Midwest Intellectual Property
Symposium
Current Topics Concerning Corporate
Ownership and
Licensing of Intellectual Property
November 19, 2009
Recent Ownership Themes
• Current Topics:
o
o
o
o
Collaborations
Security Interests
Continuations-in-Part
Outside the US (Foreign) Issues
• Note: The following cases are just a small sample of
recent cases related to intellectual property
ownership.
Collaborations
Stanford v. Roche (Fed. Cir. 2009)
• Patented Technology
o
Method of quantifying HIV virus levels in human blood
samples and correlating to the effectiveness of antiretroviral
drugs.
• History
o
o
o
o
One of the named inventors (Holodniy) of the patents at
issue signed a Copyright and Patent Agreement ("CPA")
upon joining laboratory at Stanford.
Holodniy visited Cetus to learn the technology.
─ Holodniy signed a Visitor's Confidentiality Agreement
("VCA").
Research for the technology at Stanford was funded by the
National Institutes of Health ("NIH").
Stanford filed the applications for the patents at issue – the
'730, '705 and '041 patents.
Stanford v. Roche (Fed. Cir. 2009)
Stanford v. Roche (Fed. Cir. 2009)
• Procedural History
o
o
Stanford sues Roche for patent infringement.
Roche: Stanford lacks standing - Roche owns, has a
license for, and/or a shop right on the asserted patents.
• District Court
o
o
o
Roche's ownership was barred by California's statute of
limitation and the Bayh-Dole Act.
Roche's license claims fail because Stanford never
consented to Roche's acquisition of Cetus.
Roche lacked shop right to the patents.
Stanford v. Roche (Fed. Cir. 2009)
• Federal Circuit
o
o
Although Roche claiming ownership was barred by
California's statute of limitation, under California law,
"a defense may be raised at any time, even if the matter
alleged would be barred by a statute of limitations if
asserted as the basis for affirmative relief" (citation
omitted).
─ Similar reasoning applies to laches and equitable
estoppel.
Thus, Roche can assert its ownership as a bar to
Stanford's standing.
Stanford v. Roche (Fed. Cir. 2009)
• Federal Circuit
o
Which law to apply?
─ Normally questions of ownership are state law
issues.
─ Exception: questions of whether a patent
assignment clause creates an automatic
assignment or merely an obligation to assign Federal Circuit Law applies.
Stanford v. Roche (Fed. Cir. 2009)
Stanford v. Roche (Fed. Cir. 2009)
Stanford v. Roche (Fed. Cir. 2009)
• Federal Circuit
o
Was Holodniy's CPA with Stanford an automatic
assignment?
─ Language: "I agree to assign and confirm in
writing to Stanford..." is a mere promise to assign.
─ Stanford's invention rights policy supports this
conclusion: "Unlike industry and many other
universities, Stanford's invention rights policy
allows all rights to remain with the inventor if
possible."
─ Stanford did not immediately gain title to the
inventions.
Stanford v. Roche (Fed. Cir. 2009)
Stanford v. Roche (Fed. Cir. 2009)
Stanford v. Roche (Fed. Cir. 2009)
• Federal Circuit
o
Was Holodniy's VCA with Cetus an automatic
assignment?
─ Language: "I will assign and do hereby assign to
CETUS..." is a present assignment of Holodniy's
future inventions.
─ Cetus immediately gained equitable title to
Holodniy's inventions.
─ Cetus's equitable title converted to legal title when
the parent application was filed on May 14, 1992.
─ This negated Holodniy's subsequently executed
assignment to Stanford (May 4, 1995) because
Holodniy no longer retained any rights.
Stanford v. Roche (Fed. Cir. 2009)
Stanford v. Roche (Fed. Cir. 2009)
Stanford v. Roche (Fed. Cir. 2009)
• Federal Circuit
o
o
o
Was Stanford a Bona Fide Purchaser (BFP) under
35 USC § 261?
─ "An assignment, grant or conveyance shall be
void as against any subsequent purchaser or
mortgagee for a valuable consideration, without
notice, unless it is recorded in the Patent and
Trademark Office within three months from its
date or prior to the date of such subsequent
purchase or mortgage." 35 USC § 261
Stanford was charged with notice of its employees'
assignments (the VCA).
