Property, intangible

a blog about ownership of intellectual property rights and its licensing

Were the Patent Rights Assigned?

Defendant J2 Cloud Services (JFAX) hired plaintiff Greg James to write some software. Unbeknownst to James, JFAX filed a patent on the software. Many years later, James sued JFAX for correction of inventorship. JFAX argued that James didn’t have standing for correction of inventorship because he had assigned his patent rights to JFAX. The district court agreed with JFAX and dismissed the suit. James appealed.

Here are the relevant portions of a letter agreement between James and JFAX:

This letter shall serve to confirm our Agreement on the terms by which you … will develop software solutions for the exclusive use of JFAX Communications, Inc. ….

You agree to develop original software solutions, write original software routines, carry out testing and otherwise provide technological solutions for the JFAX system, and be responsible for the creation, execution and delivery to JFAX of a series of aspects of those solutions.

JFAX shall become the sole owner of all code and compiled software solutions as described in this Agreement as soon as it is developed, and GSP shall assign to JFAX all copyright interests in such code and compiled software.

James also executed copyright assignment agreements for the software.

Did he assign the patent rights? Add your thoughts in the comments.

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2 responses to “Were the Patent Rights Assigned?”

  1. Haven’t you set a trap for us in that you say the dispute is about Inventorship not ownership of the patent? Inventorship in the US is similar to moral rights in Europe in that it must be accurately filed under oath and a corporation cannot be an inventor even of a work for hire (unlike copyright where they can be an author). Whether the patent rights were assigned or not, the original Inventor still has standing to pursue a claim for the correction of Inventorship under 35USC116.

    Assuming the inventorship claim is a prelude to an ownership claim based on failure to assign the patent, then the agreement not assigning invention rights is going to be a huge problem for J2 because absent explicit language they’re going to be relying on hired to invent for ownership, which will be highly dubious in the case of a non-employee.

    Best guess: J2 will lose ownership but can probably claim a licence to the patent under shop rights.

  2. One has a claim for correction of inventorship only if the inventor gains some benefit from the correction they wouldn’t otherwise have (no harm, no foul). The most generous case, Shukh v. Seagate Technology, Inc., says this can be a benefit to reputation, but still subject to proof that there is some reputational benefit. That was JFAX’s theory here, that James had nothing to gain from the correction.

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