Yale Preston v. Marathon Oil (D.Wyoming)
The trial date is approaching in the case of Preston v. Marathon Oil. Preston was a former employee of Marathon and the two are disputing ownership of patent rights. Preston and Marathon each obtained a patent naming Preston as the inventor. Marathon’s file-history is interesting because it includes a petition to accept an unsigned oath based on the inventor’s refusal to sign.
37 CFR 1.47(b) reads as follows:
Whenever all of the inventors refuse to execute an application for patent, or cannot be found or reached after diligent effort, a person to whom an inventor has assigned or agreed in writing to assign the invention, or who otherwise shows sufficient proprietary interest in the matter justifying such action, may make application for patent on behalf of and as agent for all the inventors. The oath or declaration in such an application must be accompanied by a petition including proof of the pertinent facts, a showing that such action is necessary to preserve the rights of the parties or to prevent irreparable damage, the fee set forth in § 1.17(g), and the last known address of all of the inventors. An inventor may subsequently join in the application by filing an oath or declaration complying with § 1.63.
The petition filed by Marathon includes: (1) a statement from Marathon’s attorneys that contacted Preston by Mail and by Telephone and that he indicated his refusal to sign; (2) a copy of the employment agreement that includes a promise to disclose and an assignment of IP rights. The petition was granted. [Petition.pdf (2643 KB)]
Two interesting tidbits: (1) Preston’s patent issued first, and the examiner of the Marathon Oil application issued a double-patenting rejection. Interestingly, it does not appear (from the file history) that Marathon ever filed a terminal disclaimer or otherwise discussed Preston’s patent. [The Preston patent was not disclosed by the Marathon, rather it was located by the Examiner in his search.] (2) the employment agreement is important for the case. As he signed his agreement, Preston indicated that he held prior rights in a “CH4 Resonating Manifold” that would not belong to Marathon. The agreement expressly states that Marathon agrees that those rights are “NOT the property of MARATHON.” The question up for grabs is whether the invention at issue in this case is the same as the CH4 manifold disclosed in the agreement.
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I favor government restrictions on Mooney.
Is it an accident that Statute of Limitations has the same initials as sh1* out of luck?
Yep, looks like Marathon’s ineptitude has made this infringement case a non-starter.
Malcolm, you have a dispute between a company and an employee over rights to an invention. If the company first raises the issue years after it was on notice of the employee’s adverse claim, most states will bar the action of the company either in equity via laches or in law via a statute of limitations.
But, the Federal Circuit has held that when deciding standing, that defenses of SOL and laches cannot be asserted by the employee in a patent infringement action, relying on prior US Supreme Court case law, IIRC.
Essentially what this means is that the employee’s ownership rights are never secure. He can inform the company of his adverse claim. Years may pass. The employee may invest millions developing a company based on the patent, but the moment he sues, the issue of ownership may be raised by a challenge to standing. No statute of limitation. No laches. No estoppel. Nothing.
Under common law, this is not possible. Long held adverse possession gives ownership to the adverse possessor. I think this is right and proper. What I think the Federal Circuit is doing is fundamentally wrong and unjust.
Ned: I remain strongly critical, indeed, outraged, as some of the injustices that have resulted in recent Fed. Cir. cases where the present assignment of a future invention operated to eliminate such things as statutes of limitation
So this is an instance where you favor government restrictions on people’s freedom to engage in property transactions?
“I don’t know how many times you need to be told, but nobody will hire you to make something if they don’t get to keep it. They’ll just copy other people’s creative ideas for free.”
Trade secrets are still a viable protection in many areas, including high-tech
How many patents Google has ?
Practically none, compared to MShit or IBM
(they had a few dozen patents just several years ago when they were already a huge company)
it was all server-side computing from the very beginning – a trade secrets territory
Now they are big and bad and can do whatever they want, incldign filing a lot of junk patent apps just like the rest of the big bullies: Mshit IBM, Intel, HP etc.
Abolish all patents and corporate employers will no longer have any power over our work
No, your work will be under the bailiwick of the welfare system. I don’t know how many times you need to be told, but nobody will hire you to make something if they don’t get to keep it. They’ll just copy other people’s creative ideas for free.
Companies will have to reward and retain true creativity,
They already do. They don’t hire you to invent one thing and leave. Creative people continue to develop technology, and produce many patentable inventions. Companies are very happy to reward and retain those people.
