Property, intangible

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Divorce Entitled to Full Faith and Credit

Co-inventor Mundi Fumokong was married to Fonda Whitfield when he filed for two related patent applications.  In California, all property acquired by a married person during marriage is presumed to be community property, including patent applications.  Fumokong and Whitfield later filed for a  “quickie” divorce (those are the court’s words), more formally called a summary dissolution.  In a summary dissolution, a divorcing couple either has to state that there is no community property or file a property settlement dividing all assets and liabilities.  The Fumokong/Whitfield couple took the former route, declaring in their petition that they had no community assets or liabilities.  After the appropriate waiting period, the court granted the divorce.

Defendant Sprint Nextel claimed that plaintiff Enovsys LLC, successor-in-interest to Fumokong and his co-inventor’s interest in the patents, did not have standing because Whitfield was an unjoined co-owner of the patents.  The court of appeals explained that under 28 U.S.C. § 1738, state judicial proceedings “shall have the same full faith and credit in every court within the United States . . . as they have by law or usage in the courts of such State, Territory, or Possession from which they are taken.”  Thus, the court of appeals had to abide by any decision the state court made about the disposition of the patents.

The court therefore assessed it as a question of collateral estoppel.  In California, the four elements to collateral estoppel are: (1) the issue sought to be precluded from relitigation is identical to the issue decided in the earlier proceeding; (2) the issue was actually litigated in the former proceeding; (3) the issue was necessarily decided in the former proceeding; and (4) the person against whom collateral estoppel is asserted was a party, or in privity with a party, to the earlier proceeding.  Here,

In a divorce proceeding, property rights are put at issue by (1) specific allegations describing such property, or by (2) an allegation that no community property existed. Fomukong and Whitfield alleged that they had no community property. The judgment of dissolution entered by the California court was based on this admission; under California Family Code § 2404, the judgment constituted a complete and final adjudication of Fomukong and Whitfield’s property rights. Accordingly here, although the final divorce decree was silent as to particular property, it nevertheless adjudicated the parties’ rights with respect to that property because it was based on an uncontested complaint which alleged that there was no community property.

The final requirement under California law for collateral estoppel is met because Sprint Nextel is in privity with Whitfield. In this case, privity arose from Whitfield’s express assignment of any property interest she had in the patents to Sprint Nextel. Sprint Nextel is thus barred from relitigating Whitfield’s property rights in this case.

Plaintiff Enovsys therefore had complete ownership of the patents and standing to bring suit.  Sprint Nextel fared no better on the judgment of infringement.

Enovsys LLC V. Nextel Communications, Inc., No. 09-1167 (Fed. Cir. Aug. 3, 2010)

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3 responses to “Divorce Entitled to Full Faith and Credit”

  1. Interesting side note: Sprint Nextel bought Ms. Whitfield’s alleged rights in the patent in order to lawfully do what Envosys claimed was infringing — which was pretty savvy lawyering except for the fact that they must not have reviewed her divorce decree in which she admitted she and her husband owned no community property. I wonder how much Sprint Nextel paid for … nothing, and whether Ms. Whitfield [or HER lawyer] will have to pay it back.

  2. Indeed. It was mentioned in the last paragraph I quoted (“privity arose from Whitfield’s express assignment of any property interest she had in the patents to Sprint Nextel”) but the court didn’t call out the transaction in the recitation of facts. I think it’s the reason that the court took the collateral estoppel tack rather than simply deciding de novo who the patent owners were.

  3. Makes you think twice before doing a “quickie” divorce.

    Sure the documents will go through if you claim no assets or debts but when there really are… watch out because you may have waived all rights to them.

    Documents For Divorce
    “No matter what decision you make, always make it an informed one…