Tag Archives: inventorship

Federal Circuit: An Author is not an Inventor (And Thus, a Claim of “Authorship” Does Not Raise an Inventorship Dispute).

Patent,

By Dennis Crouch

StoneEagle Services v. Gillman and Nextpay (Fed. Cir. 2014)

This case offers an important reminder that patent ownership is largely a matter of local law – be it state or foreign-national. The result is that disputes over ownership (as opposed to inventorship) do not raise a federal cause of action. Here, the DJ plaintiff also pled inventorship (normally a federal claim under 35 U.S.C. §256), but that claim failed to keep the case in Federal Court because there was no actual dispute over inventorship. From an academic standpoint, the case is also interesting based upon the Federal Circuit’s conclusion that a claim of “authorship” is nothing like a claim of “inventorship.”

Partnership with Joint Ownership: Several years ago, David Gillman collaborated with Bobby Allen (StoneEagle’s CEO at right) on a project to convert StoneEagle’s automotive industry electronic payment system into one that would also work to process health care claims. The subsequent patent application named only Allen. U.S. Patent No. 7,792,686. According to the documents, Gillman has never claimed to be a co-inventor of the ‘686 patent. However, based upon the collaboration agreement, Gillman was a 50% owner of the patent application. Gillman did eventually assign his rights in the application to StoneEagle.

The dispute arose when Gillman later declared at a meeting that he held ownership rights and that the patent documents were on his PC. According to the complaint “Gillman suddenly and falsely claimed that it is his patent, that he wrote the patent, that it is on his computer, and that he ‘authored’ or ‘wrote’ it, or words to that effect.’ Gillman allegedly threw down his business cards and left the meeting.”

StoneEagle then sued for declaratory judgment that it was sole owner and that Allen was the sole inventor. In addition, the lawsuit alleged a variety of state law trade secret and contract claims. The district court issued a preliminary injunction against Gillman on the trade-secret and contract claims that gave Gillman the immediate right to appeal.

The declaratory judgment act provides that

In a case of actual controversy within its jurisdiction . . . any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration . . .

28 U.S.C. §2201. The Supreme Court broadly interprets the DJ act has extending to the constitutional limits of Article III jurisdiction. Thus, “the facts alleged, under all the circumstances, [must] show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” MedImmune. Here, Gillman’s attorney basically admitted that an actual case-or-controversy exists between the parties, but that controversy is over a state-law-claim of ownership and the DJ statute requires a case-or-controversy over an issue “within [the federal court’s] jurisdiction.”

In reading StoneEagle’s complaint here, the Federal Circuit found that the pleading lacks sufficient allegations of a controversy concerning inventorship.

[J]urisdiction in this case turns on whether StoneEagle’s complaint alleges a sufficient controversy concerning inventorship. It does not. . . . As StoneEagle’s only factual allegations concerning inventorship are that Gillman authored the patent application, the complaint, viewed in its totality, has not alleged a controversy over inventorship that satisfies Article III.

On remand the case will be dismissed and perhaps re-filed in Texas state court.

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The case has some interesting discussion of the role of patent attorneys in this process. Here, Gillman (a non patent-law professional) had drafted the patent application at issue. At oral arguments, Judge Rader noted that, although only certain folks are allowed to actually file a patent application with the USPTO, “anyone can help write it.” The decision then goes into some detail on how a patent drafter should not be considered an inventor:

In this case, the most favorable inference from the record in favor of StoneEagle shows only that Gillman assisted in constructively reducing an invention to practice. See Solvay S.A. v. Honeywell Int’l, Inc., 622 F.3d 1367, 1376 (Fed. Cir. 2010). Those activities confer no more rights of inventorship than activities in furtherance of an actual reduction to practice. Otherwise, patent attorneys and patent agents would be co-inventors on nearly every patent. Of course, this proposition cannot be correct.

No inventing happens by scriveners who merely write down the invention.

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In part, this decision turns on the Federal Circuit’s knowledge that copyright law is very different from patent law, although both arise from the same Constitutional provision, “authors” get copyright and “inventors” get patent. Although the court understands this distinction quite well, most people do not. On at least a weekly basis, I talk with incredibly intelligent people who get confused over the differences and their importance. [Note here – Monday’s Supreme Court oral arguments]. It looks like the DJ plaintiff could have done a much better job of providing evidence alerting the court to this real-world fact that people are confused on this topic and that Gillman’s claim of authorship was reasonably understood by folks in the room as a claim of inventorship.

 

Federal Circuit Rejects Supreme Court Original and Exclusive Jurisdiction over State-vs-State Inventorship Disputes

Patent, , , , , , ,

By Dennis Crouch

A highlight of this opinion is Footnote 1 of Judge Moore’s dissenting opinion that states “The majority baldly asserts that issues of patent ownership and inventorship are not sufficiently grand for the Supreme Court to resolve in the first instance. That is not our decision to make. It is for the Supreme Court to itself decide.”

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University of Utah v. Max-Planck-Gesellschaft (Fed. Cir. 2013)

In 2011, University of Utah (UUtah) filed a federal lawsuit under 35 U.S.C. § 256 to correct the inventorship of U.S. Patent No 7,078,196. That patent is directed to Small Interfering RNAs (siRNAs) and methods of creating those molecules that are the current study of intensive genetic therapy research.

According to USPTO records, the patent is owned collectively by the Max-Planck Institute as well as MIT, the Whitehead Institute and the University of Massachusetts. Dr. Brenda Bass – a UUtah professor – alleges that Dr. Thomas Tuschl – a UMass Professor – incorporated her ideas into his patent but then did not name her as an inventor. All of these assignees were named as defendants in the complaint filed in Federal District Court.

The appeal raises interesting issues of civil procedure, federalism, and sovereign immunity. The 11th Amendment to the U.S. Constitution generally provides sovereign immunity to state governments from any cause of action in Federal Court brought by citizens of another state or country. However, the 11th Amendment does not provide for immunity in state-vs-state actions. Rather, the U.S. Constitution provides that “In all [Federal] Cases . . . in which a State shall be Party, the supreme Court shall have original Jurisdiction.” Art III, §2, cl. 2. Following the constitutional guidance, the jurisdictional statutory code provides that the “Supreme Court shall have original and exclusive jurisdiction of all controversies between two or more States.”

Rather than fighting the battle in District Court, UMass (a state institution) argued that the case brought by UUtah (another state institution) should be seen as a state-vs-state conflict that should go directly to the Supreme Court in the matter of first instance.

In order to avoid that result (but still reach the same result), UUtah dropped UMass as a defendant and instead list the leaders of UMass (including its president Robert Caret) as the defendants. Based upon that change, District Court Judge Saris held that the case should no longer be seen as a state-vs-state case and that, as a consequence, the Supreme Court did not have exclusive original jurisdiction. Judge Saris also found that correction of inventorship was not a “core sovereign interest sufficient to make this a dispute between States,” but that the case could proceed against the named officials under the Ex parte Young doctrine. Particular to this case is that the remedy demanded was an order directing the USPTO to correct inventorship rather than calling for any monetary or injunctive relief against the state.

Although the district court case is not final, the Federal Circuit took an immediate appeal under the Collateral Order Doctrine.

On appeal, the Federal Circuit has affirmed – finding that “UMass is not a real party in interest under the Supreme Court’s caselaw.” Although both the Constitution and Statute appear clear, the US Supreme Court has been reluctant to take cases such as this and has thus added requirements that the case be “serious,” “dignified,” and raising “important” federalism concerns. In addition, the Supreme Court has considered whether there are other avenues for relief. And, both of the competing states must be indispensable parties to the lawsuit.

