When a Consultant Starts Work Before He Signs the Agreement

by Dennis Crouch

A discussion of TriReme Medical v. AngioScore, Inc. (Fed. Cir. 2016)

Corporations must be getting somewhat annoyed with the antics of these pesky inventors. TriReme v. AngioScore centers on an inventorship dispute involving Dr. Chaim Lotan who was previously a paid consultant with AngioScore but who later sold his rights to a competitor TriReme.   In the lawsuit, TriReme sued for correction-of-inventorship of three AngioScore patents that do not currently list Lotan as an inventor.

The Supreme Court has repeatedly announced that ownership of potential patent rights initially vest with the inventor(s). So far in our law, the set of potential “inventors” is limited to human persons (not corporate persons or machines or macaques). The initial right may, however, be transferred to through an assignment agreement.

In this case, the district court found that Lotan had assigned his rights to AngioScore and that his later purported assignment to TriReme actually transferred no rights.  These two conclusions led to the final dismissal with a holding that TriReme had no standing to bring its claim.

On appeal, the Federal Circuit pulled-up the Consulting Agreement between Lotan and AngioScore that plainly indicates that Lotan “hereby assigns” all rights to his inventions, developments, and improvements made during the term of the Agreement. The problem with the agreement, however, was that Lotan had actually begun working prior to his signing of the agreement.  In particular, he had run a full day test on the proposed angio-balloon, discovered a retention problem and recommended a solution.  The later issued patents (that did not include Dr. Lotan’s name) did include an attachment structure similar to the one he had recommended.

The consulting agreement included a second provision that required Lotan to list all prior inventions relating to the work to be developed. Lotan did not include his suggested solution in that list.  The district court held that Lotan’s failure to include the pre-agreement solution on the list resulted in an assignment of his rights to that solution to AngioScore – based upon an understanding of the “purpose” of the agreement.

On appeal, the Federal Circuit rejected that analysis. Applying California law, the court found that nothing in the contract purported to assign pre-agreement rights.  Likewise, the Federal Circuit found no “estoppel-by-contract” since “neither Dr. Lotan nor his successor in interest (TriReme) seeks to enforce any rights under the contract.”


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The situation highlighted here regularly arises when a third-party is initially approached informally before being contracted-in.  The solution to the problem is to add an ex post assignment of any pre-agreement innovations stemming from the informal work.

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The patents at issue include U.S. Patent Nos. 8,080,026; 8,454,636; and 8,721,667.  To me it is somewhat interesting that one of the listed co-inventors (Eitan Konstantino) left AngioScore to found the competitor TriReme.

David Caine (Arnold & Porter) argued the case for TriReme while Peter Armenio (Quinn Emanuel) represented AngioScore.

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

15 thoughts on “When a Consultant Starts Work Before He Signs the Agreement

  1. “So far in our law, the set of potential ‘inventors’ is limited to human persons (not corporate persons or machines or macaques).”

    Good one, Dennis.

  2. Well, at least it is out in the open now. ‘Merica still recognizes the “inventor” not the exploitive entrepreneurial entity, as fashioned in Europe. The trajectory, however, is typically toward usurpation of the creations of the inventor by the entrepreneur.

    Kind of like the record company friction with the recording artists.

    1. Richard I don’t know what you mean about “fashioned in Europe”. Here is a link to EPC Article 60 on ownership of inventions, revealing the primacy of “the inventor”. Can you please give me a clue what you mean, in the context of Art 60 please.

      link to epo.org

  3. From my understanding, the inventor never signed the applications (declarations), nor did he sign an assignment specifically referring to the applications either by name or by serial number. The result in this case is correct for that reason.

    I find it odd that the Federal Circuit says a California law governs the interpretation of this assignment agreement yet it still applies Filmtec to override California law when it is so chooses. Where does it get this authority?

    1. Can you be a little more specific in your complaint, Ned?

      You may be mixing different areas of law.

      Heavens knows, I have had to correct you several times over the dealings of the inventor/owner issue stretching back to the Stanford v Roche decision.

