On February 28, 2017, Judge George Hazel issued an order and
opinion granting Defendants LWRC International, LLC
("LWRCI") and Sig Sauer, Inc.'s. ("Sig
Sauer") motions to dismiss Plaintiff Paul Andrew
Leitner-Wise's complaint, finding that Plaintiff no longer
possessed any rights in the asserted patent and therefore lacked
standing to bring a claim of patent infringement.
Plaintiff is the sole inventor of U.S. Patent No. 7,461,581 (the
"'581 Patent"), titled "Self-Cleaning Gas
Operating System for a Firearm" and founded the Leitner-Wise
Rifle Company (LWRC) in 2004 to commercialize his invention. In
2005, Plaintiff sold LWRC, but was retained by the company as an
executive, subject to an employment agreement that paid Plaintiff a
royalty on each unit of the patented product sold. In 2006,
Plaintiff ended his employment with LWRC. As part of the
termination of his employment with LWRC, Plaintiff assigned
"[his] entire right, title, and interest" in the '581
Patent to LWRC and signed an agreement relinquishing his rights to
any further royalties associated with the '581 Patent.
Plaintiff subsequently filed suit against LWRCI and Sig Sauer on
June 26, 2016, alleging infringement of the '581 Patent. The
complaint also included claims for breach of contract and unjust
enrichment relating to Plaintiff's contention that he retained
royalty rights to the '581 Patent. Defendants filed motions to
dismiss the patent infringement claim for lack of standing and to
dismiss the breach of contract and unjust enrichment claims on
summary judgment. Ruling on Defendants' motions, the court
dismissed all of Plaintiff's claims, finding that the 2006
agreement between Plaintiff and LWRC relinquished all of
Plaintiff's rights in the '581 Patent and terminated any
royalty rights that Plaintiff previously had to products including
the patented invention.
With respect to the patent infringement claim, the court found
that the 2006 assignment agreement transferring Plaintiff's
"entire right title and interest" in the '581 Patent
to LWRC unambiguously demonstrated "an intent to transfer,
without reservation, all rights in the '581 Patent." The
court further noted that the Federal Circuit has "implied that
this exact language signifies a transfer of all substantial rights
in the patent to the assignee." Even if Plaintiff had retained
a royalty right in the '581 Patent, the court found that such a
provision would not limit the assignment to LWRC, unless the
reservation was of a "substantial right, such as the right to
exclude others from making the patented product." Since the
court found that Plaintiff had assigned his entire right in the
'581 Patent to LWRC and retained no substantial right, the
court found that Plaintiff lacked standing and dismissed the patent
Leitner-Wise v. LWRC International, LLC et al,
8:16-cv-02430 (D. Md., Feb. 28, 2017)
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