Securitypoint Holdings, Inc. v. United States

CourtUnited States Court of Federal Claims
DecidedMay 18, 2018
Docket11-268
StatusPublished

This text of Securitypoint Holdings, Inc. v. United States (Securitypoint Holdings, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Securitypoint Holdings, Inc. v. United States, (uscfc 2018).

Opinion

In the United States Court of Federal Claims No. 11-268C (Filed: May 18, 2018)

******************************* SECURITYPOINT HOLDINGS, INC., Patents; Standing; Ownership; Assignment; Motion to Dismiss; Plaintiff, Collateral Estoppel; Judicial Estoppel. v.

THE UNITED STATES,

Defendant. *******************************

Bradley C. Graveline and Manish K. Mehta, Chicago, IL, with whom was Laura M. Burson, Los Angeles, CA, for plaintiff.

Gary Hausken, Director, United States Department of Justice, Civil Division, Commercial Litigation Branch, Washington, DC, with whom were Chad Readler, Acting Assistant Attorney General, and Alice S. Jou and Lee Perla, for defendant.

OPINION

BRUGGINK, Judge.

This is a patent infringement action brought pursuant to 28 U.S.C. § 1498 (2012). Plaintiff, SecurityPoint Holdings, Inc. (“SecurityPoint”), alleges that the Transportation Security Administration (“TSA”) has infringed claims 1-4, 6-9, and 12-15. of U.S. Patent No. 6,888,460 (“460 patent”) by employing similar or identical means and method for recycling trays and carts at airport security screening checkpoints. The 460 patent teaches a system of recycling trays through security screening checkpoints by use of movable carts and also teaches the display of advertising and identification tags on the trays. The patent’s priority date is July 3, 2002, which is when the inventor, Mr. Joseph Ambrefe, first filed a provisional patent application at the Patent and Trademark Office (“PTO”). The 460 patent was issued on May 3, 2005. Defendant has stipulated to infringement at various airports around the country, and we held in 2016 that the patent was valid. SecurityPoint Holdings, Inc., v. United States, 129 Fed. Cl. 25 (2016).

Seven years after the suit was initiated, defendant now brings a motion to dismiss for lack of standing. It asserts that the assignment of the patent application from the inventor, Mr. Ambrefe, to plaintiff’s predecessor-in- interest, SecurityPoint Media, Inc., was either ineffective and void or succeeded in transferring ownership to a non-party. In addition, and in the alternative, it contends, without dispute from plaintiff, that a different entity has been licensing the 460 methodology and indeed has asserted the patent in litigation against other entities. It thus argues that plaintiff has no standing to sue or should be estopped from claiming rights to the patent in this suit. Oral argument was held on May 1, 2018, after which we permitted certain materials to be submitted by both parties to be added to the record.

We are sympathetic with the government’s motion. Over time, Joseph Ambrefe has created a virtual mare’s nest of entities of similar name, all connected to his patented screening methodology. The actions of these entities and of Mr. Ambrefe himself, often through counsel, certainly raise questions as to the owner of the patent-in-suit. To deny the motion to dismiss on either standing or estoppel grounds requires the court to ignore the prodigious proliferation of entities and accept the argument that the current state of confusion is result of a cascading series of innocent mistakes. Nevertheless, that is where we arrive, for the reasons we explain below.

BACKGROUND

During the pendency of the patent application, the inventor, Mr. Ambrefe, executed an assignment to Security Point Media, Inc., asserted to be a Pennsylvania company doing business at 847 West Miner Street, West Chester, PA 19382. As best the parties have been able to determine, there was not then and there never has been a corporation by that name at any address. In an affidavit submitted to oppose the motion, Mr. Ambrefe tells the court that, instead, there was a limited liability corporation in Pennsylvania by the name of SecurityPoint Media, LLC, doing business at 874 West Miner Street, West Chester, PA 19832. The principal of the latter entity was Mr. Ambrefe. It was Mr. Ambrefe’s intention to make the assignment to the LLC. The mistake was apparently that of his lawyer, Mr. Don J. Pelto. The mistaken assignment was recorded at the Patent Office.

2 The current plaintiff, SecurityPoint Holdings, Inc., is the successor-in- interest to SecurityPoint Media, LLC, i.e., not to the nominal assignee. In addition, it turns out that a different entity, Security Point Media, LLC (Florida) (hereafter, “New Media”), has been entering into assignments and leases of the 460 methodology and indeed has been involved in litigation against other entities in which it has asserted ownership of the patent. Plaintiff concedes that New Media does not own the patent.1

One can either attempt to trace the lineage of the patent or attempt to reverse engineer the plaintiff. According to the government, neither exercise helps the plaintiff. The first can be very brief: Mr. Ambrefe assigned the patent to Security Point Media, Inc., which either never existed or did not, in any event, assign the patent to any other entity. Security Point Media, Inc. is not the plaintiff, hence, end of story.

The second approach begins with plaintiff, Security Point Holdings, Inc., and scrolls back through a series of assignments or name changes, none of which end at the nominal assignee. On October 28, 2011, Security Point Holdings, Inc. became the successor-in-name to Security Point Holdings, LLC after the company reorganized in Delaware. Before that, on January 16, 2007, Security Point Holdings, LLC had became the successor-in-name to SecurityPoint Media, LLC (Florida). Before that, on June 1, 2006, SecurityPoint Media, LLC (Pennsylvania) had moved its incorporation and become SecurityPoint Media, LLC (Florida). SecurityPoint Media, LLC was initially incorporated in Pennsylvania on June 7, 2002.

Plaintiff responds that it was to this last entity that Mr. Ambrefe intended to make the November 28, 2003 assignment. Plaintiff asserts that the initial mistake was a scrivener’s error in three respects. There should not have been a space between “Security” and “Point;” the abbreviation for the corporate form “Inc.” should have been “LLC;” and the address number should be transposed from “847” to “874.” In short, it pleads sloppiness rather than ill intent. Plaintiff points out that, on September 29, 2011, a “Corrective Worldwide Assignment” was executed from Mr. Ambrefe to SecurityPoint Media, LLC, the then plaintiff in this suit. It concedes that, even if the corrective assignment were effective, it would not help plaintiff avoid the

1 Although, at oral argument, counsel offered, without direct proof, that it was an implied licensee.

3 motion to dismiss, as this action had been commenced prior to the corrective assignment.

Defendant replies by pointing out that the scriveners error, if that’s what it was, was repeated at least five times. On March 4, 2005, Mr. Pelto paid the issue and publication fees for the 460 patent in the name of Security Point Media, Inc. and the patent was issued in that name on May 2, 2005. Filings also were made at the Patent Office in the name of this same entity on at least four occasions with respect to other patents invented by Mr. Ambrefe. In defendant’s view, the court should view these actions as confirming Mr. Ambrefe’s original intent to convey the patent to the Pennsylvania corporation that bears no relation to the current plaintiff.

In addition to these assignments or name changes, on January 17, 2007, Mr. Ambrefe created New Media as a Florida LLC, along with two other subsidiaries, SPM Productions, LLC, and SPM Operations, LLC. The day before, on January 16, a lawsuit had been initiated in federal district court in Florida in the name of SecurityPoint Media against the Adason Group, LLC. in the Middle District of Florida.

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