Verna IP Holdings, LLC v. Clearly IP Inc., No. 1:26-cv-261 (E.D. Wis. Oct. 13, 2026)

The court dismissed this patent infringement case because the plaintiff never validly obtained the patent it asserted. The patent was originally issued to a New Mexico company, Verna IP Holdings, LLC (“Verna New Mexico”). On Oct. 11, 2023, the parties executed an assignment transferring the patent to a Texas company with the same name (“Verna Texas”). Verna Texas, however, did not officially form that Texas company until Oct. 24, 2023, 13 days after the assignment was executed. Under Texas law, a company does not exist until the state files its certificate of formation, and a nonexistent entity cannot enter into a contract. The court therefore held that the assignment was void and never transferred ownership of the patent to Verna Texas. 

Only a patent owner, or someone holding similar exclusionary rights, has standing to sue for infringement, and those rights must exist when the lawsuit is filed. Because Verna Texas could not show that it owned the patent when it filed suit, the court held that it lacked both standing and jurisdiction over the case. 

The court also rejected the plaintiff’s attempts to cure the defect after the fact. It denied the plaintiff’s request to “reform” the assignment so that it would take effect on the date the Texas company was formed. The court explained that reformation requires an earlier agreement between the parties and a shared mistake in writing it down, and neither could exist when one party had not yet been formed. The court distinguished cases involving a simple typo in the name of an existing company from this situation, where the assignment was intentionally made to a company that did not yet exist. The court also refused to allow jurisdictional discovery or an amended complaint, noting that the plaintiff offered no evidence, such as a confirmatory assignment, showing that it owned the patent when it filed suit. The dismissal is without prejudice, so a properly titled owner could potentially refile. 

Tips to Avoid This Outcome

1. Form the entity first. Confirm the state has filed the receiving entity's certificate of formation before anyone signs the assignment.
2. Re-execute, don’t backdate. If an assignment may have been signed before the assignee existed, have it re-executed as a new assignment with a current date. Informal agreements among owners or members will not cure the gap.
3. Audit the chain of title before enforcement. Review every link from the original assignee to the current owner before sending a demand letter or filing suit.
4. Keep the paper trail ready. Maintain the assignments and formation documents in one place, because the plaintiff bears the burden of proving ownership with evidence if challenged.
5. Record assignments with the USPTO. Recording promptly creates a clear public record and makes title problems easier to spot early.
6. Remember the filing-date rule. Ownership must exist on the day the suit is filed and cannot be fixed afterward.