On this notion, UMass argues that UUtah is seeking the property of UMass (i.e., its patent) and that is sufficient to make UMass a real party that cannot be “plead around.”

Agreeing with UMass, the Federal Circuit instead held that the case is about “inventorship” and the identity of the individual inventor of a patent is not a “core sovereign interest” that need be raised directly to the Supreme Court. In addition, the Federal Circuit agreed that the formal shift from suing the University to suing the University President in his Official Capacity was sufficient to evade the state-vs-state setup. Finally, the appellate panel found that UMass (a patent owner) is not an indispensable party to the case since its interests are being adequately protected by the other co-owners and its named officials.

In reality, UUtah UMass [Updated] likely does not want the Supreme Court to directly hear the case. Rather, the strategy here is that the University is largely betting on the likelihood that the Supreme Court would decline to exercise jurisdiction – effectively ending the case.

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Writing in Dissent, Judge Moore vigorously disagreed with the majority’s holding.

The majority erroneously holds that a patent-ownership dispute between two state universities is not a “controversy between two or more States.” It then compounds this error and holds that a patent owner is not an indispensable party to an action that seeks to reassign title to the patents-in-suit. I respectfully dissent.

I. Subject Matter Jurisdiction

The district court lacks jurisdiction over UUtah’s claims against the UMass Officials because those claims raise a dispute between two States, Utah and Massachusetts. Article III of the U.S. Constitution vests the Supreme Court with original jurisdiction over cases in which a State is a party. As § 1251(a) expressly states: “The Supreme Court shall have original and exclusive jurisdiction of all controversies between two or more States.” There is no dispute that UUtah and UMass are instruments of Utah and Massachusetts, respectively, and that a suit between those institutions could only be brought in the Supreme Court. The majority, however, concludes that § 1251(a) does not apply here because UUtah elected to sue the UMass Officials rather than UMass. That conclusion is incorrect.

To determine if a suit implicates the Supreme Court’s exclusive original jurisdiction, we look “behind and beyond the legal form” of the claim and determine “whether the State is indeed the real party in interest.” Arkansas v. Texas, 346 U.S. at 371. The majority agrees with this general proposition but holds that the UMass Officials, not UMass, are the real parties in interest. I disagree.

This case involves a dispute between UMass and UUtah over who owns the rights to the Tuschl II patents. UMass is the assignee of the Tuschl II patents and UUtah “wants to own the patents.” UUtah is pursuing that interest through a correction of inventorship claim under 35 U.S.C. § 256 and a corresponding request for an order that UUtah owns the patents. … UUtah also alleges in its complaint that it “should be the sole owner or an owner” of the Tuschl II patents. It specifically requests that the court “order assignment of all right title and interest” in the patents to UUtah. Indeed, the majority recognizes (1) that UUtah specifically requested that the court assign it all rights to the Tuschl II patents and (2) that UUtah will obtain the rights to the patents if it prevails on its correction of inventorship claims. This is a dispute about ownership, plain and simple.

UUtah cannot recast the nature of this dispute by suing the UMass Officials as stand-ins for UMass. Indeed, the majority never holds that the UMass Officials have any interest in this proceeding. Nowhere does the majority suggest that the UMass Officials are “parties concerned” that may be subject to a correction of inventorship action under § 256(b). . . .

Section 1251(a) contains “uncompromising language”: the Supreme Court has original and exclusive jurisdiction over “all controversies between two or more States.” Mississippi v. Louisiana, 506 U.S. 73, 77, 113 S.Ct. 549, 121 L.Ed.2d 466 (1992). The majority errs when it concludes that § 1251(a) does not apply to this dispute because the “State has no core sovereign interest” in inventorship or patent ownership. Maj. Op. at 13–15. The majority’s “core sovereign interests” test is at odds with the plain language of the statute, which contemplates “all controversies” between states fall within 1251, not just those involving core sovereign interests. There is simply no basis to limit the statute in such a way.

Moreover, requiring a core sovereign interest to implicate the Supreme Court’s exclusive jurisdiction erodes the Court’s discretion to decide which controversies it will hear. The existence of the Supreme Court’s exclusive jurisdiction and its discretion to exercise that jurisdiction are separate concepts. The Court’s exclusive original jurisdiction extends to “all controversies between two or more States.” 28 U.S.C. § 1251(a). The Court, however, is not required to exercise its jurisdiction over every controversy. The Court tends to exercise its jurisdiction sparingly, depending upon the nature of the interest of the complaining State, the seriousness and dignity of the claim, and the availability of another original forum to resolve the dispute. Mississippi v. Louisiana, 506 U.S. at 76–77. The concept of a “core sovereign interest” has roots in opinions that address whether the Supreme Court will decide to exercise its jurisdiction over a dispute, not whether the Court’s exclusive original jurisdiction over the controversy exists. See id. at 77; Texas v. New Mexico, 462 U.S. 554, 570, 571 n. 18, 103 S.Ct. 2558, 77 L.Ed.2d 1 (1983); Connecticut ex rel. Blumenthal v. Cahill, 217 F.3d 93, 109 (2d Cir.2000) (collecting cases). The majority’s conflation of those two concepts strips the Supreme Court of its discretion to decide if a case is sufficiently serious to exercise jurisdiction over it. It reallocates that power to the lower courts—who will decide which subset of cases—those implicating core sovereign interest—will be presented to the Supreme Court. FN1

The majority finds support for its decision in the Second Circuit’s split decision in Cahill. With all due respect, even if we adopt the flawed logic of the majority in Cahill, this case would still fall within the Supreme Court’s exclusive jurisdiction in § 1251. The majority correctly recognizes that, generally, a State is the real party in interest if ” the effect of the judgment would be to restrain the Government from acting, or compel it to act.” Maj. Op. at 14 (quoting Cahill, 217 F.3d at 106). But the majority nevertheless concludes that UMass is not the real party in interest because a judgment to correct inventorship “will not require or restrain UMass from acting.” Id. at 13. This is not correct.

A judgment in UUtah’s favor will restrain UMass’s ability to act. If successful, UUtah will be declared sole owner of the Tuschl II patents and UMass will have no interest in them. UMass will not be able to license or assign the patents. And UUtah will be able to exclude UMass from practicing the inventions claimed in the patents. Patent rights are the quintessential right to restrain. The effect of this judgment will be to prevent UMass from exploiting the Tuschl II patents or the technologies they cover. This certainly “restrain[s] the Government from acting.”

UUtah alternatively requests that Dr. Bass be found to be a co-inventor. A finding that Dr. Bass is a co-inventor of the Tuschl II patents will result in UUtah co-owning those patents. The effect of the judgment would be that UUtah could practice or license the patents without UMass’s consent and without having to account to UMass. See 35 U.S.C. § 262. The judgment would thus restrain UMass from asserting its rights in the Tuschl II patents against UUtah or any of UUtah’s licensees. Again, this restrains UMass from acting.

The majority ignores these effects on UMass. Without explanation, the majority asserts that UMass will only be “more or less affected by the decision” and that transfer of the Tuschl II patents to UUtah will “not deplete the state treasury.” Maj. Op. at 15. This is incorrect. A correction of inventorship by the PTO will give UUtah an ownership interest in the Tuschl II patents by operation of law and dilute or revoke UMass’s property interest. Indeed, as the majority also recognizes, UUtah expressly asks the court to order the reassignment of the patents to UUtah. The central effect of a judgment in UUtah’s favor will be to deplete the assets of the current owners of the Tuschl II patents, one of whom is UMass. UMass is thus the real party in interest in this case.

