by Dennis Crouch
The recent decision in Beriont v. GTE Labs offers some further thoughts on the employee-employer relationship. Up-front, I should note that Mr. Beriont has represented himself pro-se in this litigation and that may have resulted in his eventual loss here.
Mr. Beriont is a former GTE engineer who conceived of an improved device for optical-to-RF signal conversion back in 1996 and worked with another GTE employee (Bellows) to reduce that invention to practice – creating a working model. Later that year Beriont was fired for being a trouble-maker in ways apparently unrelated to the invention in question. However, GTE determined that the idea had merit and has (apparently) incorporated it into products and also filed for patent protection. U.S. Patent No. 5,920,802.
The patent was filed with Beriont’s partial cooperation. By partial-cooperation, I mean that Beriont signed the declaration of inventorship but refused to sign the document assigning rights in the patent to GTE. The other listed inventor – Bellows – did assign his rights.
State Court Action: Hoping to quiet title over the patent rights, GTE filed a declaratory judgment action in Massachusetts state court seeking a judgment that the company was the sole owner. That case resulted in an eventual settlement with a $50,000 payment to Beroint and an agreement that the parties “shall be joint owners” of the patent.
Federal Court Action: Meanwhile, Beriont also sued in federal court seeking a declaration that Beriont was the sole-inventor and that GTE infringed the patent. Following the state-court settlement district court dismissed that case on summary judgment. On appeal here, the Federal Circuit has affirmed.
On Inventorship, once a patent issues the courts apply a presumption that the listed inventorship is correct and can only be modified based upon clear and convincing evidence otherwise – something the courts have identified as a “heavy burden.” In particular, the moving party must prove that inventors being excluded did not contribute to the invention of any of the allowed claims. On summary judgment, the district court had disregarded Beriont’s testimony as not sufficient to meet that burden. And, on appeal, the Federal Circuit agreed – finding that an inventor’s testimony regarding conception must be corroborated in order to overcome the burden. [This is an obvious failure that a patent litigator would not have missed.]
On Infringement. With the co-ownership agreed upon in the state court now confirmed on appeal, each co-owner has full right to make use of the invention. Thus, GTE’s use of the invention cannot be infringing. Further, because the court here confirmed that inventorship (and therefore GTE’s ownership claim) was correct since issuance, there are no potential back-damages.
The employee should negotiate a deal to sell his half of the patent for a very handsome sum. I can’t see split ownership working out for GTE in the long run…
Perhaps Beriont should start selling nonexclusive licenses to GTE competitors?
My experience with corporate politics is that coworkers often try to horn in on any glory associated with an invention. If the inventor does not cooperate, things usually get nasty.
If Beriont has the right to license without the consent of GTE, then GTE probably has a cause of action against its counsel for malpractice.
Not seeing that Ned, as GTE never thought that Beriont was NOT (at least and at most) a co-inventor.
Are you thinking that co-inventors must mutually obtain consent to any licensing?
Ned may be referring to the fact that both employees should have had airtight employment agreements assigning patent rights to their employer. [Which could brought to the attention of the PTO re the pending application in the case of an application control or ownership dispute, or be otherwise enforced.] Plus, a correct, documented, inventorship determination needs careful consideration in advance in this kind of dangerous situation where one inventor refuses to sign a formal individual application assignment. Likewise, it needs proper powers of attorney, application access, and prosecution control which avoids any unresolved conflicts of interest.
But as to malpractice suits, even if justified, large corporations almost never sue their own employed patent attorneys. Or rarely even sue their outside counsels, other than for provable big litigation losses in some cases. Not that many patent attorney malpractice suits are successful, although some get quietly paid off by insurers. A major reason for not suing is that it can reflect badly on the corporate managers who hired and were supposed to be supervising those patent attorneys.
Paul,
It may surprise you how many employer-employee relationships lack that “airtight” agreement.
Especially with larger corporations that have grown through acquisitions. In most states a corporation cannot force such an agreement on already hired employees.
