Property, intangible

a blog about ownership of intellectual property rights and its licensing

Lesson Learned

This is a story that makes lawyers groan “if only I could’ve been there.” The plaintiff, Miller, had an idea for a four-way induction unit for an air handling system. He told his idea to Shutes, who introduced him to defendant M&I Heat Transfer Products, a company that designed and manufactured induction units. M&I, working with Miller, arranged four preexisting single induction units in a square. Miller didn’t believe it accomplished his goals, but continued to work with M&I on the product. M&I and Miller installed the prototype in a room to demonstrate it and Miller didn’t think it worked properly. Miller and Shutes subsequently bought four induction units from M&I and continued to work on the invention on their own.

Miller (with Shutes) and M&I filed separate patent applications about two weeks apart. M&I’s application was for placing four air handlers in a square configuration; Miller’s presumably for an invention with more refinements. M&I initially listed Miller as an inventor and asked Miller to sign the power of attorney and assignment. Miller didn’t sign, mentioning something about getting no benefits in exchange for signing, and also saying “The patent application does a good job of describing your induction units, but other than showing them in a square configuration it does not have anything to do with my design and you don’t need to have my name on the application.” He didn’t mention the M&I application to his own patent lawyer. M&I took his name off the application.

Several years later M&I threatened Miller with a lawsuit for patent infringement. Miller filed a declaratory judgment action.

Miller tried several tactics to invalidate or claim some ownership of the M&I patent, none successful.

Miller claimed the M&I patent, covering the fundamental premise of placing four induction handlers in a square, was obvious under § 103, but no luck. Miller asked to have the M&I patent corrected under § 256 to have his name added as an inventor, but was defeated by laches. He claimed that the M&I patent was invalid under § 102(g) on the basis that he was the first to invent and had not abandoned, suppressed or concealed it. There were documents that equivocated in both directions (in favor of Miller, a letter from M&I that credited Miller with the design; in favor of M&I, Miller’s use of the plural first person, meaning M&I and himself, and calling it “the M&I product”). Miller therefore couldn’t show that there was a substantial enough question of invalidity to avoid a preliminary injunction, so one model of his air handling unit (already discontinued) was enjoined. Fortunately, the other model, a different design, was not infringing and not enjoined.

As the judge put it, “Before concluding its discussion of Plaintiff’s validity challenges, the court is constrained to note that had Miller timely informed his patent attorney of even the possibility that [M&I] would be filing a patent application for a design that included four induction units in a square configuration, this entire lawsuit may have been avoided.”

Nuclimate Air Quality Sys., Inc. v. M&I Heat Transfer Prods., Ltd., 5:08-CV-0317 (NPM/GJD), 2008 U.S. Dist. Lexis 56708 (N.D.N.Y. July 24, 2008).

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