Stanford was not a BFP.
Stanford v. Roche (Fed. Cir. 2009)
Stanford v. Roche (Fed. Cir. 2009)
Stanford v. Roche (Fed. Cir. 2009)
• Bayh-Dole Act- 35 USC § 200+
o
o
US Government to take title under certain conditions.
The "contractor" universities or inventors can retain
ownership if US Government does not.
• Stanford (and District Court): Bayh-Dole allowed Stanford
a "right of second refusal" after Government refrained to
exercise its rights.
o
Holodniy could only keep title if Stanford did not elect to
retain title.
• Federal Circuit
o
o
Bayh-Dole does not void prior contractual transfers of rights.
Thus, Bayh-Dole did not automatically void the patent rights
Cetus received from Holodniy.
Stanford v. Roche (Fed. Cir. 2009)
• Federal Circuit
o
o
Roche declaratory judgment of ownership barred by
California's statutes of limitation.
Stanford lacks standing because it cannot establish
ownership of Holodniy's interest.
Stanford v. Roche (Fed. Cir. 2009)
• Take Home Points:
o
o
Review the language in your assignments to make sure
that it contains a present assignment of patent rights.
─ "I do hereby assign"
When collaborating, make sure that employees do not
sign anything unless it is reviewed.
Foreclosures and Security Interests
Sky Technologies v. SAP (Fed. Cir. 2009)
• Procedural History
o
o
o
o
Sky Technologies ("Sky") sues SAP AG and SAP
America ("SAP") for patent infringement.
SAP moved to dismiss because Sky lacks standing
because chain of title was broken.
District Court finds the patents in suit were transferred
through foreclosure proceedings.
SAP files an interlocutory appeal to the Federal Circuit.
Sky Technologies v. SAP
Sky Technologies v. SAP
Sky Technologies v. SAP
• Issue: Whether XACP has legal right, title, and interest
in the patents to transfer those patent rights to Sky,
thereby providing Sky standing to sue.
o
o
SAP: No writing exists transferring the patents from
Ozro to XACP.
─ 35 USC § 261requires a transfer of ownership to be
in writing.
Sky: Akazawa v. Link New Technology International,
Inc., 520 F.3d 1354 (Fed. Cir. 2008) permits transfer of
patent ownership by operation of law without a writing.
Sky Technologies v. SAP
• 35 USC § 261 requires all assignments of patent
interests to be in writing.
• Fed. Cir.: "[T]here is nothing that limits assignments
as the only means for transferring patent ownership...
[O]wnership of a patent may be changed by operation
of law." Akazawa, 520 F.3d at 1356.
o
o
Japanese inventor died intestate; wife (and daughters)
subsequently transferred patent rights to the plaintiff.
Akazawa is controlling in this case.
Sky Technologies v. SAP
• SAP: Akazawa is correct, but 35 USC § 154(a)(1)
limits the class to persons receiving ownership "Every patent shall contain a short title of the invention
and a grant to the patentee, his heirs or assigns, of
the right to exclude ..."
o
Akazawa the class was heirs, but in this case, XACP is
not the patentee, an heir, or an assign.
• Fed Cir.: 35 USC § 154 does not restrict patent
ownership to these three classes and it fails to
address transfers of ownership.
Sky Technologies v. SAP
• Fed Cir.: Policy Justifications for Transfers by
Operation of Law
o
o
o
Large number of patent titles subject to security
interests would be invalid.
If not, value of patents would diminish because patent
owners would be limited in collateral sources.
Impractical to have a written assignment from a
business that may no longer exist.
Sky Technologies v. SAP
• Which law to apply?
o
o
Federal law usually is used to determine the validity
and terms of an assignment.
