by Dennis Crouch
Krzysztof Sywula’s story has some thematic elements of the Netflix Glass Onion show. As he tells it, Sywula was at the Santorini Island Grill with Alexis DaCosta & Vincent Coletti talking about creating an improved app for ride sharing. During one of the meetings, Sywula apparently sketched-out a diagram on a napkin that he gave to DaCosta and that eventually served as a basis for the patent filings in this case. The parties continued to work together for several more years with Sywula eventually becoming the CTO. Then came the patenting. Sywula was excluded from being listed as an inventor on the patents, including US11087250 and US11087252; and that was upsetting.
Sywula sued for correction of invention, and the District Court initially dismissed the case on standing, but – after an amended complaint – has now agreed that Sywula has met the requirements to survive a pleading-stage demurrer.
Standing to Sue: Federal Courts can only hear “actual cases or controversies.” U.S. Const., Art. III. The Supreme Court has massaged those words in to a three part standing requirement of (1) injury in fact that is actual, concrete and particularized; (2) a causal link between the challenged actions and the stated injury; and (3) identification of a likely mechanism for redressing the injury that is within the court’s power. These are often broken down to (1) injury-in-fact; (2) causation; and (3) redressability.
The First Problem — Assignment of Rights: Sywula signed a Consulting Agreement and an Invention Agreement, both of which promise to assign rights to DaCosta and Coletti or their newly formed company Teleport, including any inventions, trade secrets, discoveries, designs, software, etc., arising from his work on the endeavor. In patent law, inventorship is tied directly to ownership. An inventor is a presumptive owner of any resulting patent rights. However, those inchoate rights are assignable in a way that decouples inventorship and ownership. There result here is that Sywula is not suffering an ownership injury (or any other payment injury flowing from his failure to be named as an inventor). Sywula v. DaCosta, 21-CV-01450, 2022 WL 2959577 (S.D. Cal. July 26, 2022).
The Second Problem — Concrete Reputational Injury: After receiving this first rejection from the district court, Sywula reformed his complaint to claim a reputational injury due to his failure to be listed as an inventor. Here, courts have been somewhat clear that reputational-interest theory cannot be simply tied to a nebulous cloud. The District Court quotes my 2021 article explaining that courts refuse to find Article III standing based simply upon loss of “the dignity of and accompanying self-satisfaction of official inventorship recognition.” Dennis Crouch, Reattribution, The Poison Pill & Inventorship, 5 BUS. ENTREPRENEURSHIP & TAX L. REV. 138 (Fall 2021).
But, the district court concluded that Sywula had done enough to move from nebulous to concrete. In particular, Swyula’s pleading provide a sufficient showing that his career as a software engineer would have been boosted based if he had been properly listed as an inventor. This economic/pecuniary tie-in is what the Federal Circuit looked for in its key decision of Shukh v. Seagate Technology LLC, 803 F.3d 659 (Fed. Cir. 2015). The district court explains:
Sywula adequately pleads he sought employment in the field of his claimed invention. That is, Sywula, a software developer who purportedly architected, developed, and wrote the software for Teleport’s ride-sharing application, alleges he aspired to climb the hierarchical ladder for software developers and obtain a Principal Engineer role. Sywula also adequately pleads Teleport’s omission “affect[ed] his employment” by severely diminishing, if not foreclosing entirely, his opportunity for a promotion to Principal Engineer at Intel. Importantly, he alleges the prospects of his promotion from Software Engineer to Principal Engineer at Intel were not merely illusory or wishful thinking. He claims to have met nearly all of Intel’s experience-and skills-based criteria to be eligible for a promotion. However, he is missing one purportedly crucial qualification: he cannot claim to be an inventor of any patented technology. According to Sywula, “[p]ublished patents are usually required for software engineers to attain higher-ranked roles.” And Intel [his current employer], in particular, considers published patents as relevant to at least three qualities and skills it looks for in prospective Principal Engineers.
Simply put, the Second Amended Complaint contains enough factual material for this Court to infer Defendants’ withholding of inventorship credit in the Teleport patents plausibly diminished or even foreclosed his prospects of career-advancement at Intel and, more generally, in whatever software-developer position he holds or will hold. Hence, Defendants’ omission plausibly strips Sywula of the pecuniary benefits attendant to promotion. Accordingly, Sywula has adequately alleged an economic component to one of his reputational injuries.
Sywula v. Teleport Mobility, Inc., 21-CV-1450, 2023 WL 362504, at *16 (S.D. Cal. Jan. 23, 2023). In its analysis here, the court went somewhat light on the causation element — noting that it is enough that the reputational injury influenced his career trajectory without being the sole cause. The court also accepted a second justification for jurisdiction — Sywula’s failure to obtain a job as a software engineer at Apple could be partially attributed to the fact that he was not listed as an inventor.
Read the Decision: https://patentlyo.com/media/2023/02/Sywula-v.-DaCosta-et-al-Docket-No.-3_21-cv-01450-S.D.-Cal.-Aug-15-2021-Court-Docket.pdf
Note: I don’t think that the napkin is of record yet in the litigation.
Question: Is an inventorship dispute something material to patentability such that should be disclosed to the USPTO under 37 C.F.R. 1.56?
From Teleport’s side, why would they let this happen? A patent without proper inventorship is invalid. Patents may be corrected by a federal court or the USPTO. 35 U.S.C. § 256 (see also 37 C.F.R. § 1.324). See also Checkpoint Systems, Inc. v. All-Tag Security S.A., 412 F.3d 1331, 1340 (Fed. Cir. 2005).