Your other points are well made – thanks.
Anon,
I’ve done a fair bit of research on employee/employer agreements. My understanding is that in almost all states an employer can ‘force’ a new agreement on the employee.
The issue, if we’re speaking of the same thing, is whether employment in that state is default “at will.”
If the employment is considered at will, consideration for the new agreement is the employer not firing you (or rehiring you for another day.)
A major reason for not suing is that it can reflect badly on the corporate managers who hired and were supposed to be supervising those patent attorneys.
People sometimes care about stuff other than winning a lawsuit?
Imagine that.
You do realize that this particular thing being cared about it not a good thing, right?
What a chump.
Did you just call me a “chump”, “anon”?
You do realize th
Work on the English language. Try to use declarative sentences to describe your beliefs, even if those beliefs are really wacky and you are embarassed or unsure of them.
For instance, here you seem to think that something is “not a good thing.” Tell everyone exactly what that something is and why you hold this belief.
Go ahead. Give it a shot.
Or just continue insulting people here like some sort of s 0 cio0path who can’t help himself.
not pursuing an otherwise legitimate lawsuit just because of your own ineptitude is not a good thing
Who said it was “a good thing”? Who made any judgment one way or the other on that topic? Who are you arguing with and why? Why do you explain yours thinking only after you call me a “chump” and even then you can’t bring yourself to do so in a declarative sentence?
See a shrink for cripesake.
Functional Claiming? MM -What aren’t you calling it a Junk patent?
1. A video signal distribution system comprising:
a primary power module;
an optical to radio frequency conversion device having a plurality of signal ports and configurable such that at least two of the signal ports are isolated from an electrical power signal received from the primary power module;
a power inserter apparatus coupled to one of the isolated signal ports and configured to provide a low frequency electrical signal to downstream devices receiving a RF signal output by the conversion device; and
an auxiliary power module coupled to the power inserter apparatus and configured to provide the low frequency electrical signal to the power inserter apparatus.
He’ll argue they’re functional because they use “configured to” and therefore describe the function. I.e., “an auxiliary power module … configured to…”. Of course, it would be incredibly difficult to describe the actual hardware that goes into making an auxiliary power module and how that would be configured to do whatever it does. And — gasp!! — perhaps these items are configured by software — oh the horror!
Good comment, Bob.
it would be incredibly difficult to describe the actual hardware that goes into making an auxiliary power module
Last time I checked, somebody at the company who makes hardware usually know what it looks like. If the person can speak and write English, they should be able to describe it without too much difficulty.
Is this hardware different? All the changes are at the sub-atomic level or something?
Let everybody know.
Regardless, it’s always fun to listen to people pretend to speak for you, especially when those people don’t really know what they are talking about. Keep the hits coming!
That … or put an egg in your shoe and beat it.
[…] Patent Conflicts between Employers and their Employees […]
Huh?
Since when is a person who does not contribute to the conception of the invention an inventor?
Ned: Since when is a person who does not contribute to the conception of the invention an inventor?
I think the answer is: when the person is named as an inventor on the application as filed and the challenger has no evidence other than uncorroborated self-serving testimony.
MM, but the fact state that the alleged coinventor did nothing more than reduce to practice.
I believe you are referring to the following quote:
Beriont disclosed this invention to Alfred Bellows (“Bellows”), a co-worker at GTE, who “constructed, evaluated, and tested” the invention. J.A. 71
I think it’s a bit of a stretch to leap from that summary of the record (whether accurate or not) to a found statement of fact by the CAFC or the district court that the “alleged coinventor did nothing more than reduce to practice.”
Bellows is a named inventor on the patent. Beriont signed a declaration stating that he was the “second Joint inventor.” Then he does a complete about face (after the patent issues and around the time that he is terminated) and asserts that Bellows doesn’t belong on the patent. To support his new position he offers no evidence except his uncorroborated testimony.
The guy is a piece of work. He had a bunch of money in hand with the earlier un-“ratified” settlement but, as far as I can tell, he decided (somehow) that he deserved more than a 50% interest in the patent so he just kept poking his former employer.