State law controls any transfer of patent ownership by
operation of law not deemed an assignment.
• In this case, Massachusetts Law applies.
o
o
XACP followed Massachusetts law in perfecting
ownership of the patents through the security interest.
Massachusetts law does not require a writing--Transfer
Statements are merely recognized and not mandatory
to transfer patents.
Sky Technologies v. SAP
• Summary of Ways of Transferring Ownership
o
o
Assignment: need a writing.
Operation of law: do not need a writing if state law does
not require one.
Assignment of Continuations in Part (CIPs)
Euclid Chemical Co. v. Vector Corrosion Tech.,
Inc., 90 USPQ2d 1220 (Fed. Cir. 2009)
• Patents
o
o
'553 Patent (Parent)
'742 Patent: Continuation-in-Part (CIP) of the '553
Patent
• Inventor (Bennett) consulted with both Euclid and
Vector
• Assignment
o
o
o
Inventor (Bennett) to Vector
Executed 8 months after after the '742 Patent (CIP)
issued
Assignment does not specifically identify the '742 Patent
(CIP)
Euclid - Diagram of Assignment
Euclid Chemical Co. v. Vector Corrosion Tech.,
Inc. 90 USPQ2d 1220
• Procedural History
o
o
Euclid: DJ Action the Assignment did not transfer the
’742 patent to Vector and it was a bona fide purchaser
for value of the ’742 patent.
Vector: Counterclaim it owned '742 Patent by
assignment.
Euclid - Assignment Text
I, JACK BENNETT, whose full post office address is 10039
Hawthorne Drive, Chardon, Ohio 44024, in consideration for
$25,000.00 and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged do
hereby sell and assign to VECTOR CORROSION
TECHNOLOGIES LTD. whose full post office address is 474
Dovercourt Drive, Winnipeg, Manitoba Canada R3Y 1G4, all
my interest in the United States, Canada and in all other
countries in and to my US, Canadian, and European
applications for patents and issued US patent, namely:
Euclid - Assignment Text
1. Issued US Patent 6,033,553. This patent claims the
specific use of LiNO3 and LiBr to enhance the
performance of metallized zinc anodes;
2. US Application No. 08/839,292 filed on April 17, 1997,
3. US Application No. 08/731,248, filed on October 11, 1996
(now abandoned),
4. EPO Application No. 99122342.1, filed November 9,
1999, and
5. Canadian Application No. 2288630, filed November 8,
1999,
Euclid - Assignment Text
any and all divisional applications, continuations, and
continuations in part together with the entire right, title and
interest in and to said applications, any and to all divisional
applications, continuations, and continuations in part thereof,
the right to claim priority therefrom under the International
Convention, and any and all Letters Patent which may issue
or be reissued for said invention to the full end of the term for
which each said Letters Patent may by granted; and hereby
authorize the issuance to said assignee of any and all said
Letters Patent not already issued as the assignee of entire
right, title and interest in and to the same, for the sole use
and benefit of said assignee, its successors, assigns or legal
representatives;
Euclid - Assignment Text
and hereby covenant and agree to do all such lawful acts and
things and to execute without further consideration such
further lawful assignments, documents, assurances,
applications, and other instruments as may reasonably be
required by said assignee, its successors, assigns or legal
representatives, to obtain any and all Letters Patent for said
invention and vest the same in said assignee, its successors,
assignees or legal representatives.
SIGNED AT: Chardon, Ohio, USA.
This 20th day of December, 2001
Euclid - District Court
• Ohio Law applies.
• Assignment was unambiguous for CIP ('742 Patent)
o
Consequently, no extrinsic evidence.
• District Court relied on the following language to
conclude that the '742 CIP patent was assigned:
o
“any and all . . . continuations in part together with the
entire right, title and interest in and to said applications,
any and to all divisional applications, continuations,
and continuations in part thereof . . . and any and all
Letters Patent which may issue or be reissued for
said invention . . . ."
