by Dennis Crouch
The general rule is that all co-owners of a patent must join together as plaintiffs less the case be dismissed. In STC.UNM v. Intel, the Federal Circuit ruled that, while co-owners are necessary parties, they may not be involuntarily joined. That decision is in some tension with Fed. R. Civ. Pro. Rule 19 that empowers a court to order the joinder of a necessary party. In the case, STC and Sandia National Labs co-own U.S. Patent No. 6,042,998, but Sandia refused to participate in the case.
In a new filing, STC has petitioned the Supreme Court for a writ of certiorari with the following question:
Rule 19 of the Federal Rules of Civil Procedure provides that where a necessary party to a lawsuit has not been joined, “the court must order that the person be made a party.” The Court of Appeals for the Federal Circuit ruled below that Rule 19 is “trumped” by a purported “substantive rule” that a co-owner of a patent can “impede an infringement suit brought by another co-owner.” The majority opinion below stands in stark contrast to this Court’s precedents. For over seventy years, this Court has rejected every statutory challenge to a Federal Rule that has come before it.
The petition particularly argues that the Federal Circuit decision is in conflict with Sibbach v. Wilson, 312 U.S. 1 (1941) and its progeny.
The original decision was authored by Judge Rader (joined by Dyk) with Judge Newman in dissent. In its 6-4 en banc denial, Judge Dyk authored an opinion concurring with the denial (joined by Moore and Taranto) while both Judges Newman (joined by Lourie, O’Malley, and Wallach) and O’Malley (joined by Newman, Lourie and Wallach) dissented from the en banc denial.
I give the case a better-than-average odds for certiorari and, if granted, the court would likely reverse.
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The ownership-tale of the case is a seeming malpractice nightmare. Briefly, the invention stems out a joint research project between employees at UNM and Sandia. Three of the named inventors were UNM employees while the fourth (Draper) worked at Sandia. In 1996, Draper signed an assignment of his rights in the first patent to UNM but then a few months later assigned his rights to Sandia and the new assignment was filed as correction being “made in error” since it had erroneously identified Draper as an employee of UNM. UNM did not challenge this new filing, but at times in the subsequent decade made several statements regarding its sole ownership of the first patent.
The patent in suit is is based upon the first patent but excludes Draper as an inventor. (UNM later filed a certificate of correction to formalize the relationship as a continuation in part). Because of the difference in inventor-employer rights, it would seem that UNM would have full rights to the continuation. However, in order to overcome an obviousness-type-double-patenting rejection, UNM filed a terminal disclaimer in the second case, linking its term and ownership to that of the first patent. Of course, at the time, the two patents seemingly did not have the same ownership structure and UNM indicated to the USPTO that it was “the owner of record of a 100 percent interest” in the second patent. In the present lawsuit, however, STC eventually admitted that the corrected Draper assignment was effective to give Sandia ownership rights in both the first patent and the second. And that admission appears to be treated as an assignment of rights to Sandia if such is necessary.
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Wegner recognized the case in his final top-ten: