
formally assigned to Abraxis. Consequently, on March,
15, 2007, the affiliates executed additional documents
ABRAXIS BIOSCIENCE v. NAVINTA LLC 14
assigning these patents to AZ-UK. Then, in November of
2007, several months after Abraxis filed suit, AZ-UK
executed an additional document “confirming” that
Abraxis has owned all “right, title, and interest” to the
asserted patents “since no later than June 28, 2006.” Id.
Interpreting the agreements under New York law, the
district court found that they conferred ownership of the
asserted patents to Abraxis as of March 15, 2007, when it
filed suit. Specifically, because the affiliates’ March 15,
2007 assignment documents were “delivered in accor-
dance with” the terms of the APA, they were to be effec-
tive as of June 28, 2006. Given this retroactive effect, the
documents vested title to the asserted patents in AZ-UK
as of June 28, 2006, and the IPAA therefore operated “to
transfer title from AZ-UK to Abraxis as of that date as
well.” Abraxis, 2009 U.S. Dist. LEXIS 26959, at *13.
Accordingly, all of the documents necessary to transfer
title to Abraxis under New York law were actually – not
retroactively – executed as of March 15, 2007, and
Abraxis therefore had standing at the inception of its suit.
The district court essentially found the November 2007
agreement to be a belt-and-suspenders confirmation of
what had already been accomplished under New York law
and, thus, not relevant to the standing analysis.
The panel majority, and now the concurrence, how-
ever, argued that AZ-UK’s assignment to Abraxis on June
28, 2006 was insufficient to satisfy the writing require-
ment of 35 U.S.C. § 261 because “it is not possible to
transfer an interest in a patent unless one owns the
patents at the time of the transfer.” Concurring Op. at 2;
Abraxis, 625 F.3d at 1365 (“AZ-UK had no legal title to
assign, and therefore, lacked standing to commence this
litigation.”). Accordingly, claimed the panel majority,
“[e]ven if given retroactive effect, the March 15, 2007
assignments d[id] not automatically assign the patents to
15 ABRAXIS BIOSCIENCE v. NAVINTA LLC
Abraxis; a subsequent written agreement was necessary.”
Abraxis, 625 F.3d at 1365.
The first problem with this analysis is that it confuses
ownership with standing. While it is true that the March
15, 2007 assignments could not have retroactively con-
ferred standing on AZ-UK had it filed suit on June 28,
2006, that fact is irrelevant because AZ-UK did not at-
tempt to sue on that date – it merely sought to transfer
title to Abraxis by operation of the IPAA. The proper
question was thus whether the March 15, 2007 documents
could operate to retroactively vest title in AZ-UK as of
June 28, 2006 such that the IPAA of the same date could
operate to further transfer title, in writing, to Abraxis. As
I noted earlier, both Supreme Court and our precedent
require that we answer that question according to state
law. Enovsys LLC, 614 F.3d at 1342 (“Who has legal title
to a patent is a question of state law.”); see Aronson, 440
U.S. at 262. Applying New York law, the district court
answered that question affirmatively. Neither 35 U.S.C.
§ 261, nor Article III, imposes additional requirements
prohibiting the type of transaction that occurred here.
The second – and more consequential – problem with
the panel majority’s analysis is that it answered whether
the writings at issue in this case were sufficient to trans-
fer title by reference to federal common law principles of
contract interpretation recognized in DDB Technologies
and other “promise to assign” cases. 8 As I explained
8The concurrence appears to disavow any reliance
by the panel majority on our “promise to assign” cases,
asserting that the panel majority’s decision rested on 35
U.S.C § 261 and Article III standing principles. That the
panel majority relied on those cases is evident from its
response to the panel dissent’s argument that the “prom-
ise to assign” line of cases was irrelevant: “The dissent’s
contention is erroneous. Because the APA is a promise by
ABRAXIS BIOSCIENCE v. NAVINTA LLC 16
earlier, however, those cases recognize a limited exception
to the longstanding rule that state law governs the inter-
pretation of assignment agreements only for assignments
conferring interests in future inventions. Based on an
extension of contract interpretation principles from those
cases, the majority concluded that, even if the “March 15,
2007 agreements were considered to be retroactive, title
to the asserted patents did not automatically vest in
Abraxis upon the March 15, 2007 transfer to AZ-UK
because the June 28, 2006 IP Assignment Agreement did
not result in an immediate transfer of ‘expectant inter-
ests’ to Abraxis.” Abraxis, 625 F.3d at 1359 (citing Roche,
583 F.3d at 841-842). According to this theory, “a subse-
quent written assignment was necessary,” and that
assignment did not occur until November 2007, almost
eight months after Abraxis filed suit. Id. Nothing in New
York law requires the type of “subsequent written as-
signment” the panel majority finds necessary.