The consulting agreement controls ownership, so Sywula’s interest is properly conveyed to Teleport. Isn’t it in Teleport’s best interest to add Sywula? What am I missing? Having this publicly air is not good for Teleport’s patents.
Relatedly, what are patent counsel’s responsibilities in this kind of situation? I guess counsel usually has no choice but to take whatever representations the client (here, presumably the two named inventors) provides about inventorship at face value, unless something indicates others might somehow be involved with inventorship.
Personally I ask the inventor(s) if there is anybody who wasn’t “listed” (e.g., on an invention disclosure form) or “named” who might be an inventor. If the say “no” I don’t really challenge them. Of course, I explain what constitutes inventorship, but I’m not in the habit of calling my clients liars if they answer “no” to my question. As for the “listed” or “named” inventors I always ask them, in writing (e.g., an email) to read the claims and confirm that they are an inventor or co-inventor of at least one claim. Not sure what more can be done.
That makes total sense to me, thanks.
+1
One item to note: quite often the inventors are NOT my client, but rather, the entity that the inventors work for are my client.
I do explain this to the inventors.
Hypo:
A client comes to me after another company files a patent application listing employees of my client and employees of the other company as joint inventors. The other company listed themselves and my client as joint applicants. Aside from whether the other company was even authorized to file a patent application, my client’s view was that the employees of the other company had no inventive contribution in any of the claims. My client gains control of the application (straight out assignment of the patent application from the other company). My client now wants to delete the other company’s employees as inventors. My view is that my client is free to do so as long as there is no deceptive intent because my client views that the claims only cover inventive contribution from their employees, and there is no inventive contribution (as currently claimed) from the other company’s employees.
Throw a twist (wrench) into your hypo:
A prior listed inventor of other company squawks that he was not consulted by other company in the assignment process, claims he invented more than what other company was giving him credit, has started his own company and wants to fight over prosecution. Clearly he disagrees with your client as to inventorship and is willing to burn everything down if he does not get his way.
This is where the patent litigators come in.
By the way, I’m not sure what the former employee of the other company can do to stop from being de-listed as an inventor on the application while the application is pending before the USPTO. The assignee files the amended ADS removing the former employee as an inventor. The former employee can’t intervene.
Question: Is an inventorship dispute something material to patentability such that should be disclosed to the USPTO under 37 C.F.R. 1.56?
Are you thinking of (c) or another section of 1.56?
I’m not sure if this answers the question directly, but misjoinder of inventors can be grounds for inequitable conduct if the named inventors have deceptive intent. See the linked article below and the cited cases.
link to finnegan.com
Kotodama – did you read the article you provided? AIA removed the ‘deceptive intent’ part — as stressed in the article.
Yes, I sure did. But did you? If so, then you probably would have seen this passage:
“Cases involving deceptive intent on the part of the named inventors (including cases involving misjoinder) fall under the rubric of inequitable conduct, and as such, the challenging party bears the burden of proving deceptive intent by clear and convincing evidence.”
From this, I take it an infringement defendant can allege inequitable conduct based on an unnamed inventor’s existence was concealed from the USPTO. The defendant would ultimately have to show the named inventors’ deceptive intent, but that’s par for the course because deceptive intent is a basic element of inequitable conduct.
However, the deceptive intent aspect you mention—that you correctly note was abolished in AIA Section 256—relates to (1) a correction of inventorship action (2) brought by a putative inventor (3) where the inventorship to be corrected involves the putative inventor’s omission from patent.
Bottom line, you and I are on different subjects. I’m discussing inequitable conduct based on things material to patentability—in response to your question. You’re bringing up correction of inventorship.
My original point was, if deceptively concealing inventors from the USPTO can later form the basis for an inequitable conduct claim, it stands to reason that all proper inventors should be disclosed to the USPTO in the first place.
Based on things material to patentability…
Hmm really? Which section of the code for that? (Hint: it’s not in (a)).
1.56(a) . . . Each individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the Office, which includes a duty to disclose to the Office all information known to that individual to be material to patentability as defined in this section. . . .
You reference an answer to a question involving what is material to patentability with a section that says defining material to patentability is in later sections…
Did you mean to do that?
Congrats, Prof. C, on the district court’s attribution of your article on attribution.
Also, just to clarify, Sywula’s allegations of reputational injury under Shukh were in his previous complaint too, which the court dismissed. The difference this time was Sywula included more details of the injury in the latest complaint, which as you noted are now sufficient to bestow standing.
Finally, I note the court has now rendered two motion to dismiss rulings, which combined total over 60 pages. But in neither instance did the court hold oral argument—everything’s been decided just on the papers. I wonder how often that kind of thing happens.
Seems very normal. Some district courts never hold hearings on motions to dismiss. Others do. Sometimes it’s dependent on the particular judge.
“was went”
This economic/pucinary tie-in is what the Federal Circuit looked for…
Do you mean “pecuniary”?
Thanks!
“Pucinary” may not be a word, but it totally should be.
Ah, is this another Glass Onion allusion? Brilliant. I did not catch that until you mentioned.
LOL Thanks!
That would be amusing, given that the character shown (played by Edward Norton) liked to make up words and phrases.
Pucinary (adj.): Of, or relating to, turn-of-the-century Italian opera.
Is it not PC to say something about when it’s not over until a certain described person sings?
Comments are closed.