Property, intangible

a blog about ownership of intellectual property rights and its licensing

Owning an Invention vs. Owning a Patent

What is the difference between owning an invention and owning a patent? In University of S. Florida v. CoMentis, more money.

A former employee of the University of South Florida (USF), Michael Mullan, invented technology related to Alzheimer’s disease. He assigned the patents to the Alzheimer’s Institute of America (AIA), who sued various defendants in three different lawsuits in California, Pennsylvania and Oklahoma. The Pennsylvania defendants argued that AIA didn’t have standing to bring the infringement suit because of Mullan’s status as employee of USF [Word doc] when he invented the technology. The court agreed, so USF moved to intervene so it could counterclaim on ownership. The court allowed intervention but only on the “issue of whether or not [USF] waived its rights in the invention claim[ed] by … Mullan.”

All the defendants in the three suits then settled with USF by making a guaranteed payment with the possibility of a contingency payment. The condition that triggered the contingency payment was this:

USF v Comentis clipIf you can’t read it, it says:

(b) Contingent Payment. Within thirty (30) days after the date USF has notified Licensee in writing that: (i) by order of a court of competent jurisdiction binding upon AIA and from which no further appeal or challenge may be taken, it has been determined that USF did not waive its ownership interests in the Asserted Patents and has held at all material times a valid ownership interest in said patents

So we have a situation where USF was allowed to intervene because of its potential ownership of “inventions” and a settlement agreement with a condition based on a court’s decision on ownership of “patents.” They aren’t the same:

Neither party directs the Court to law clearly resolving the issue of whether or not ownership in invention necessarily leads to a presumption—rebuttable or otherwise—of ownership in patent. It is indisputable, however, that a difference exists both in basic definition and in law.[fn6]

[fn6]See generally 35 U.S.C. § 101; General Information Concerning Patents, USPTO (Oct. 2014), Likewise, the Florida Administrative Code was drafted with appreciation of the difference. Fla. Admin. Code r. 6C4-10.012(3)(c) consistently refers to a state university’s right to its employee’s “inventions and works.” The word “patent” is not used interchangeably with these terms. The only times “patent” is referenced is with regard to the making of patent applications or separate “patent rights.”

The Middle District of Florida held that the Pennsylvania court did not decide whether USF had an ownership interest in the patents. This lawsuit, one for breach of contract, was a last gasp; USF already tried to get the Pennsylvania court to issue a declaration that it owned, not just the inventions, but the patents too, and the court declined..

In theory, because it wasn’t expressly decided in Pennsylvania USF isn’t barred from another try:

USF makes multiple attempts to direct this Court’s attention to the intent of the parties at drafting. USF seems to suggest that it was dishonest of CoMentis to agree to the contingency language if CoMentis knew that it was “impossible for the Court in the Pennsylvania Action ever to determine that USF had a valid ownership interest in the Asserted Patents.” USF’s grievance in this regard is disingenuous. First, the settlement agreement plainly states that a court of competent jurisdiction binding on AIA must give an order determining USF’s ownership rights—not that the Eastern District of Pennsylvania must give such an order. There were two other actions involving the AIA patent dispute. In addition, the Eastern District of Pennsylvania alluded to the fact that USF is not foreclosed from engaging in further litigation against AIA to establish its rights.

But I have to assume that AIA and USF entered into a settlement agreement too, so a suit against AIA is off the table. Well-played, CoMentis.

Univ. of S. Fla. Bd. of Trs. v. CoMentis, Inc., No. 8:15-cv-01544-EAK-AEP (S. D. Fla. March 1, 2016).

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