MM, Beriont was represented by GTE counsel who had a conflict of interest.
If and when this patent is litigated, I think the facts will prove out just as I stated such that it will be found that the GTE “inventor” did nothing regarding the conception of the invention, and therefore is not entitled to be listed on the patent is a coinventor. If this proves to be the case, the patent will be invalidated and GTE will have won a Pyrrhic victory.
If this proves to be the case, the patent will be invalidated and GTE will have won a Pyrrhic victory.
GTE already agreed to make this guy a co-owner, which means they can’t do much with it anyway. All they wanted was a freedom to operate, which they’ve now got. In any case, no third party is going to be able to do as you suggest without Beriont’s cooperation – if he wants to help invalidate his own patent, more power to him.
DanH, on an ongoing basis, co-ownership solved their freedom to operate. A shop right would have solved their prior problems.
This means to me that they should have bent over backwards to get the inventorship correct when the issue was before a court who had the power to correct inventorship.
“MM, Beriont was represented by GTE counsel who had a conflict of interest.”
Are you referring to the counsel who got him to sign the Declaration? That counsel represented GTE, and not the inventors. Inventors know the attorneys who draft their applications are the company’s lawyer, not their lawyer.
AAA JJ, perhaps that is generally true A J, but can counsel for the corporation legitimately represent a fired employee who refuses to assign? How can they zealously advocate the interests of the fired employee, just for example.
I haven’t thought this through all the way, to be sure. Perhaps Professor Hricik will weigh in here. He is the expert.
The conflict interest is between the company and the fired employee.
You are still assuming that the fired employee was being represented.
He wasn’t – obtaining the declaration was not an act of representation of the inventor – it was an act of representation of GTE alone.
But I think I get what you are driving at, after all, this was a pre-AIA application, and the prosecution of the application – being as it is one of joint inventors (and TWO separate owners) may implicate that the prosecution actions do entail representation of Inventor Beriont.
The way out of course was that such limited representation was merely for a mutual benefit (even as the two parties had related animosities) – the scope of representation did not impinge on those other animosities.
Get the patent first and then figure out any inventor/ owner issues…
I do realize that this is a ‘thin’ out, one easily disrupted even with a single Office Action if the representative did not obtain informed consent from both parties during prosecution.
A separate issue raised by the topic of the case (but not by the facts of this case) is:
Should the presumptive weight given to listed inventors change because the America Invents Act greatly changes the ability of a corporation to prosecute a patent application in its own name as opposed to prosecuting the application directly in the name of the inventor (unless an actual assignment is supplied)?
The purpose of substantially easing the “requirement” is clearly indicated in the Congressional record. Should not this easing carry through to any post grant contest on inventorship? Would not the accompanying lessening of the draconian penalty of having the incorrect listed inventorship also dictate a reason for lessening the court’s standard of presumption?
Ned, that was an alleged fact that Beriont failed to prove in his case at chief.
Since he failed to prove it, you can’t simply assume it to be so for your point here.
anon, so long as we are operating on what is likely, I think it that it is a fair assumption that the reducer did not contribute to the conception.
“ so long as we are operating on what is likely”
But we are not so operating – nor should we be so operating, as the record before us was developed under a different standard.
Had the standard been the one you want to use, there is no doubt that the parties would have approached the issue differently and a more complete record would have been developed, which then (and only then) would permit us to postulate as to the point you want to assume.
It is simply unhelpful speculation that you engage in given the circumstances.
Dennis: Up-front, I should note that Mr. Beriont has represented himself pro-se in this litigation and that may have resulted in his eventual loss here.
The fact that Beriont represented himself “pro-se” is the only reason that the case made it this far. The CAFC was bending over backwards for him and acknowledged his pro se status expressly in their previous decision (Lourie dissented that a remand was necessary).
The guy assigned his patent rights to GTE. At worst, GTE was a joint owner of the patent and was entitled to practice the claims to its heart’s content.
