Applications in Internet Time v. Salesforce
Panel: Lourie, Chen, Stoll
The Federal Circuit affirmed dismissal of Applications in Internet Time, LLC v. Salesforce, Inc. for lack of constitutional standing. AIT sued Salesforce for infringement of two patents, but the district court determined that AIT lacked exclusionary rights in the asserted patents at the outset of litigation because a 2006 agreement had transferred all patent rights to a non-party, Beverly Nelson, leaving the assignor (ASI) with no rights to convey to AIT in a 2012 assignment. The court also rejected AIT's post-dismissal motion for equitable relief under Rule 17(a)(3) ratification or California contract reformation doctrine.
The Federal Circuit applied California contract law de novo to interpret the 2006 agreement, rejecting AIT's argument that the agreement's "shall transfer" language created only a future contingent conveyance. The court read the contract as a whole, emphasizing the preceding "is hereby sold" language as effecting a present transfer. The panel also addressed California's liberal parol evidence rule, holding that while extrinsic evidence may reveal latent ambiguity, it cannot contradict unambiguous terms, and noting that the relevant extrinsic evidence (Sturgeon's testimony that "everything" transferred to Nelson) actually supported the district court's interpretation. On the equitable relief issue, the court held that neither Rule 17(a)(3) nor contract reformation could cure a constitutional standing defect existing at the lawsuit's inception, though it reviewed the denial for abuse of discretion under Ninth Circuit law.