Euclid - Federal Circuit (Majority)
• Ohio Law applies
• Assignment was ambiguous for CIP ('742 Patent).
o
o
o
District Court was correct that the language of the
Assignment purports to convey “US Patent 6,033,553”
and “any and all divisional applications, continuations,
and continuations in part.” and the '742 Patent was a
CIP of the '553 Patent.
BUT- the Assignment specifically assigns all interest in
and to the inventor’s “US, Canadian, and European
applications for patents and issued US patent.”
(emphasis added)
“applications”—plural but “issued US patent”—singular.
Euclid - Federal Circuit (Majority)
• Assignment was ambiguous for CIP ('742 Patent).
o
o
Had the assignee intended through the assignment of
“continuations in part” to assign other issued US
patents, it would be expected that the Assignment would
have said that the inventor was assigning his “issued US
patents”—plural—and even recited the patent number of
the issued ’742 patent.
'742 Patent already issued as a patent when the
assignment was executed.
• Although Euclid provided extrinsic evidence to show
'742 patent (CIP) not assigned, remand to give Vector
the opportunity to submit extrinsic evidence.
Euclid - Federal Circuit (Newman)
•
Newman: Concurs in part and dissents in part
Concurs: District Court erred in granting summary judgment of
ownership to Vector
o Dissents: Contractual intent requires a new trial
o
• Arguments
Need specificity of identification of transferred patents
─ Bennett- 3 (consultant) agreements with Vector all related
to the '553 patent and its distibuted anode technology
─ None of the agreements explicitly mention the '742 patent
(CIP) or embedded anode technology
o Vector recorded assignment for '553 patent but not for the '742
patent (CIP)
o Vector never paid maintenance fees for the '742 patent (Bennett
paid)
o
Continuations-in-Part (CIPs)
• Take Home Points:
o
o
o
o
o
o
If the patent application was already filed and/or issued,
identify it in the assignment.
Do not rely on boilerplate language.
Watch out for singular and plural forms of intellectual
property in your assignments.
Consider language in assignments preventing the
inventor filing CONs/DIVs/CIPs without approval.
Consider instead filing CIPs as straight utility
applications.
Watch out for consultants and conflicts of interest.
Mergers and Acquisitions - CIPs and
Security Interests
Gerber Scientific Int'l v. Satisloh AG, No. 3:07-CV1382, (D. Conn., September 25, 2009, order)
• Parties
o
o
Plaintiff- Gerber Scientific International, Inc. ("Gerber").
Defendants- Satisloh AG and Satisloh North America,
Inc. ("Satisloh").
• Procedure
o
o
o
Gerber sues Satisloh for infringement of US Patent No.
5,485,771 ("'771 Patent").
Satisloh moves to dismiss because Gerber does not
own the '771 patent due to a break in assignment chain
and thus lacks standing.
District Court denies motion.
Gerber- Assignments Diagram
Gerber- Assignments Diagram
Gerber Scientific- Key Assignment Language
• Inventors Assign '394 Application to Pilkington
o
December 2, 1991, the inventors assigned the ‘394
application “and all divisions, continuations, and
continuations-in-part of said application, and reissues and
extensions of said Letters Patent or Patents” to Pilkington
Visioncare, Inc. (emphasis added).
• Coburn Acquires Pilkington
On March 9, 1992, Pilkington assigned the ‘394 application,
along with 27 issued patents and 12 other pending
applications to Coburn.
o The assignment transferred “all its right, title and interest in,
to and under said Letters Patent and patent applications and
the inventions covered thereby and any divisions, reissues,
continuations and extensions thereof.”
o
Gerber- Assignments Diagram
Gerber Scientific- Satisloh Arguments
• Pilkington to Coburn Assignment: the March 9, 1992
Assignment from Pilkington to Coburn did not include the
'350 (CIP) application ('771 Patent).
o
o
o
Pilkington did not transfer ownership of future CIPs of the
'394 (Parent) application.
