Property, intangible

a blog about ownership of intellectual property rights and its licensing

Battle Lines Drawn

I previously reported on a case involving a missing patent assignment from an employee. The missing document didn’t prevent the Patent Office from issuing the patent though; the successor to the rights of the other co-inventors submitted the inventor’s employment agreement to the Patent Office and it thereafter issued the patent. However, the district court held that the language of the employment agreement was not a present assignment of the invention and so ownership had never been transferred. The district court opined that problem could have been managed, but wasn’t, by suing the recalcitrant co-inventor for specific performance of her contractual obligation to assign, or by exercising the provision in the employment agreement that allowed the employer to act as the inventor’s attorney-in-fact and execute the assignment. But neither happened and the infringement suit was dismissed because all owners weren’t joined.

The Court of Appeals for the Federal Circuit affirms the district court. The majority opinion isn’t all that interesting, mostly just confirming the reasoning of the district court.

But the concurring opinion, but Judge O’Malley, and the dissent, by Judge Newman, are much more interesting. Judge O’Malley concurs in the result but uses this case as an opportunity to object once again to the Federal Circuit’s view that an unwilling co-inventor can bar a patent infringement lawsuit altogether, an argument previously made by Judges Newman and O’Malley (also joined by Lourie and Wallach) in their dissent from a denial of a rehearing en banc in STC.UNM v. Intel Corp., 767 F.3d 1351 (Fed. Cir. 2014) (blogged here). If anyone needs to brief this argument, a wholesale cut and paste from this opinion is all that you need.1

Judge Newman’s dissent exposes the problems with the Federal Circuit’s strong textualist interpretation of employment agreements in general and the wording of the assignment provision specifically. The Federal Circuit has settled on a bright line in deciding whether there was a present assignment of a future right or only a promise to assign in the future – looking only at the grant language to see whether the wording is “does hereby assign” or “shall assign,” or an equivalent. Judge Newman’s dissent takes a more holistic view of the document, describing at great length all the spots in the employment agreement that implied that the employer was to own any patents, nine places to be exact. Certainly the understanding of the parties at the time the agreement was signed was that the employer would own any patent rights. And what seems obvious now about the wording wasn’t so obvious at the time, where there was uncertainty about whether it was even possible to assign an expectancy interest in a future patent, a point that some still disagree with. But bright lines have more certainty, even if occasionally harsh.

Advanced Video Techs. LLC v. HTC Corp., Nos. 2016-2309, 2016-2010, 2016-2011 (Fed. Cir. Jan. 11 2018).

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  1. But for an opposing view on the point, see David Hricik’s post over at Patently-O
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