This is a dispute between two state universities over who owns a valuable patent portfolio—a dispute over property ownership. As undesirable as it may be, we are bound to follow the plain language of § 1251(a): “The Supreme Court shall have original and exclusive jurisdiction of all controversies between two or more States.” It is up to the Supreme Court to decide if it wants to exercise its exclusive jurisdiction over this controversy. We should not contort the statute to avoid a perceived injustice FN2 that would result if the Court declined to exercise jurisdiction over UUtah’s claims.

UUtah initiated an action that seeks to obtain UMass’s interest in the Tuschl II patents. That is a controversy between two States and can only be brought in the Supreme Court. Accordingly, we should reverse the district court’s decision that it had jurisdiction over UUtah’s claims against the UMass Officials.

II. Indispensable Party

The majority’s holding that UMass is not an indispensable party to this action is incorrect. We have held that when a plaintiff brings a declaratory judgment action seeking to invalidate a patent or hold it not infringed, the patentee is both a necessary and indispensable defendant in that action. A123 Sys., Inc. v. Hydro–Quebec, 626 F.3d 1213, 1217–19, 1220–22 (Fed.Cir.2010); Enzo APA & Son, Inc. v. Geapag A.G., 134 F.3d 1090, 1094 (Fed.Cir.1998). It would be nonsensical to suggest that all patent owners must be joined in a suit seeking to invalidate the patent, but they need not be joined in a suit over patent ownership. Indeed, § 256(b) requires a court, before it orders a correction of inventorship, to provide “notice and hearing of all parties concerned,” i.e., those with an “economic stake” in the patent. Chou, 254 F.3d at 1359–60. We should apply our general rule that all co-owners must be joined in an action that affects their patent. See Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456, 1467 (Fed.Cir.1998).

The majority instead holds that UMass is not an indispensable party because UUtah joined “all of the Tuschl Patent owners except UMass,” each of whom are “jointly represented by legal counsel.” Maj. Op. at 21. It is not enough that UMass and the named defendants “share the same overarching goal” of defeating UUtah’s inventorship and ownership claims. A123 Sys., 626 F.3d at 1221 (holding that absent patentee was an indispensable party when the named party had “overlapping” but not “identical” interests).

The majority deviates from our longstanding requirement that all patent owners be joined, citing an exception created in Dainippon Screen Manufacturing Co. v. CFMT, Inc., 142 F.3d 1266 (Fed.Cir.1998). It is true that, like Dainippon Screen, the named defendants here are represented by common counsel. But the majority omits the “highly relevant” facts from Dainippon Screen—the absent party was a wholly-owned subsidiary of the named party and was created by the named party to enforce the patents-in-suit. 142 F.3d at 1267–68, 1272–73. We allowed the suit to go forward because “the parties’ interests in the asserted patents were not just common, but identical.” A123 Sys., 626 F.3d at 1221 (discussing Dainippoin Screen ).

There is no party in this suit which represents UMass’s interest in the Tuschl II patents. Other defendants also have an interest in the patents, but they do not represent UMass’s interest. Indeed, their interests may well diverge. For example, the non-UMass defendants may choose to settle with UUtah in a way that diminishes UMass’s rights, such as stipulating that Dr. Bass is the sole inventor of the Tuschl II patents in exchange for ownership interests in the patents. That risks extinguishing UMass’s rights to the patents without UMass participating in the lawsuit.

The majority further claims that defendant Alnylam can represent UMass’s interest because UMass “handed sole and exclusive control of this suit over to Alnylam.” Maj. Op. at 21. That right, however, is conditional. If there is a conflict of interest, Alnylam loses its right to control UMass’s defense. Id. The agreement thus contemplates that Alnylam and UMass may not have identical interests. Because UMass does not have identical interests with any of the named defendants, it is an indispensable party in this case. I dissent from the majority’s contrary holding.

Inventorship: Limits of Collaboration

Patent

By Dennis Crouch

Rubin v. General Hospital Corp (Mass. General) (Fed. Cir. 2013)

Back in 2000, Dr. Rubin and his team identified an IKAP Gene mutation as causing a syndrome known as Familial Dysautonomia. Rubin sent his article to the American Journal of Human Genetics who forwarded the abstract to Dr. Gusella at Mass General for peer-review. Dr. Gusella then filed a provisional patent application in January 2001 shortly before Rubin’s article published. Gusella’s team had been working on the same genetic problem as Rubin (that’s why the journal sent him the article for review). Interestingly, Rubin particularly actually asked the journal not to send it to Gusella because of the lab-lab competition, but the journal sent it anyway.

After Gusella’s patent issued Rubin sued under 35 U.S.C. §256 – asking that Rubin be added as a joint-inventor. 35 U.S.C. §116 roughly defines joint inventorship as “when an invention is made by two or more persons jointly.” The statute makes clear that the two individuals do not need to “physically work together or at the same time,” “make the same type or amount of contribution,” or contribute to “every claim of the patent.” Still, the statute requires they acted “jointly.”

The district court dismissed the case on summary judgment – holding that there was no evidence of collaboration between Rubin & Gusella as required for joint infringement.

On appeal, the Federal Circuit affirmed – holding that “the independent relationship between these teams of scientists, and the nature of this communication of information, do not support joint invention in accordance with §116, or warrant change or substitution of inventorship under §256.” The non-precedential opinion by Judge Newman is short on analysis and does not contend with the controlling precedent of Kimberly-Clark Corp. v. Proctor & Gamble Distributing Co., 973 F.2d 911 (Fed. Cir. 1992). In that case, the court identified one form of joint inventorship “such as collaboration or working under common direction, one inventor seeing a relevant report and building upon it or hearing another’s suggestion at a meeting.” See also Mueller Brass v. Reading Industries, 352 F. Supp. at 1357 (E.D. Pa. 1972).

Can you Wait 20-Years to Challenge Inventorship?: In this case, Yes

Patent,

by Dennis Crouch

Pei-Herng Hor and Ruling Meng v. Ching-Wu "Paul" Chu (Fed. Cir. 2012)

Sometimes I'm surprised that there are not more inventorship disputes. But, the rise in power of HR managers in most corporate settings has helped to lock-down rights through initial employment or consulting contracts. On the other hand, the loose liberalism of the university setting continues to create problems on this front. One element that adds complexity for universities is that, in most cases, universities provide a percentage of any patent-related revenue to the inventors – in this case 50%. For the most part, major US corporations do not use that approach.

This dispute stems from the work of award winning and highly regarded University of Houston Professor Paul Chu. The superconductor innovator (Chu) is listed as the sole inventor of U.S. Patent Nos. 7,056,866 and 7,709,418, but his former assistants (Hor and Ming) argue that they should also be listed as co-inventors. The original applications were filed in 1987 and 1989 and did not issue until 2006 and 2010 respectively. The bulk of the long prosecution was occupied by an interference proceeding in the '418 case that was eventually resolved in Chu's favor. During that time, the original application was also put on hold pending the outcome. The interference was prompted by a former Chu lab assistant who had by then moved to the University of Alabama.

The patents cover a super-conducting material that does not require liquid nitrogen coolant. So far, the patents have netted $680,000 based upon a DuPont option on the patent. UH gave half of that money to Chu who, in turn, distributed about $140,000 to the lab assistants, including Hor, Meng, and the Alabama Elephant. Apparently those few thousand dollars were not enough.

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35 U.S.C. §256 implicitly provides the basis for a federal court action to correct the inventor inventorship. Hor filed his complaint in 2008 and Meng joined the action in 2010. However, the district court dismissed the case as barred by laches since those parties should have known for a long time that they were not named inventors on the patent application.