The assignment transferred “all its right, tittle and interest
in, to and under said Letters Patent and patent applications
and the inventions covered thereby and any divisions,
reissues, continuations and extensions thereof.”
Assignment does not use the term "continuations in part“.
• The April 27, 1993 assignment of the '771 patent (CIP)
from the inventors to Coburn was a nullity because
inventors already assigned any CIP of the '834
application to Pilkington.
Gerber Scientific- Court's Reasoning
• Issue: Whether the specific term "continuation in part" was
necessary to transfer title of the future '771 (CIP) Patent?
o
o
Courts have found broadly worded contracts and
assignments to include future CIPs without the term
"continuation in part".
Intent of the Parties meant to include CIPs
─ Broad language: “all rights title and interest in” 27
patents and 13 pending patent applications.
 This language would logically include CIPs.
─ Pilkington relinguished any right to "continuations and
extensions."
 From this language, it is Illogical to conclude that
Pilkington intended to retain rights to CIPs.
Gerber- Assignments Diagram
Gerber Scientific- Satisloh Arguments
• Coburn to J.P. Morgan Collateral Assignment: J.P.
Morgan is still the owner of the '771 (CIP) Patent.
o
o
The Patent Collateral Assignment states “assignor
hereby grants, assigns and conveys to Lender the entire
right, title, and interest of Assignor in and to the
Patents.”
Gerber has not produced documents showing re-vesting
of the title.
Gerber Scientific- Court's Reasoning
• Issue: Whether J.P. Morgan still possesses rights to
the '771 Patent (future rights to the '350 application)?
o
o
As a general rule, “an assignment made as collateral
security for a debt gives the assignee only a qualified
interest in the assigned chose, commensurate with the
debt or liabilities secured", even if the assignment is
written in absolute terms. (citations omitted)
J.P. Morgan filed UCC-1 form in Florida to record its
security interest.
 Such forms are not necessary if party holds full
ownership.
Gerber Scientific- Court's Reasoning
• Issue: Whether J.P. Morgan still possesses rights to the
'771 Patent (future rights to the '350 application)?
o
o
o
Even if J.P. Morgan had full ownership at one point, it does
not have it now.
The collateral assignment states: “at such time as assignor
shall completely satisfy all of the obligations and the
Security Agreement terminates in accordance with Section
7.1 thereof, then this Assignment shall terminate and
Lender, at Assignor’s expense, shall execute and deliver
to Assignor all deeds, assignments and other instruments as
may be necessary or appropriate to revest in Assignor full
title to the interest then held by Lender in the Patents.”
"May" language implies that deeds or assignments might not
be necessary to re-transfer the patents.
Gerber Scientific- Court's Reasoning
• Issue: Whether J.P. Morgan still possesses rights to
the '771 Patent (future rights to the '350 application)?
o
o
J.P. Morgan filed an express termination of interest.
J.P. Morgan declares that it no longer has rights in the
patents.
Gerber Scientific
• Take Home Points/Questions
Nullity issue - could you be recording the wrong Assignment
if parent assignment includes CIPs?
o In addition, note MPEP § 306:
─ "In the case of a substitute or continuation-in-part
application, a prior assignment of the original
application is not applied >(effective)< to the substitute
or continuation-in-part application because the
assignment recorded against the original
application gives the assignee rights to only the
subject matter common to both applications.
Substitute or continuation-in-part applications require
>the recordation of< a new assignment if they are to be
issued to an assignee. >See 37 CFR 3.81.<" (emphasis
added).
o
Foreign Patent Office Issues
Foreign Patent Office Issues
• EPO Opposition of EP 1 007 593 to GE Plastics Japan
K.K.
o
Issue: Timing requirements for identity of Applicants for a
Paris Convention priority claim for an EPO application
• GE Plastics Japan Ltd was a joint venture company in
which General Electric Company held a major interest. It
was the current policy that General Electric Company be
responsible for the filing of foreign application on the basis
of application made in Japan by GE Plastics Japan Ltd.
