Revisiting the Indispensable Party

By Dennis Crouch

In Yesterday’s case of University of Utah v. Max-Planck-Gesellschaft, the Federal Circuit held that the patent owner (here, University of Massachusetts) was not an indispensable party to an inventorship dispute. Judge Moore dissented. And, I think Judge Moore has the better argument here based upon the statutory language. Here’s why. The statutory hook for bringing the case is found in 35 U.S.C. 256 that allows a “court before which such matter is called in question” to “order correction of the patent.” However, the statute requires that any correction of inventorship be made “on notice and hearing of all parties concerned.” In my mind, that statute largely ends the debate.

13 thoughts on “Revisiting the Indispensable Party

  1. Dennis, on the rule 19(b) issue, I completely agree that the panel is wrong and needs to be reversed on this point. UMass is indispensable.

    But even so, I think the overall result is correct because for original and exclusive jurisdictional purposes, UMass is not State of Mass.

  2. LOL – come now Malcolm, you can figure out the fun I am having with you: you raised a rather silly strawman at 10:18 AM.

    It was quite pointless and I threw your own snark (from above at 10:21 AM) right back at you.

    Yes, that is your own CRP that I put your nose into.

    Again.

  3. Perhaps because these are not the issue …?

    Perhaps what? Are you answering someone’s question? Whose?

    What are you referring to when you say “these”?

    This is a beginner’s course for you, Tr0 llb0y. It’s called “How Not to Blogtroll 101″. Maybe you’re in the wrong class?

  4. Yes, and those people in many cases are contractually obliged to assign their patent rights immediately to universities which are owned and controlled by the states. In some cases, they could have no ownership interest in the patent, i.e., no rights whatsoever.

    Perhaps because these are not the issue …?

  5. The subject case here does not seem to me to adequately address that issue [of the adequacy of the assignments]?

    Perhaps because the parties didn’t raise the issue …?

  6. States don’t invent, people invent.

    Yes, and those people in many cases are contractually obliged to assign their patent rights immediately to universities which are owned and controlled by the states. In some cases, they could have no ownership interest in the patent, i.e., no rights whatsoever.

    Seems to me the statute has to be interpreted so that “all parties concerned” in this context means all parties who might be considered an inventor, not necessarily parties who have a financial interest in the outcome.

    While the “financial” interest of the states here is certainly real, it’s hardly the only interest. The states have an ownership interest in the patents, regardless of whether they choose to monetize the patents. Depending on the language in the assignment, the inventors (whoever they are) may have zero ownership interest in the patents. The issue is a due process issue. If I am a property owner who is taken to court and I need to establish a chain of title, the fact that the prior owner(s) may be required to testify or provide evidence does not by itself make those prior owners necessary parties to the lawsuit. They are just key witnesses.

  7. That dispute isn’t impacted in any way, shape or form by the identity of the parties to whom rights in the invention/application were assigned.

    They’re in court as a party, not as a witness. It’s not about whether they were there at the time, it’s about who will be sufficiently motivated by the potential outcome of the case to present the opposing side of the story, and about giving people a hearing before you take their stuff.

    Put another way, how would you feel about the court deciding that you didn’t actually own some property (or, as is typical in patent proceedings, that your property no longer exists) when you weren’t a party to the dispute?

  8. No, of course not. That was not even the question. But it is an additional matter of practicality if the orginal patent owner can be joined, such as being able to use 30(b)(6) depositions.

    The normal legal dispute over required joinder in an assignee suit is whether or not the assignment was complete enough – whether or not the original patent owner retained too many rights or controls. The subject case here does not seem to me to adequately address that issue?

  9. The woman in Utah says the guy in MA got his ideas from her, filed the application without including her and but for her ideas wouldn’t have gotten a patent. She says she should be listed as an inventor. That dispute isn’t impacted in any way, shape or form by the identity of the parties to whom rights in the invention/application were assigned. The raising of “sovereign immunity” by UMass is a disgusting way to try to keep this matter from ever being decided, because it doesn’t want to share, even if (especially if) the listed inventor stole the invention, as alleged. Seems to me the statute has to be interpreted so that “all parties concerned” in this context means all parties who might be considered an inventor, not necessarily parties who have a financial interest in the outcome. States don’t invent, people invent. (As an aside, given the Supremes’ antipathy toward small things like facts when it comes to patent cases, this case would be better off being heard before a real trial judge in a real trial court.)

  10. But, probably the right inquiry is what is the consequence to the party that isn’t included. Do any of the corrections potentially create liability for them or potentially sullen their reputation.

    Otherwise, whoever owns the patent is enough. Let them sort it out.

  11. Paul, since your comment of:

      Especially since most of the possible defenses in patent suits require most of the discovery to be from the original patent owner and its employee-inventors.

    is a truism regardless of any subsequent ‘conditional’ ties of control, would you advocate that ALL parties in any chain of title qualify as ‘indispensable’ parties?

  12. Especially since most of the possible defenses in patent suits require most of the discovery to be from the original patent owner and its employee-inventors.

    I don’t see why that would be a factor. It’s not that uncommon for patents to be sold and then litigated. Sometimes circumstances deprive the patentee of access to the inventors or original owner regardless of who the buyer/plaintiff is. And what if the inventor no longer works for the original owner? Is the inventor an “indispensable party” because you’d rather depose him?

    I fully agree that the patent owner should be an indispensable party when the outcome might affect his property right in the patent, but if a financial interest in the litigation is enough you might as well name plaintiff’s counsel as a party.

    If I had to break it down into something resembling a bright-line rule, I would say that an indispensable party should have something to lose. A party with something to gain can give the trial a miss at his own risk.

  13. Yes.
    There are also other situations in which I wonder why an “indispensable party” [required joinder] issue has not been raised? E.g., assigned patents infringement suits by PAE’s in which the original patent owner retains a major financial interest in the lawsuit outcome and directed whom the PAE can sue or not (to avoid the PAE suing and angering major customers of the orginal patent owner). Especially since most of the possible defenses in patent suits require most of the discovery to be from the original patent owner and its employee-inventors.

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