On appeal, the Federal Circuit has rejected the lower court's decision on laches – holding that the period for laches for a section 256 inventorship action cannot begin to run until the patent-in-question actually issues even if "the omitted inventors knew or should have known prior to patent issuance that their names were omitted."

The lower court also held that the action was barred by equitable estoppel. On appeal, the Federal Circuit also rejected the equitable estoppel claim because it had been raised sua sponte by the lower court and without notice to the parties. On remand, the court will need to more fully develop the law of equitable estoppel as it relates to this dispute – of interest will be whether the court applies Texas law of equitable estoppel or else some federal patent law version of the doctrine.

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The majority decision was written by Judge Prost and joined by Judge Newman. Judge Reyna wrote a concurring opinion that agrees with the statutory interpretation of Section 256 but argues that the statute is poorly drafted. Judge Reyna argues that a better approach would encourage the alleged co-inventors to take action under Section 116 to correct the inventorship during prosecution of the application. The weight of Judge Reyna's argument may well be determined based upon how the lower court rules on the equitable estoppel claim and whether that doctrine serves as a sufficient substitute for laches.

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We have had something of a shift in the culture of inventorship in the 25 years since Chu filed his original application in 1987. Back then, the vast majority of patent applicants listed only one inventor as "the inventor." Today, most new applications at least two inventors. And, in highly-scientific fields such as Dr. Chu's, the number of inventors-per-application is even higher. A key question to be discerned is whether the difference between then and now reflects differences in the process of inventing or rather does it reflect a difference in how we identify inventors. If filing his Reardon metal patent today, perhaps Hank Rearden would have included co-inventors. One element of American ethos is steeped in the idea and ideal of rugged individualism. As President Obama's recent public statements to the contrary are absorbed into our culture, I expect that our notion of inventorship will continue to shift as well.

The Removal of Section 102(f)’s Inventorship Requirement; the Narrowness of Derivation Proceedings; and the Rise of 101’s Invention Requirement

Patent, , , , ,

By Dennis Crouch (October 5, 2012)

In a prior Patently-O essay, I wrote that the removal of the inventorship requirement of Section 102(f) opens the door to patenting obvious variants of inventions created by someone else. In that essay, I mentioned the newly designed derivation proceedings, but opined that they would not be much use in this situation. I wrote that "it appears to me that those actions (even if timely filed by the originator) would be unsuccessful because derivation proceedings are limited to cases where the derived claims are "substantially the same" as the originator's innovation. The substantially the same limitation is much narrower in scope as compared with the potential wide variety of obvious variants." 102(f) Essay.

I received a response to that essay from Professor Sarnoff who reports that he and Chico Gholz have a soon-to-be-published article in IP Today addressing the PTO's new rules for triggering derivation proceedings. The punch line of their article is that the legal scope of derivation proceeding is even narrower than I suggested—thus allowing for a third party to patent quite minor variations of ideas obtained from someone else. (I encourage you to read the article once it is published.)

The America Invents Act of 2011 (AIA) entirely rewrote the section 135 of the patent act. That provision previously detailed the interference process and now focuses exclusively on derivation proceedings as they will apply to patent applications filed on or after March 16, 2013. New section 135(a) limits derivation proceedings to instances where an alleged wrongdoer files an earlier patent application "claiming" the original inventor's (but late filer's) "claimed invention." In their article, Gholz and Sarnoff correctly argue that there is not much room for variation here. Under the statute, the derived invention (as claimed) must be for the same subject matter as the original invention (as claimed), even if their language differs. This further confirms what I see as the problematic naming of "derivation proceedings." In my mind, the meaning of the word derivation suggests some amount of modification. While a derivation depends upon having an original source, the final results are ordinarily a modification of that source. With Gholz-Sarnoff, we learn that this ordinary meaning does not fit to the Derivation Proceedings as defined by the AIA. A better term for the AIA defined action might be "False Inventorship Claim Proceeding."

Gholz and Sarnoff recognize that the PTO took a different view when it codified the rules at 37 C.F.R. §42.405(a)(2). That provision broadly authorizes derivation proceedings when the petitioner's claims are "substantially the same" as the alleged deriver's claims, with "substantially the same" defined in 37 CFR 42.401 as "patentably indistinct." Gholz and Sarnoff argue that the PTO is wrong in this interpretation and that the Federal Circuit will eventually overrule the PTO's misapplication of the law.

Further, as noted by Sarnoff in his Patently-O article and as reiterated in the new Gholz-Sarnoff article in response to the views of Armitage, the original inventor may not have conceived of the obvious variant and thus may not be able to provide the required oath in regard to the obvious-variant claim so as to trigger the derivation proceeding.

In our prior e-mail communications (repeated here with permission), Sarnoff has also explored other ways to block patenting of the obvious variants. He writes:

  1. A person who conceives of an obvious variant is normally treated as an inventor of an invention (just of an obvious one), so lack of inventorship under Section 101 may not be a successful approach to invalidating the claim made by the deriver, although the deriver will likely be entitled at least to joint-inventor status; and
  2. Current inventorship law may not necessarily treat the originator of the underlying invention as a joint-inventor of the obvious variant of which the originator did not conceive, even if the originator added a significant contribution to conception by the deriver, and thus it may not always be possible to correct inventorship to permit the originator to obtain joint inventor status and joint ownership of the obvious variant.
  3. However, the courts have sometimes extended unpatentability to obvious variants even when the statute does not clearly provide for it, as they did in In re Foster, 343 F.2d 980 (C.C.P.A. 1965) (extending Section 102(b) to claims that were obvious in light of statutory bar art). [Note, this explains Professor Sarnoff's prior equivocation that I discussed here. DC.]

The bottom line here that I began with my recent essay and continue with this additional discussion revealed by Gholz and Sarnoff is that the elimination of section 102(f) and the narrow scope of derivation proceedings have created a potential problem by offering a roadmap for bad behavior. The law now apparently sanctions the patenting of minor variations of innovations created by someone else. This raises several levels of concern. Most directly, we are concerned about (1) how the obvious variant patent negatively impacts the idea originator and (2) how the obvious patent burdens the public who must either license or avoid infringement.

The current law basically places the burden on the idea originator to protect his or her rights by (1) keeping the idea secret and then relying on contract and trade secret law to protect that secrecy; (2) quickly filing for patent rights; or (3) quickly going public with the idea in a way that creates prior art. Any of these overlapping choices can be sufficient to block or invalidate an obvious variant patent. I am also not overly concerned that this approach unduly shifts a burden to the idea originator. My problem with that approach – as suggested by Anon – is that the idea originator might not be proactive enough to take the actions necessary to protect the public's interest in not being burdened by patents covering obvious innovations.

New Pressure on Section 101: This whole scenario then puts tremendous pressure on courts (including the Supreme Court) to expand the powerful (but ungainly) tool of 35 U.S.C. § 101 and use that fundamental statute to block these derived variant patents that are not otherwise prohibited by statute. The Supreme Court is unlikely to stand for the patenting of obvious variants of ideas derived from another. And, the most straightforward way for the court to act is with the return of something akin to the invention requirement that was thought to have been eliminated by the 1952 Patent Act. That action would likely add steel to the link between newness and subject matter eligibility in a way that many of us see as problematic. (Perhaps under the framework of "inventive contribution.") The better approach is a statutory change that shifts rights with fewer ripple effects.

Sarnoff's perspective is that Section 101 should have an active and engaged role in the patent eligibility doctrine. In his recent article on the post-1952 invention requirement, Sarnoff writes (with apologies to Dr. Strangelove): "[T]o those who believe in using private property to motivate creative advance, using eligibility determinations to restrict access to the patent system is the bomb that threatens our future viability. For the reasons discussed [in the article], I believe we need to learn to stop worrying and to love that bomb." Joshua Sarnoff, Patent Eligible Inventions after Bilski: History and Theory, 63 Hasting Law Journal 53 (2011).

