Delaware Judge Rejects “Champertous” Assignment Argument

Yesterday, Chief Judge Sue L. Robinson issued an interesting decision addressing the ability of what is alleged to be a straw plaintiff’s attempt to prosecute (and fund) an infringement action on behalf of another. The defendants KBC and others claimed that plaintiff was assigned rights to the patent-in-suit solely “to fund and pursue this suit” on behalf of the non-party assignor, who KBC contended was an indispensable party. According to KBC, such an assignment is “champertous and void.”

The Court rejected this argument based on a supplemental brief filed by plaintiff that contained affidavits of the non-party assignor and the original inventors. In those affidavits, the non-parties agreed to be bound by the instant litigation and to refrain from initiating any other actions against the same defendants. The Court found this statement constituted a renunciation of any residual rights to the patent.

Thus, when pursuing or facing a 12(b)(7) motion, an assignor’s (or would-be assignor’s) testimony can be dispositive.

LP Matthews LLC v. Bath & Body Works Inc. et al., C.A. No. 04-1507-SLR (D. Del. Oct. 19, 2006) (Robinson, C.J.)

Related Opinions Issued Yesterday:

LP Matthews – Claim Construction
LP Matthews – SJ-Infringement
LP Matthews – SJ on Invalidity and Inequitable Conduct

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