Sgromo v. Target Brands Inc.

Background

Pietro Pasquale Antonio Sgromo, representing himself, brought a patent and trademark infringement case against Target Brands, Inc. He alleged that Target’s children’s bubble-blowing toys, backyard water slides, and inflatable swimming pools infringed United States Patent Nos. 7,046,440, 8,654,422, and 9,511,298, as well as the H2O-GO trademark.

Sgromo claimed that rights to the patents and trademark had reverted to him after licensing agreements ended. The opinion describes prior disputes and court proceedings involving ownership of the same intellectual-property rights. In those proceedings, other courts had found that Sgromo had not established ownership of some or all of the rights at issue.

Target moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), which allows dismissal when the court lacks subject-matter jurisdiction. Target argued that Sgromo lacked standing—the legal requirement that a plaintiff have a sufficient connection to the claims to invoke the court’s power.

A magistrate judge recommended granting Target’s motion and dismissing the case for lack of jurisdiction. The magistrate judge also denied Sgromo’s motion to amend his complaint and recommended denying his motion for a preliminary injunction. Sgromo objected, arguing that the magistrate judge had incorrectly analyzed ownership of the patents and trademarks. He also filed a motion for an evidentiary hearing.

Court’s analysis

The court conducted a fresh review of the challenged legal conclusions. For patent infringement claims, it explained, a plaintiff must show that he held enforceable title to the patent when the lawsuit began. The plaintiff must also provide a plausible foundation for ownership.

The court found that Sgromo had not met that burden. The materials he submitted from the United States Patent and Trademark Office showed only that documents had been submitted for recording. They did not establish that the underlying assignments were legally valid. The court noted that recording a document does not determine its validity or its effect on ownership.

For the ’440 Patent, the court found that the assignment to Leonard Gregory Scott was signed by Sgromo and transferred all of the assignor’s rights, title, and interest. For the ’422 Patent, the court found that later agreements transferring the patent to Imperial Toy, LLC controlled over the nondisclosure and consulting agreements on which Sgromo relied. Regarding the ’298 Patent and the H2O-GO trademarks, the court found that Sgromo relied only on legally ineffective patent-office recording receipts to establish his current rights.

Because Sgromo had not plausibly shown ownership of any of the patents or trademarks, the court held that he lacked standing to assert the infringement claims. The court therefore did not reach whether Target had actually infringed the patents or trademark.

Disposition

Judge John R. Tunheim overruled Sgromo’s objections and adopted the magistrate judge’s Report and Recommendation. The court denied Sgromo’s Motion for Preliminary Injunction, denied his Motion for Evidentiary Hearing, granted Target’s Motion to Dismiss for Lack of Jurisdiction, and dismissed Sgromo’s Amended Complaint without prejudice. The court also ordered judgment to be entered accordingly.