Interpreting the Scope of Patent Assignments Beyond Family Members

MHL TEK v. Nissan, Hyundai, KIA, Porsche, Subaru, Audi, Volkswagen and BMW (Fed. Cir. 2011)

MHL purported to obtain its patents from Animatronics and the inventors who themselves own MHL.  However, Animatronics had already assigned a number of patent rights to a third-party, McLaughlin Electronics. The basic standing question for the case is whether the McLaughlin assignment encompassed the patents-in-suit.  If so, then the later assignment to MHL was ineffective and the plaintiff had no standing to sue.

The McLaughlin assignment purported to assign “the inventions and discoveries set forth in [a different patent] application.”  The parties all admitted that the assignment language was broad enough to encompass more than just the single application listed in the assignment.  In considering the language of the assignment, the appellate court broadly held that the assignment was also not limited to “family member” applications linked by a priority claim.  Rather, the test given by the assignment is simply whether the patent “claims inventions and discoveries set forth in the [original] application.”  Here, the court focused on the claims of the patent-in-suit (the ’516 patent) because “the claims of the patent define the invention” and basically conducted a written-description analysis to determine whether at least one of those claims were described in the specification of the original application.  The court considered claim 1 of the ’516 patent and found that its subject matter was fully disclosed by the originally assigned patent.  Without explanation, the court then held that this single claim relationship was sufficient to render the entire patent within the assignment agreement. Thus, the functional interpretation of the assignment language was that the assignment encompassed any patent that included at least one claim that was reasonably described by the original specification.

The court also held that two continuations of the originally assigned application had also been transferred to McLaughlin through the assignment.

Finally, the court walked through a “carve-out” in the assignment that retained ownership for Animatronics for patents that “concern” certain identified “proprietary inventions.”  Taking a technical view of the carve-out provision, the Federal Circuit looked at each patent claim of the asserted patents to determine whether any patent claims covered a proprietary invention as defined in the assignment. Although the court identified some similarity, the court could not find any claims whose scope could be said to cover one of the defined proprietary inventions.  And therefore, the appellate panel affirmed that rights to those patents had been previously assigned by Animatronics and that MHL had no standing to sue on those patents.

 

15 thoughts on “Interpreting the Scope of Patent Assignments Beyond Family Members

  1. I am wondering about patent consignments and reposessions Did I totally invent this and is it legal.

  2. John, I agree with you. 
     
    This case though assigned all the inventions(s) disclosed.
     
    The "covenant" case merely licensed one patent for one product.  The Feds  held that all continuations are automatically licensed.  I consider this result to be outrageous.

  3. John,

    Consider the rules at 37 CFR 1.75:

    (a) The specification must conclude with a claim particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention or discovery. – [Singular invention, singular claim]

    (b) More than one claim may be presented provided they differ substantially from each other and are not unduly multiplied. [Singular invention, multiple claims]

    (d) (1) The claim or claims must conform to the invention as set forth in the remainder of the specification and the terms and phrases used in the claims must find clear support or antecedent basis in the description so that the meaning of the terms in the claims may be ascertainable by reference to the description. [Singular invention, singular or multiple claims]

  4. Ned, I must respectfully disagree with both you and Alun.

    The term “invention” as used in the patent statutes means only a claim. §112, ¶2. Each claim is a separate invention. Id. A specification without a claim does not disclose an invention and does not meet the statutory requirement to be a specification. Id.

    Now, once you have a claim, then the requirements of §112, ¶1 all make sense. You read each claim in light of ¶1 to see of all of the requirements of ¶1 are satisfied as to each claim.

    For those who may disagree with my analysis, my question is: where do you look to find what the invention is?

    Thank you for considering my argument.

  5. Alun, I agree, which makes the “license” of the patent for a particular product case (where the license implicitely extends to all continuations and divisionals) so irrational IMHO.

    But, until overturned, it is the law.

  6. John, just to confuse matters a bit more we have that recent case involving a covenant not to sue in a settlement of a patent dispute. The covenant said, in effect,

    “I will not sue you with respect to this patent for that product.”

    Then a continuation issued with claims directed to a different invention than the patent “licensed.” The owner sued over the same product. The Feds held that the continuation was implicitly licensed under principle of equitable estoppel.

    Taken together, these two cases stand for the proposition that every invention disclosed is assigned regardless of when and where it is claimed, and that every invention disclosed is also licensed when a patent is licensed so that every continuation or divisional is also licensed. If one wants to exclude continuations or divisionals and now even unrelated cases, one will have to be explicit.

    See, link to patentlyo.com

  7. Each claim is an invention. §112, ¶2. Unless two claims are identical (which is not allowed), there cannot be more than one patent that claims “the invention.”

  8. Simple, yes, but only if you file a terminal disclaimer requiring common ownership.

    However, the facts in this case are not that simple. The assignment was of all the inventions disclosed in the particular patent application. The ’516 claims were supported. Therefor it was an invention disclosed in that application regardless of any claim of priority.

  9. From the case refers to the MHL case, not to the Nicolson case.

    The Nicolson case established the principle that assignment of the invention assigns by law, legally, all patents that may issue on the invention.

  10. Also see, Nicolson Pavement Company v. Jenkins, 81 U.S. 14 Wall. 452(1871)
    “http://supreme.justia.com/us/81/452/case.html

    From the case:

    “The ’516 patent is not
    related to the ’496 and ’966 patents. It was filed on May
    2, 1996 and is a divisional of U.S. Patent Application Ser.
    No. 476,613, which itself is a divisional of U.S. Patent
    Application Ser. No. 332,200. ”

  11. Critque, actually on a quick read of the case, I though the ’516 patent WAS unrelated, otherwise the standard law going back 150 years that continuations are automatically assigned would have applied.

  12. From the thread: “Patent Licenses are Presumed to Cover Continuation Applications (Absent Clear Indication to the Contrary)”

    A further thought for consideration on the error of trying to protect “the product.” While the court here expands the scope of the contract to include anything that has a relation to the patent disclosure (as opposed to the patent claims in suit), the rationale for such an expansion can equally be applied to cover any other patents not so related to disclosure, but that still cover the product. After all, if the perceived intent of the parties is to allow the defendant to sell the product without fear of suit, than all patents that could possibly be used in suit on that product must have been thought to have been included for that aim. Otherwise, we still have the same effect of frustration of the defendant.

    Those who partake in patent pools, even those who have patents on complex devices will, I am sure, have serious issues with this type of reasoning and judicial activism.

    See link to patentlyo.com Jul 30, 2011 at 12:50 PM

  13. Even one claim? Why that emphasis?

    The court cannot divide ownership of the patent by claim. If the invention owned by one party by assignment is claimed in a patent, the whole patent is owned by that party.

    This result is not at all surprising.

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