On December 4, 2025, U.S. District Judge David Counts of the Western District of Texas, Waco Division, adopted the recommendation of Magistrate Judge Derek T. Gilliland and dismissed a patent infringement suit brought by Authwallet, LLC against CIBC Bank USA. The ruling is now on appeal. But the message from the trial court is unmistakable: in patent law, ownership is everything.

Authwallet had accused CIBC Bank USA of infringing U.S. Patent No. 8,099,368 — a patent covering an intermediary service and method for processing financial transaction data with mobile device confirmation. Yet before the court could ever reach the merits of that claim, it confronted a more fundamental question: Did Authwallet actually own the patent when it filed suit?

The answer, the court concluded, was no.

The trouble began in the chain of title. In 2009, the named inventors assigned the ’368 Patent to Fonwallet Transaction Solutions Inc. That much was clear. But years later, in March of 2020, Fonwallet executed a Patent Purchase Agreement purporting to assign the patent to “AuthWallet Illinois.”

There was just one problem. AuthWallet Illinois did not legally exist at the time of the assignment. The entity would not come into existence until May 5, 2020 — two months later.

An effort to repair the defect followed. In February 2022, a corrective assignment was filed, replacing AuthWallet Illinois with “AuthWallet Texas.” But again, the timeline proved fatal. AuthWallet Texas did not exist as a legal entity until March 30, 2021 — nearly a year after the original attempted transfer. Compounding matters, the corrective document appeared to bear the signature of the original signatory, but in fact had been executed by someone else.

Magistrate Judge Gilliland concluded that this flawed chain of title deprived Authwallet of standing — the legal right to bring the lawsuit in the first place — and recommended dismissal.

Authwallet objected. It argued that Fonwallet had effectively ratified the assignment. It contended that the court should have treated the transaction as voidable, not void. And it maintained that technical defects should not defeat an otherwise valid transfer.

But Judge Counts was unpersuaded.

The court emphasized a bedrock principle of patent law: a plaintiff seeking damages for infringement must possess legal title to the patent at the moment the lawsuit is filed. An assignment to a non-existent entity, the court held, is void as a matter of law — not merely voidable. And if the initial transfer is void, any subsequent assignment flowing from it is likewise void.

The cases cited by Authwallet, the court observed, dealt with typographical errors or defects that could be corrected through reformation. They did not authorize the transfer of property to an entity that simply did not exist.

Unless reversed on appeal, the case will remain dismissed.

Authwallet may yet attempt to cure the defect — properly assign the patent and file a new lawsuit. But even that path carries consequences. Patent damages are limited by a six-year statute of limitations, measured backward from the date a complaint is filed. Any delay narrows the window of potential recovery.

In the end, the court never reached the question of infringement. Instead, this case stands as a stark reminder: in intellectual property law, precision in paperwork is not a technicality. It is the foundation of the right to sue.

For companies navigating the complex world of patent enforcement, the lesson is clear. Before asserting rights in court, ensure that those rights are firmly — and properly — in hand.

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For the order granting the dismissal in the Authwallet v. CIBS Bank case, click here.