Notes:

  • In addition to raising this interesting topic, I should (and do) also thank Gholz and Sarnoff for their editorial suggestions on this essay.

With 102(f) Eliminated, Is Inventorship Now Codified in 35 U.S.C. 101? Maybe, but not Restrictions on Patenting Obvious Variants of Derived Information.

Patent, , ,

By Dennis Crouch

Before the America Invents Act (AIA), the Patent Act included a specific prohibition on patenting something the purported inventor did not actually invent. According to the statute, “[a] person shall be entitled to a patent unless … 102(f) he did not himself invent the subject matter sought to be patented.” 35 U.S.C. § 102(f) (pre-AIA). When that provision was eliminated, Congress was assured by various parties that the inventorship requirement was sufficiently protected by the U.S. Constitutional reference to “inventors” and by the “[w]hoever invents or discovers” preamble of 35 U.S.C. § 101. This position is exemplified by Joseph Matal in his recent article on the creation of the AIA.

Some may think that, because § 102(f) has been repealed, there is no longer any legal requirement that a patent for an invention be obtained by the inventor. Not so. Both the Constitution and § 101 still specify that a patent may only be obtained by the person who engages in the act of inventing. Indeed, even commentary on the 1952 Patent Act noted, with respect to § 102(f), that “[t]his paragraph is perhaps unnecessary since under § 101 it is ‘Whoever invents …’ who may obtain a patent and later sections provide that the inventor must apply for the patent and execute an oath of inventorship.”

Joseph D. Matal, A Guide to the Legislative History of the America Invents Act: Part I of II, 21 FED. CIR. B.J. 435 (2012).

To be clear, even under this duplicative construct we should recognize that Section 102(f) does have the important effect of eliminating 102(f)/103 prior art defined by the 1997 OddzOn Prods decision. The 102(f)/103 scenario is probably best termed a “derived knowledge” situation that occurs when an applicant learns of an invention created by someone else and then comes-up with an obvious variant of that invention. Under pre-AIA law, the resulting patent would properly be invalidated on 102(f)/103 obviousness grounds even if the prior-invention had never been made public or the subject of a sale. By removing 102(f), the AIA also removes the prospect of 102(f)/103 prior art. In his AIA article, Robert Armitage writes “subsection [102(f)] had become, as far as the courts were concerned, a prior art provision for assessing obviousness.” Understanding the America Invents Act its Implications for Patenting, 40 AIPLA Q.J. 1 (2012). Armitage explains why the change is particularly fitting as part of the move-towards transparency embodied by the AIA first-to-file rules.

Moreover, putting a “prior art” provision of pre-AIA § 102(f) ilk into the new law would have undone the transparency/objectivity reforms that its elimination by the AIA worked to perfect. Congress simply rejected the notion that every individual named as an inventor on a patent application should be queried to determine what secret or private information the inventor was already aware of, from the work of someone else, at the time the invention was made by that individual. Congress rejected the notion that the inventor’s private knowledge learned from others should then be provided to patent examiners to determine whether the inventor’s claimed invention could be nonetheless regarded as “obvious” (perhaps in combination with other prior art).

Armitage at 98. Armitage and Matal were both instrumental in the development and passage of the AIA. Their well written articles explain the choices made in the AIA legislation and attempt to explain their visions for how ambiguities should be interpreted. Professor Sarnoff agrees with Armitage here that the AIA removes knowledge that a putative inventor obtained from another is no longer prior art. In his Patently-O Patent Law Journal Article, Sarnoff wrote:

By eliminating existing § 102(f), the new act removes the substantive prior art basis that used to prevent patents on derived inventions that are the same as or obvious in light of the derived knowledge. Because § 102(f) was treated as prior art for obviousness, it provided substantive grounds for denying or invalidating patents on obvious variants of a derived invention (e.g., applications or improvements of, or additions to or modifications of, a derived invention) as well as to the derived invention itself.

Joshua D. Sarnoff, Derivation and Prior Art Problems with the New Patent Act, 2011 Patently-O Patent Law Journal 12.

Sarnoff absolutely agrees with Armitage that the law will no longer prevent an applicant who derived an invention from obtaining a patent on an obvious variant of that invention. I.e., the USPTO has no tools to prevent a third party from patenting obvious variants of information obtained from another. Now, the AIA does provide for a third party to initiate a derivation proceeding or a civil action for derivation. However, it appears to me that those actions (even if timely filed by the originator) would be unsuccessful because derivation proceedings are limited to cases where the derived claims are “substantially the same” as the originator’s innovation. The substantially the same limitation is much narrower in scope as compared with the potential wide variety of obvious variants. Sarnoff largely agrees with my analysis here, but in a more equivocal manner.

The new derivation procedure and civil action also may be inadequate to prevent the deriving applicant from obtaining the patent on an obvious variant even when the originator does file a derivation petition, when the original inventor learns about the obvious variant from the deriver (and had not earlier conceived of the obvious variant). And in litigation defending against the deriver’s patent on an obvious variant, an unrelated third party may be unable to challenge the deriver’s patent for obviousness (although it may be able to challenge it for improper inventorship, but only if the elimination of § 102(f) has not undermined the substantive basis for such invalidation.

Sarnoff (emphasis added).

Unlike Armitage & Matal, Mark Stadnyk is a total Washington DC outsider. His company MadStad designs and sells after-market motorcycle parts (mainly windshields and accessories). MadStad and Stadnyk filed suit in 2012 challenging the AIA as an unconstitutional modification of the US patent laws and asking the federal court to render the law null and void. One of the argument MadStad presents is that the statutory elimination of 102(f) is problematic because it runs contrary to the IP enabling clause of the US Constitution. The US Constitution empowers Congress to develop a patent system that grants rights to “inventors.” And, according to MadStad, the new AIA creates a system where (1) non-inventors can apply for patent and (2) rights wrongly granted to non-inventors cannot be challenged in court by negatively affected third-parties.

In its response to MadStad, the USPTO recently presented its idea regarding inventorship. The USPTO rejects MadStad’s argument and instead follows Matal’s “duplicative” theory. (Matal is now an assistant solicitor at the USPTO.)

The USPTO writes:

The AIA does not sanction the award of patents to anyone but inventors. Retained verbatim—unaltered by the AIA—section 101 continues to restrict the grant of patents to inventors. Section 101 states: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” 35 U.S.C. § 101 (emphasis added); see AIA, passim (no changes to § 101). By retaining section 101, the AIA still requires as a condition of patentability that the named inventor actually invent the claimed subject matter.

Nevertheless, Plaintiffs remarkably allege that the AIA eliminates the inventorship requirement and thus will allow an individual who is not an inventor to obtain a patent. The basis of their claim is that the AIA deletes section 102(f), which provides that a person will not be entitled to a patent if he “did not himself invent the subject matter sought to be patented.” 35 U.S.C. § 102(f). Plaintiffs accordingly allege that, without section 102(f), “being an inventor is no longer a condition of patentability” nor “a requirement of patent validity under Section 282 of the Patent Act,” which establishes the defenses in any action involving the validity or infringement of a patent. Plaintiffs’ allegations are legally incorrect. Both the Supreme Court and the Federal Circuit have concluded that §101—which the AIA retains—is a condition for patentability and can be used as a defense in an action involving patent infringement and validity.

Thus, according to the USPTO, the AIA’s deletion of the redundant requirement in 35 U.S.C. § 102(f) is irrelevant, as section 101 will continue to require that a patent only be awarded to an inventor.

