Judge Sleet denies motion to dismiss for lack of standing

In a recent Memorandum, Judge Gregory M. Sleet denied defendant Imation Corp.’s (“Imation”) motion to dismiss plaintiff IOENGINE, LLC’s (“IOENGINE”) complaint for lack of standing pursuant to Federal Rules of Civil Procedure 12(c) and 12(b)(1). The inventor of the patent-in-suit, United States Patent No. 8,539,047 (“the ’047 patent”), purported to assign the ’047 patent to IOENGINE LLC on October 7, 2014, but IOENGINE LLC’s Certificate of Formation was not filed with the office of the Secretary of State of Delaware until October 8, 2014. Id. at 2. Imation argued that IOENGINE LLC “did not exist at the time of the proferred assignment and therefore could not have received any rights” in the ’047 patent.” Id. at 5. The court agreed that “IOENGINE did not formally exist and could not, as a de jure entity, have obtained ownership of the ’047 patent on October 7, 2014.” Id. at 7.

The court ultimately recognized, however, that IOENGINE was a de facto LLC at the time of the patent assignment on October 7, 2015, and therefore concluded that IOENGINE has standing to bring suit. Id. at 10. Specifically, the court looked to the Delaware “common law-doctrine of de facto incorporation.” Id. at 8. The court could not find “any principled reason to conclude that a limited liability company would or should be treated differently from a corporation when considering the de facto formation of one or the other.” Id. When considering de facto formation, the court focused on facts demonstrating “a good faith, bona fide attempt to comply with the statutory requirements of formation of a limited liability company.” Id. at 10. For example, on October 7, 2014, the formation documents for IOENGINE were finalized, executed, and notarized, and its Delaware registered agent was designated. Id. at 9. The court therefore found that IOENGINE was a de facto LLC on October 7, 2014, and denied Imation’s motion to dismiss. Id. at 10.

IOENGINE LLC v. Imation Corp., C.A. No. 14-1571, 14-1572-GMS (D. Del. Jan. 4, 2017).


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