Just like in any other job, if you do one good thing and then stop producing, your employer is well advised to let you go.
“I remain strongly critical, indeed, outraged, as some of the injustices that have resulted in recent Fed. Cir. cases where the present assignment of a future invention operated to eliminate such things as statutes of limitation.”
I once agreed with this, but then I started thinking of how when you sell land, you sell the mineral rights with it, even though the minerals themselves have not been, let alone mined. It seems like a present assignment of future inventions is sort of like that.
Abolish all patents and corporate employers will no longer have any power over our work
Companies will have to reward and retain true creativity, as opposed to present reality of treating their most creative R&D folks like dirt: file your patent app and you can go
Either this or have inventors retain some property rights in their patents even if they are hired to invent in the first place
The present situation of having to sign over your inventions to your corporate masters before they are invented is not healthy
Off the top of my head, one approach that Marathon might take is that Preston publicly disclosed his prior rights in a “CH4 Resonating Manifold” when he used that info at Marathon
Scorched earth isn’t the strategy of choice when you still want your own fence around that property.
(When Marathon received a copy of Preston’s patent from the Examiner, they must have went ape.)
Off the top of my head, one approach that Marathon might take is that Preston publicly disclosed his prior rights in a “CH4 Resonating Manifold” when he used that info at Marathon (assuming that he did and that it was more than one year before he filed, etc.). Thus, to the extend that Preston’s patent covers his prior rights in a “CH4 Resonating Manifold”, he might be barred.
On the other hand, Preston likely was covered by a nondisclosure agreement while at Marathon, so there might not have been a public discloure with regard to the info in Marathon’s patent, even if it contained info about Prestons “CH4 Resonating Manifold.”
I haven’t given the above much thought, but it would be interesting to see a case where there was a public disclosure that applied to one entity but not another under such circumstances.
Ned: “I can only hope the Fed. Cir. again is taken to the woodshed by the Supremes on this issue…”
Do they all take turns with the switch, or do they just let Scalia do it?
Nice job Ned.
In the agreements I write, the employee may reserve ONLY prior patent applications and published works. They specifically represent that any prior work which is not reduced to a filed patent application or published work of authorship is part of the “skill and knowledge” of the employee.
I see what you did there. The employee only keeps objectively identifiable property, and all the nebulous unprovable stuff like “what was in his brain on that date” belongs to the company.
If only more lawyers (and claim drafters) knew the difference between describing something in words and being able to later identify what the words describe, judges would have much more free time.
Malcolm, no doubt, you’re right. However, I remain strongly critical, indeed, outraged, as some of the injustices that have resulted in recent Fed. Cir. cases where the present assignment of a future invention operated to eliminate such things as statutes of limitation. I can only hope the Fed. Cir. again is taken to the woodshed by the Supremes on this issue, treating substantive State Law as a matter of Federal Law.
Malcolm, you are absolutely correct. And even before the recent cases you are referring to, I don’t know why it was not routine practice to include such language. It’s the sort of thing routinely done in other areas of the law, yet for some reason not all IP attorneys write agreements that way. Then again, I have seen many IP-related agreements (e.g., patent licenses) where the drafting attorney clearly does not understand the distinction between warranty and indemnity clauses.
Secondly, the agreements I write require the assignment of any invention either conceived, or reduced to practice, as an employee.
Based on some recent cases, isn’t the better approach to draft agreements such that proper (employment-related) inventions vest immediately upon conception/reduction, instead of creating an obligation to assign that may or may not be acted upon in a timely manner.
WRT, the CH4 retained invention, what if the “prior invention” were not reduced to practice at the time of employment? What if the inventor reduced to practice on company time, using its resources? What if, further, the subject matter of both patent applications was a very subject matter the employee was working on as an employee and would otherwise have a clear obligation to assign to the company?
The issues get dicey and may be worked out almost as if this were an interference.
I consistently revise employment agreements to remove “retained” invention clauses precisely because of the problems presented here. Who is to know the full extent of the “prior invention” to be retained by the incoming employee.
In the agreements I write, the employee may reserve ONLY prior patent applications and published works. They specifically represent that any prior work which is not reduced to a filed patent application or published work of authorship is part of the “skill and knowledge” of the employee. Secondly, the agreements I write require the assignment of any invention either conceived, or reduced to practice, as an employee.
Obviously, with the poorly written employment agreement, Marathon has only itself to blame for the mess it’s got itself into.
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