Moving forward, the question is what work do the US Constitution and Section 101 actually do on the inventorship front? The link between patents and their inventors is strong and deeply rooted. As such, it is unlikely (in my view) that MadStat is correct in its argument that Section 102(f) was the only provision guaranteeing continuation of that link. An important question, however, is what to do about the inventorship requirement of the IP empowering clause. Are the limits of that clause implicitly embedded into the conditions and requirements of patentability or, instead, do we use those limits to invalidate legislation that fails to conform to the constitutional restrictions.

Prior to the 1952 patent act, lack-of-inventorship was a condition for patentability under the precursor to our Section 101 and was explicitly listed as a defense that a defendant charged with infringement could plead under the precursor to our Section 282. Thus, “the defendant may plead … That [the patentee] was not the original and first inventor or discovered of any material and substantial part of the thing patented.” See RS § 4920 (Patent Act of 1870).

There are real ongoing questions that stem from the elimination of section 102(f): Is Armitage correct in his assessment of the law that a third party can now patent an obvious variation of an idea secretly learned from the true inventor? Is the USPTO correct that a patent can be challenged for improper inventorship as a violation of 35 U.S.C. 101?

Notes:

Joint Inventorship: Federal Circuit Denies Vanderbilt’s Claim to Cialis Patent Rights

Patent

Vanderbilt Univ. v. ICOS Corp. (Fed. Cir. 2010)

Vanderbilt and ICOS have been locked in an inventorship dispute for several years over patent rights to tadalafil, the active ingredient in Cialis. The University argues that its scientists should be listed as inventors on the patents because they provided provided the building-blocks that Glaxo used in its discovery of tadalafil. (ICOS now holds the patent rights).

The district court ruled against Vanderbilt – holding that the Vanderbilt researchers could not be inventors because they did not have an independent understanding of the “complete compound claimed.” On appeal, the Federal Circuit rejected that misinterpretation of the law of joint inventorship, but affirmed the final holding based on its conclusion that Vanderbilt had not provided clear-and-convincing evidence that it contributed to the invention.

The Patent Act provides some foundation for the law of joint inventorship.

When an invention is made by two or more persons jointly, they shall apply for patent jointly and each make the required oath, except as otherwise provided in this title. Inventors may apply for a patent jointly even though (1) they did not physically work together or at the same time, (2) each did not make the same type or amount of contribution, or (3) each did not make a contribution to the subject matter of every claim of the patent. 35 U.S.C. § 116 (1988).

The statute does not spell-out the minimum threshold level of contribution that is required of an inventor, but the Federal Circuit has held that a joint inventor must have contributed “to the conception of the claimed invention.”

Although physical collaboration is not required, the Federal Circuit has also held that some level of collaboration is required. Collaboration can certainly be one-way. Thus, the Vanderbilt researchers might have some claim to inventorship rights if the Glaxo researchers had relied upon information provided by the Vanderbilt researchers. The Federal Circuit rejected that conclusion based on the lack of factual support – even though the Vanderbilt researchers did provide important material to Glaxo (in the UK), there was no evidence that the Glaxo researchers (operating in France) relied upon the material in their inventive process.

Writing in dissent, Judge Dyk argued that the proper course of action was to remand for a better decision. Judge Dyk picked up on confusion in the district court opinion that both accepted and rejected the notion that the Vanderbilt researchers contributed to the inventive process. Additionally, Judge Dyk argued that the district court’s factual conclusions were directed toward reaching a conclusion to the erroneous question of law (discussed above) and that those factual conclusions were tainted by the error in a way that requires remand.

Federal Circuit: Is a Human An Animal? Written Description; Enablement; and Inventorship

Patent, , ,

Martek Biosciences v. Nutrinova and Lonza (Fed. Cir. 2009)

[Read part I of the discussion of Martek]

Sitting in as an expanded five-member panel, the Court of Appeals for the Federal Circuit has largely affirmed a jury verdict finding Martek’s patents valid and infringed. The case involves issues of written description, enablement, sufficiency of infringement evidence, corroboration of prior inventorship arguments, and claim construction of the word “animal.” The five members agreed as to all issues except for claim construction. On that claim construction issue, the majority opinion of Judges Newman, Gajarsa, and Moore held that a human is an animal. Judges Lourie and Rader argued in dissent that the patentee’s use of animal suggested that it did not include humans.

Is a human an animal: The four patents in suit cover various aspects of making and using the omega-3 fatty acids. Nutrinova sells allegedly infringing products for human consumption. One of the patents claims a method for achieving high concentrations of the omega-3 acids in an “animal,” and the parties contested whether an a human is an animal. The majority based its decision on the maxim that the patentee is free to be its own lexicographer. “When a patentee explicitly defines a claim term in the patent specification, the patentee’s definition controls.” In its specification, Martek appears to plainly define the term animal in the following sentence: “The term ‘animal’ means any organism belonging to the kingdom Animalia.” It is undisputed that humans are classified within the kingdom Animalia – and thus, humans fit within the claims animal limitation. Q.E.D.

According to the court, once a patentee defines a term, extrinsic evidence of that term’s meaning “is simply irrelevant.” On remand, the district court will need to consider whether the patent is infringed under the broader definition.

The dissent does not disagree with the traditional maxim, but argues that the patent is not so clear in its definition:

This case illustrates the unusual situation in which a purported definition of a claim term in the written description is totally negated by the remainder of the text of the patent. Martek’s attempt at lexicography does not conform to the way in which it otherwise describes its invention.

In particular, the dissent points to the fact that the claim in question is “a method of raising an animal” in a way that increases the “content of omega-3 highly unsaturated fatty acids in said animal” and that the field of the invention looks toward “food products derived from such animals.” The specification and claims spell out a variety of animals that could be so-raised: poultry, swine, cattle, shrimp, shellfish, milk producers, and goats. However, the specification only refers to humans when it discusses the benefits of ingesting the milk and meat of those animals.

Written Description: The accused infringers argued that the patentee had added new matter to the claims of one of the patents during prosecution and that the claims are consequently invalid under the traditional written description requirement of 35 U.S.C. § 112. The Federal Circuit disagreed – finding that the jury had sufficient evidence to reject the written description argument. In particular, the ‘594 patent generally claims “a food product.” Although that claim term had been added during prosecution, the Federal Circuit found that it was sufficiently supported by the original disclosure – noting again that “the earlier application need not describe the claimed subject matter in precisely the same terms as found in the claim.” Tech Licensing (Fed. Cir. 2008). Rather, the test is “whether the disclosure of the application relied upon reasonably conveys to the artisan that the inventor had possession at that time of the later claimed subject matter.”

Evidence of Infringement: The claims of the ‘281 patent recite a limitation that the claimed microorganisms designed to create the omega-3 fatty acids caused less vessel damage than another other cultural medium (which used more sodium chloride). Martek did not provide results of any physical analysis of the accused infringing product to ensure that it met this limitation. Rather, Martek’s experts discussed the “literature” on the topic and a conceptual analysis of the known effects of a high chlorine concentration. On appeal, the Federal Circuit affirmed that the expert testimony was sufficient for a jury to find infringement – holding that there is no “general rule requiring one who alleges infringement of a claim containing functional limitations to perform actual tests or experiments on the accused product or method. Rather, a “patentee may prove infringement by any method of analysis that is probative of the fact of infringement.” Forest Labs. 239 F.3d 1305 (Fed. Cir. 2001).

