IpVenture v. ProStar (Fed. Cir. 2007)
IpVenture sued ProStar for infringement of its patent directed to a thermal and power management system for computers.
One of the inventors — Douglass Thomas — had been a patent attorney at HP at the time of the invention. The district court found that Thomas had an obligation under his employment contract with HP to assign rights to that company. Consequently, the district court dismissed the case for lack of standing. On appeal, the CAFC reversed.
All entities with independent substantial patent rights must be included in a patent infringement lawsuit — they are “indispensable or necessary parties” to the infringement suit. The policy behind this judicial rule is to ensure that an accused infringer is only sued once.
Here HP has no rights for two reasons:
- Under contract law, HP did not have immediate ownership in the patent rights because the inventor’s employment agreement only created an “obligation to assign” the rights. (The employment contract could have alternatively included terms such as “the inventor hereby grants all rights present and future…”).
- In 2005, HP agreed (via contract with IpVenture) that it did not own any rights to the asserted patent.
After disavowing any rights to the patent, HP ensured that it would not be able to sue ProStar for infringement — as a consequence, IpVenture had standing to sue without joining HP.
- Beware: Patent assignments are contracted interpreted under state law
- There is some California state law supporting the idea that the assignment had ‘vested’ even though it was only an agreement to assign.