This most interesting issue raised by this case, I think, is the use of “pro se” representation as a legal tactic, i.e., if your case really stinks (like Beriont’s case) why not keep the fancy lawyers hidden in the background and make your David versus Goliath fantasy a tad more credible? You might get some sympathy points and you can bleed your target for that much longer.
Agree 100%.
Too fast AAA JJ,
To wit, contrast Malcolm’s “The guy assigned his patent rights to GTE.” with Prof. Crouch’s “By partial-cooperation, I mean that Beriont signed the declaration of inventorship but refused to sign the document assigning rights in the patent to GTE. ”
That’s a bit of a disconnect. I would dare say a material point, even.
From the majority opinion in the earlier case:
It appears that, more than fifteen years before the filing of the application resulting in the ’802 patent, Beriont executed the Assignment Agreement whereby he agreed to “assign and convey to the [GTE Products] Corporation [his] entire right, title, and interest in and to all . . . ideas concepts, inventions, processes, and improvements and all patent applications and patents thereon.” Id.; see Dist. Ct. Ruling, 2012 WL 2449907 at *3. The Assignment Agreement goes on to state that Beriont “understand[s] the expression ‘Corporation’ as used in this agreement includes not only GTE Products Corporation but also its successors…
[O]n inspection of the U.S. Patent and Trademark Office’s (“USPTO”) Patent Assignment Abstract of Title database, we found an assignment by Beriont recorded on February 25, 2002, as executed on January 23, 2002. USPTO Assignment Abstract of Title Database
Reel/Frame No. 012641/0723. This document was entered onto the docket pursuant to a “judgment regarding assignment.”
Now, there might well be something “funny” about these assignments. But they do exist. That’s what I was referring to.
But the nail in the coffin has to be this: Beriont and Bellows both signed a Declaration and Power of Attorney for Patent Application that was submitted to the U.S. Patent and Trademark Office by GTE. J.A. 131. Beriont declared that he was the “Second Joint Inventor”
of the invention described in the application
Mind you, this is *after* Beriont had sued a co-worker and GTE for an unrelated defamation claim (related to an alleged theft by Beriont — wonder how that turned out).
Clearly the majority opinion of the earlier case is not evident in your post, and provides support that was lacking.
However, the “nail in the coffin” is at best a tangent to the point about assignment (and actually leans more towards the portrayal as listed by Prof. Crouch).
As to the unrelated defamation claim – why bother with such dust kicking?
to the unrelated defamation claim – why bother with such dust kicking?
The defamation claim was “unrelated” to the invention at issue in this case but it’s certainly not “unrelated” to the conflict between Beriont and GTE.
If you’ve got a problem with mentioning a fact about the history between the parties, get on the phone and complain to Judges Lourie, O’Malley and Reyna. The brought it up in the second paragraph of their opinion.
[shrugs]
No need to [shrug] as it is entirely not pertinent to our discussion.
[shrugs right back]
Far more pertinent would be an observation such as this:
The value of this patent for GTE is severely compromised with the existence of a hostile co-owner for at least two distinct reasons:
1) a potential licensee can play the two sides against each other in striking a a low rate.
2) enforcement against potential infringers can get complicated because of joinder of all necessary parties and the adverse relationship.
See how that’s done Malcolm?
our discussion.
Get medical help, freak.
Your curt response is not warranted.
Stay focused please.
I’ll agree that going pro se is usually a good way to lose your case, but this wasn’t exactly rocket surgery here. Common sense should tell you that if you say, “That guy wasn’t really an inventor,” and you don’t have anything to back up what you’re saying, then nobody’s going to believe you. The heightened burden of proof in this case just allowed the court to use a more technical reasoning for the dismissal.
Is rocket surgery a new field?
Just asking. 🙂
Take that to the bank and smoke it!
Why don’t you guys just make like a tree and split?
Hey, I thought this was a patent blog. Mixed metaphors is a whole ‘nother kettle of a different color.
The Yogi Berra in me approves.
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