    2. RE point 1 (declaration etc): I dont follow because
      35 USC 152 states “Patents may be granted to the assignee of the inventor of record in the Patent and Trademark Office, upon the application made and the specification sworn to by the inventor, except as otherwise provided in this title.

      except as otherwise provided by this title (title 35 of USC) includes

      35 U.S. Code § 115 – Inventor’s oath or declaration
      (d) Substitute Statement.—
      (1)In general.—
      In lieu of executing an oath or declaration under subsection (a), the applicant for patent may provide a substitute statement under the circumstances described in paragraph (2) and such additional circumstances that the Director may specify by regulation.

      and 35 U.S. Code § 118 – Filing by other than inventor
      A person to whom the inventor has assigned or is under an obligation to assign the invention may make an application for patent. A person who otherwise shows sufficient proprietary interest in the matter may make an application for patent on behalf of and as agent for the inventor on proof of the pertinent facts and a showing that such action is appropriate to preserve the rights of the parties. If the Director grants a patent on an application filed under this section by a person other than the inventor, the patent shall be granted to the real party in interest and upon such notice to the inventor as the Director considers to be sufficient.

      I don’t know the facts of the prosecution history but those points are either accomplished or correctable (by reissue I believe); more importantly, they aren’t determinative of OWNERSHIP, rather they are procedural.

      RE point 2 (film tec): I agree the federal circuit application is a little unhinged from the statutory language. But once you assume they are putting a little gloss on patent law (specifically, I guess, 35 USC 261) would not the supremacy clause preempt state law to the contrary?

      Now we can argue the propriety of the gloss (probably incorrect gloss), but if it is there (and it certainly is by precedent), then it preempts, no?

      1. drop by, the provisions you cite are new circa 2013.

        However, what happened here is that AngioScore filed on the invention of Lotan and did not even name him as an inventor. The action is by Lotan/his assignee to correct inventorship.

        Let me tell you, this kind of “cr#p” happens all the time with consultants. They leave, become hostile. What to do? Simply file, name company inventors and ignore the consultant.

        1. Ned,

          Are you (seriously) KNOWINGLY advocating signing a defective oath and omitting a known inventor just because of a side-dispute?

          This – on its face – appears to be not only some extremely poor advice – but unethical practice in front of the USPTO.

          Please tell me that you meant something other than what you posted.

          1. Anon, perhaps I should have used a question mark at the end of my last sentence.

            No I am not advocating what apparently was done here.

            But may I suggest it was also done in the Seagate case involving the inventor who was fired for complaining that he was omitted from a patent application where he had at least contributed to the invention if not being the sole inventor.

            Corporations do this all the time. I am not sure that outside firms do this – they usually take it on face value that the inside people have the inventorship correct when they are asked to file a patent application.

            1. Thanks Ned – your “change of heart” is noted, but I would daresay that “take it on face value” is a little “light” when you advise a client what the Oath means…

      2. drop by, if the Federal Circuit based its FilmTec decision on statutory law, then I would clearly support it. But I the statutory language is inconsistent with FilmTec . It is

        1) the inventor be named,

        2) sign the application, and

        3) that the assignment be recorded

        for an assignee to own a patent.

        Now the law and the rules allow a “record” assignee to show enough proprietary interest, that he could proceed without the signature of the named inventor on the application. The new statute seems to omit the requirement for a recorded assignment. But was any of this done in any case where FilmTec has been decisive? No!

        In every case where FilmTec was applied, the prevailing “assignee” had nothing to do with the application as filed. FilmTec was applied to overrule the cooperative actions of the inventor to file and assign the invention to a particular assignee.

        When a putative assignee claims rights in a patent, the law should require that they obtain legal ownership in a court of law. State law should control. The law regarding assignments and contracts, including equitable assignments, is state law.

          1. anon, an assignee can file without the cooperation of an inventor if it names him, explains that the inventor cannot be found or that he refuses to cooperation, and provides evidence of assignment.

            But Filmtec has been applied where the putative assignee is not the one filing the application. It is being applied against the inventor who does file himself. It is being applied where the inventor does cooperate with the assingee filing. It is being applied in the case of Seagate where the company didn’t even name the inventor, but instead fired him when he complained that he was not named.

  4. DC: Corporations must be getting somewhat annoyed with the antics of these pesky inventors.

    Yesterday’s oral arguments included a very glum and profoundly disinterested panel hearing arguments about Ford Motor Company “unjustly enriching” itself off the incredible robot car “insights” of an aggrieved consultant (who was paid pretty well for what amounted to little more than telling Ford “hey, this technology already exists” and “someone could probably program a computer to do this, too”).

    Berry v. Ford Motor Company

    See also:

    link to law360.com

    The suit, which was filed in a Michigan circuit court in January 2011, began two years after Berry was fired for lying about holding a degree from Wayne State University, having potential conflicts of interest with a vendor and possessing explicit photographs on his work computer, according to court filings.

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