Evidence of Prior Inventorship: It is improper to say that ‘prior inventorship’ is a defense to patent infringement. However, an accused infringer can invalidate a patent under 35 U.S.C. § 102(g)(2) by showing clear and convincing evidence that it (1) conceived of the invention before the patentee and (2) either reduced the invention to practice or was diligent in reducing the invention to practice from a time beginning before the patentee’s conception date; and (3) did not abandon, suppress, or conceal the invention. In this case, the defendants had filed a patent application on a similar invention prior to the patentee. However, that application had gone abandoned. The application properly serves as evidence of conception, but – because it was abandoned – does not serve as constructive reduction to practice. Here, the accused infringer’s defense failed because it could not provide other corroborating evidence of reduction to practice or diligence.

Enablement: The claims of the ‘567 patent were found invalid on JMOL due to lack of enablement due to a genus-species issue. Claim 1 broadly discusses growing “euryhaline microorganisms” while the specification only discloses two examples of thraustochytrium and schizochytrium organisms. The defendants’ experts testified that there were at least 10,000 different qualifying species and the district court agreed that two species were insufficient. On appeal, it appears that the patentee gave-up on its claim 1, but the Federal Circuit agreed that the other claims had been improperly invalidated because they included limitations to the specific examples proffered in the specification. Evidence presented indicated that the species of those dependent claims together encompassed “only 22 known species.”

Inventorship: Conception does not Require Scientific Certainty; Rather, “Proof that the Invention Works to a Scientific Certainty is Reduction to Practice”

Inventorship, Patent, Patent Cases 2009,

University of Pittsburgh v. Marc Hendrick (Fed. Cir. 2009) 08-1468.pdf

The patent at issue (6,777,231) relates to a method of creating stem cells from liposuction residue. In an inventorship dispute amongst former Pitt scientists, the district court held that the Hendrick was not a co-inventor. On appeal, the Federal Circuit affirmed – based primarily on the corroborating evidence found in one of the listed inventor’s laboratory notebook.

Inventorship is a question of law, although a challenge to inventorship must be proven with clear and convincing evidence. In a joint invention situation, “each inventor must contribute to the joint arrival at a definite and permanent idea of the invention as it will be used in practice.” However, there is no requirement that the inventors actually work together; that all asserted claims be jointly invented; or that all inventors realize that they invented something.

In this case, the timeline is important: The two listed inventors had written evidence (in lab notebooks and elsewhere) from before Hendrick arrived on campus that they believed their liposuction derived stem sells could transdifferentiate into various types of cells such as bone, cartilage, nerves, and muscles. At that time, however, they were not “scientifically certain” that nerve cells had been created. And, almost certainly, the two did not have enough evidence to patent their specific claim to adipose-derived stem cells that can differentiate into nerve cells. Hendrick and his REBAR team of researchers then came along and confirmed that the “highly speculative” suggestions of the original listed inventors was indeed correct.

On appeal, the Federal Circuit held that despite the lack of scientific certainty, the invention had been conceived before Hendrick joined the team.

[Hendrick’s] is premised upon a misapprehension of what it means to “know” the limitations of the claims.

Knowledge in the context of a possessed, isolated biological construct does not mean proof to a scientific certainty that the construct is exactly what a scientist believes it is. Conception requires a definite and permanent idea of the operative invention, and “necessarily turns on the inventor’s ability to describe his invention.” Proof that the invention works to a scientific certainty is reduction to practice. Therefore, because the district court found evidence that Katz and Llull had formed a definite and permanent idea of the cells’ inventive qualities, and had in fact observed them, it is immaterial that their knowledge was not scientifically certain and that the REBAR researchers helped them gain such scientific certainty.

Here, the lab notebooks were important to to show that the listed inventors had “sufficiently described to those skilled in the art how to isolate the cells from adipose-tissue … [and] thus they had disclosed a ‘completed thought expressed in such clear terms as to enable those skilled in the art to make the invention.'” Citing Coleman.

Affirmed

Inventorship and Claim Scope Decisions

Patent, ,

< ?xml:namespace prefix ="" w />By Ronald A. Krasnow.

Do you fully use an inventorship determination for the benefit of your company or client?  Do you decide on claim scope in view of inventorship?

Consider the Federal Circuit’s decision in Lucent v. Gateway, Dell & Microsoft (decided Sept. 25, 2008 – Fed. Cir. 2007-1546, -1580).  While this case undoubtedly demonstrates that patent legislation should not be outcome driven, it contained an interesting proposed use of inventorship determinations.  In Lucent, the Court decided that claims 1 and 3 were solely owned by Lucent (because they were invented by Lucent’s employees), but that claims 2 and 4 was jointly owned by Lucent and a joint development partner under a joint development agreement.  The Court reasoned that Lucent, who was in control of prosecution, could have split up the claims into separate patents so that it solely owned the invention claimed in claims 1 and 3. (The Court unfortunately did not deal with the reality facing an attorney trying to balance patentable subject matter with inventorship and obviousness under 35 UCS 103(c).)

The Court’s reasoning, created in hindsight, raises a number of practical issues.

The first is, really, how do you make an inventorship decision in view of a joint development agreement?  For example, do you draft the patent application as broadly as the prior art will allow?  Or do you draft the claims only as broad as your company’s inventors contributions?  Can you realistically split up the claims along inventorship lines and still get past Section 103 on parallel applications?

Once the inventorship decision has been made, have you made full use of that decision to the benefit of your company or client.  Most patent attorneys focus on making sure that the patent application names the correct inventors or complying with the laws of the countries where the inventors reside.  But, the Lucent decision suggests that enforcement should also be considered at the time inventorship and claim scope decisions are made.

One other consideration is drafting the joint development agreement. The Lucent decision suggests that large companies with negotiating power might require joint development partners to not license others inside the field of joint research and development program.

On the policy side, the Federal Circuit’s reasoning logically leads to other considerations:

  1. If you draft broader claims, should there be an equitable remedy available so that the added inventor (read as joint development partner) does not gain a windfall by access to the broader claims, when it is only the narrow and more subservient claims to which it contributed? 
  2. Should reissue be afforded to allow case to be divided, to shelter the contribution of the dominant technology owner?
  3. Does the party prosecuting the patent applications have any “duty” to an omitted inventor?  For example, if claims to which the omitted inventor contributed are cancelled, or are disclaimed during post-issuance proceedings, does the omitted inventor have any claim for “waste”?

Note: Mr. Krasnow’s new book Intellectual Property Culture (Oxford University Press) was just released [Link]

Inventorship Disputes: Six-Year Laches Presumption Applies Despite Intermediate Reexamination

Patent

Dr. Serdarevic v. Advanced Medical Optics (Fed. Cir. 2008)

In 2006, Dr. Serdarevic filed an inventorship claim against Advanced Medical (AMO). She argued that AMO’s patented inventions were hers that she had developed during her ophthalmology residency at Columbia Presbyterian. Two of her attending physicians are listed as the inventors of the six patents in suit. Unfortunately for Serdarevic, all her witnesses died before she filed suit.

The district court dismissed Serdarevic’s claims – finding the inventorship claim barred by laches. It turns out that Serdarevic claimed to have invented back in the early 80’s. She learned of the patents in 1998, but waited until 2006 to file suit.

Inventorship Laches: The 1993 Scimed case held that a “delay of more than six years after the omitted inventor knew or should have known of the issuance of the patent will produce a rebuttable presumption of laches.” Here, Serdarevic knew of the patent for more than eight years before filing suit – creating a presumption that laches applies.

Reexamination Does Not (Necessarily) Reset Laches: One of the patents had undergone reexamination during the eight-year period. Serdarevic argued that the laches clock should be restarted at that point. The CAFC rejected the notion of any such rule:

“One thing is clear, and accordingly we so hold: there is no rule that the issuance of a reexamination certificate automatically resets the six-year clock for the presumption of laches in each and every case.”