Only by injecting a requirement from our “promise to
assign” cases to a transfer of existing patents did the
majority conclude that Abraxis lacked standing when it
filed suit. There can be no doubt, accordingly, that the
precedent created by Abraxis is one which directs the
preemption of state law in connection with the assign-
ment of existing patents, a precedent that simply cannot
be reconciled with governing law.
AZ-UK to assign the relevant patents to Abraxis when
AZ-UK obtains legal title, under our ‘promise to assign’
cases, a subsequent written agreement is necessary to
consummate the assignment.” Abraxis, 625 F.3d at 1365
(citing IpVenture, Inc. v. Prostar Computer, Inc., 503 F.3d
1324, 1327 (Fed. Cir. 2007)).
17 ABRAXIS BIOSCIENCE v. NAVINTA LLC
IV.
In addition to violating fundamental principles of pre-
emption, the majority’s rule unreasonably, and unneces-
sarily, imposes burdens on parties seeking to transfer
patents rights. Patent assignments, like the one in this
case, occur in the context of large scale business transac-
tions where the parties negotiate over, and depend upon,
their choice of law provisions. These provisions allow
parties to anticipate how a court would interpret their
agreement and to draft agreements so that a court’s
interpretation of it most likely will conform to the parties’
intentions. This is precisely what AZ-UK and Abraxis
sought to do by including a New York choice of law provi-
sion in their agreements. The parties’ master agreement,
moreover, contained an effective date provision, a tool
widely used in IP transfer agreements, where the parties
form an agreement in principle, subject to additional due
diligence before finalizing the transfer of rights. It is
undisputed that, under New York law, parties to a writ-
ten transaction may use such provisions to retroactively
make a contract effective as of an earlier date. Finding
that the parties intended to give an earlier effective date
to various agreements transferring the asserted patents,
the district court found that the “relevant documents,
taken as a whole, effectively transferred the rights in the
patent to Abraxis” before it filed suit. 9 Abraxis, 2009 U.S.
Dist. LEXIS 26959, *13. Without any superseding policy
justification, the panel majority ignored the state law
chosen by the parties and made no effort to scrutinize the
Because the majority applied only federal law to
9
the question of ownership, and it is with that decision
that I take issue, I express no opinion as to whether
reasonable minds could differ with the district court’s
application of state law.
ABRAXIS BIOSCIENCE v. NAVINTA LLC 18
parties’ intent or the effectiveness of the agreements
under that law.
By disregarding the express intent of the parties that
New York law apply, the panel’s decision disrupts intel-
lectual property transfers that rest on the expectation
that the law jointly chosen by the parties will apply to
both patent and non-patent assets. 10 As a consequence,
parties may lose standing to bring infringement actions
with respect to patents that they indisputably own under
state law. And, as a corollary, because standing is an
issue that may be challenged at any time during the
proceedings, adjudged infringers may escape liability
based on the fortuity that, under the majority’s new rule,
the relevant assignment agreements were insufficient to
transfer title before suit, regardless of their sufficiency to
do so under governing state law.
V.
Had the majority followed our precedent and con-
cluded that, under New York law, the agreements were
insufficient to confer standing as of the filing date, I
would not suggest en banc consideration of this case.
Indeed, had the majority applied the correct law but
reached the wrong conclusion, I still would not suggest
that we address the matter en banc. While such a deci-
sion would effectively waste three years of litigation on
the merits, I do not believe the important and difficult en
banc process should be invoked based only on differences
10 Absent an express act by Congress, state law ap-
plies to the transfer of all other types of property, includ-
ing copyrights. See MELVILLE B. NIMMER & DAVID
NIMMER, NIMMER ON COPYRIGHT § 10.08[A] (2010); Roger
Miller Music, Inc. v. Sony/ATV Publ'g, LLC, 477 F.3d
383, 392 (6th Cir. 2007) (applying Tennessee law to
interpret the parties' copyright contracts).
19 ABRAXIS BIOSCIENCE v. NAVINTA LLC
with a panel majority’s application of governing law to the
facts. Because the majority, instead, decided this case by
expanding the coverage of DDB Technologies’s exception
for agreements assigning rights to future inventions to
the exponentially larger class of agreements assigning
existing patents, however, I do not believe we can ignore
the profound impact of this decision. For these reasons, I
must dissent from the court’s denial of Abraxis’s Petition
for Rehearing En Banc in this matter.