In one older case, the CAFC allowed reset the laches clock after a reissue. Vaupel (Fed. Cir. 1991). The CAFC distinguished that case because the excluded inventor had participated in the reissue and had given notice that it would pursue its claim after the reissue.

US Court Refuses to Stay Pending Outcome of Parallel Canadian Inventorship Litigation

Patent

Wyeth v. Dr. Wolfe, 08-0754 (E.D.Pa. May 8, 2008)

Dr. Wolfe holds a patent on a low dose progesterone therapy.  Wolfe and Wyeth worked together for several years to bring Wolfe’s product to market. Later, Wyeth filed at least one similar patent application without listing Wolfe as an inventor. As a Canadian, Wolfe filed suit in Canada requesting that he be listed as the inventor and also requesting compensation for breach of contract, etc.

Wyeth then filed a declaratory judgment action in the Eastern District of Pennsylvania.

On May 8, the court denied Wolfe’s motion to stay the later-filed US proceedings. Without going into the merits of the stay or any patent specific law, the court looked to its own precedent holding refusing to stay where the foreign litigation is still “in its incipiency.” 

“Here, the Canadian actions are not far enough along in the process to warrant a stay in this Court. In the case filed in the Ontario Superior Court of Justice, there is a pending Motion to Dismiss, which that Court will not rule on until June 25, 2008. Similarly, the case filed in the Federal Court of Canada is also in its beginning stages. While some evidence has been submitted on the matter, the case has not yet been scheduled for hearing. Thus, it is unlikely that either Canadian case will soon be resolved. Staying the proceedings in this Court would, therefore, only serve to delay the progress of this action. As such, the Court finds that a stay in this Court is inappropriate at this time.”

Parallel US & foreign patent litigation is an increasingly common occurrence.  In addition to the cost, these cases raise important issues of inconsistent application of laws.

No Appellate Jurisdiction Over Remanded Inventorship Dispute

Patent

HIF BIO v. Yung Shin Pharmaceuticals (Fed. Cir. 2007)

In 2005, HIF sued Yung Shin, Carlsbad Technology, the Fish & Richardson law firm, and others in California State Court. In its complaint, HIF asked the court for a declaratory judgment for ownership and inventorship of various anti-angiogenesis drugs. The complaint also asserts claims of slander, conversion, fraud, business interference, and unjust enrichment. The case was removed to Federal Court. However, the only federal claim — the RICO allegation — was dismissed and the district court declined to exercise its supplemental jurisdiction to hear the other state claims (thus, remanding the state claims back to the state court).

On appeal, the defendants argued that the federal district court should be required to hear the supplemental state claims because the claims are intricately tied to the federal patent law issue of inventorship. 28 USC §1367 provides a district court discretion in determining whether to hear supplemental issues. Although generally broad, the discretion is not completely unfettered and may be reviewed on appeal. In Voda, for instance, the CAFC found that a district court had abused its 1367 discretion by hearing foreign patent infringement claims.

In its decision, the appellate panel found that it lacked subject matter jurisdiction to hear the appeal.  In particular, the court held that 28 USC §1447(d) blocks federal appellate jurisdiction over remands back to state court. From its text, 1447(d) appears to be broadly written to block any appellate review of a remand to state court (except for a small unrelated exception).  Supreme Court precedent, however, has narrowly interpreted the statute to allow federal appeals for remands except for remands based on a lack of subject matter jurisdiction.

Thus, the question here was whether the remand based on discretionary denial of supplimental jurisdiction is the same as a remand based on lack of subject matter jurisdiction.  The CAFC found the two overlapping — certainly once the court excerts its discretion to refuse the case, it certainly lacks subject matter jurisdiction.

Interestingly, the court has gone out on a limb with this case — splitting with decisions from the Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, and Eleventh Circuits.  Precedent from courts indicate a willingness to hear cases appealing remands based on denials of supplimental jurisdiction.  Writing for the CAFC panel, Judge Gajarsa found that a recent Supreme Court case (Powerex 2007) opened the door for the new direction.

  • This case would have a good shot of being granted certiorari. Its impact on patent law, however, is nil. (Perhaps a good thing).

Federal Court Rejects Jurisdiction Over Inventorship Claim

Patent, Patent Cases 2006

Stevens v. Broad Reach, 79 USPQ2d 1501 (W.D.Mo. 2006).

Feeling he had been slighted by not being listed as the inventor on a patent application directed to a liquid polymer blender, Kirt Stevens sued — seeking a judgment that he is the inventor of the claimed invention and an injunction forcing an amendment to the pending application.

On motion, however, the court dismissed the claims for lack of subject matter jurisdiction. In particular, the court found that amendment of inventorship in a patent application is governed by 35 U.S.C. § 116.  That statute provides that amendment be made before the PTO and, according to the court "does not provide a private right of action in federal court to resolve inventorship disputes in patent applications."

Case dismissed.

Notes: Of course, Stevens cannot take action under Section 116 without the cooperation of the other side.  Suggestions for Stevens? The application, filed in October 2004, has apparently neither been published nor issued as a patent.

Inventorship: Student Denied Co-Inventorship Opportunity

Patent, Patent Cases 2006

GlaucomaStern v. Columbia University (Fed. Cir. 2006).

The district court found that Stern should not be added as a co-inventor on Columbia’s patent directed toward the use of prostaglandins to treat glaucoma.

Stern, a medical student at the time of the invention conducted a number of experiments for Lazlo Bito (the named inventor). Stern’s experiments showed that a single topical application of prostaglandin reduced intraocular pressure in monkeys and cats, but did not prove whether that would prevent glaucoma.  Bito later conducted further experiments and filed the application that led to the patent in question.

The district court found that the patent was directed at multiple doses of prostaglandin, and thus, that there was not any clear and convincing evidence that Stern had invented the invention as claimed.  On appeal, the CAFC reviewed the summary judgment decision de novo.

Based on Stern’s experiments and Bito’s prior publications, the appellate panel agreed that “Stern did not have an understanding of the claimed invention, did not discover that prostaglandins have an effect on IOP, did not discover that repetitive application of prostaglandins to the eyes of primates can maintain reduced IOP, and did not conceive of the idea of the use of prostaglandins to reduce IOP in primates. Furthermore, there was no collaboration between Stern and Bito in developing a glaucoma treatment. Stern simply carried out an experiment previously done by Bito on different animals—animals that Bito had already determined would be good models for prostaglandins research. Stern’s contribution is insufficient to support a claim of co-inventorship.”

The court went on to hold that “unwitnessed laboratory notebooks on their own” are insufficient to support a claim of co-inventorship. In this case, the notebooks had been allegedly destroyed by Professor Bito.

Affirmed

Read the case: [LINK]

 

 

Paintball Patent Infringement: Smart Parts’ Patent Lacks Proper Inventorship

Patent, Patent Cases 2004

paintball_gun
Smart Parts v. WDP (D. Oregon 2004)

In a patent infringement suit over electropneumatic paintball guns, an inventorship controversy arose. Smart Parts contends it is the sole owner of U.S. Patent No. 6,474,326. Dr. Edward Hensel, a former investor, claims to be a co-inventor. Hensel, now acting on behalf of WDP, provided evidence that he designed various elements of the patented invention – namely the electrical timing circuit and bolt action control. In addition, Hensel created a working model in his home. The court agreed that Hensel should be at least a co-inventor and granted summary judgment to WDP on the issue of inventorship.

Links:
Opinion;
Dale Ford’s Commentary

— Dennis Crouch