• The main issue was whether GE could claim priority in its
EPO application to its earlier filed JPO application even
though both applications named different applicants.
GE Plastics Opposition
GE Plastics Opposition
• Article 87(1) EPC states:
o
"A person who has duly filed ... an application for a patent
..., or his successors in title, shall enjoy, for the purpose of
filing a European patent application in respect of the
same invention, a right of priority during a period of twelve
months from the date of filing of the first application."
• Boards of Appeal of the European Patent Office
o
o
"From the wording of this provision it is clear that the right to
claim priority belongs to the person who has duly filed in or
for any state party to the Paris Convention for the Protection
of Industrial Property, an application for a patent, or to his
successors in title."
From this language, claim of priority needs identity of
applicants.
GE Plastics Opposition
GE Plastics Opposition- EP Assignment
• Boards of Appeal of the European Patent Office
o
o
"Although the European patent 1 007 593 in respect
of the European patent application No. 98 938 865.7,
has been transferred on 15 March 2005 to GE Plastics
Japan K.K [(]which is the English language name for
Nihon GE Plastics K.K), this is not relevant to the
question whether General Electric Company was
entitled to claim priority from the Japanese patent
application No. 24986597 when it filed the European
Patent application No. 98 938 865 on 31 August 1998."
In other words, the indentity of applicants matters when
the EPO application is filed.
GE Plastics Opposition- EP Assignment
• Boards of Appeal of the European Patent Office
o
"General Electric Company can only be considered as
the owner of the right of claiming priority from the
Japanese patent application No. 24986597 for the
European patent application No. 98 938 865.7, provided
it is established that the succession in title from Nihon
G.E. Plastics K.K to General Electric Company occurred
before the end of the twelve month period starting from
29 August 1997."
GE Plastics Opposition
GE Plastics Opposition- US Assignment
• Boards of Appeal of the European Patent Office
o
o
o
Not a formal transfer: "the assignment of priority rights has
to be in writing and has to be signed by or on behalf of the
Parties to the transaction."
Not all parties signed: the US Assignment "has been
signed only by the inventor (Mr Yuzuru Sawano) and not by
all the Parties to the transaction (i.e. General Electric
Company and Nihon G.E. Plastics K. K.) and that it merely
refers to 'all rights of priority resulting from the filing of
said United States application' (emphasis by the Board)
and not from the Japanese patent application JP 24986597."
Assignment too late: the US Assignment "would in any
case at best have shown that the alleged assignment had
been made on 15 October 1998, i.e. well after the end of the
twelve month period starting on 29 August 1997."
GE Plastics Opposition
GE Plastics Opposition- Emails
• Boards of Appeal of the European Patent Office
o
"[E]ven if an intention to transfer priority rights might
have been be discerned from documents D33a
and D33b [emails], the Board can only state that this
intention has not been finalized in a form which would
indubitably establish that the transfer of the priority
rights for the filing of an European patent application on
the basis of the Japanese patent application JP
24986597 has taken place before the end of the twelve
month period starting on 29 August 1997."
GE Plastics Opposition
• Boards of Appeal of the European Patent Office
o
"Since for this reason alone the priority from
the Japanese patent application JP 24986597 filed
on 29 August 1997 cannot validly be claimed for
the European patent application No. 98 938 865.7..."
• "It thus follows from the above considerations that
the filing date of the European patent application 98
938 865.7 for the purposes of Article 54(2) EPC is 31
August 1998."
• Result: Only entitled to EPO Filing Date.
Lose JPO filing date.
GE Plastics Opposition
• Take Home Points
o
o
o
o
Check corporate assignment policy so that you do not
run into issues in the EPO with different corporate
applicants in priority chain.
Have all assignments executed before Paris Convention
deadlines.
─ This includes assignments for provisional
applications.
Check your US assignments so that they are more
explicit in the applications they cover.
Consider adopting European practice of having both
parties execute the assignment.
Some Other Cases
• Imation v. Koninklijke Philips Electronics (Fed. Cir.
2009)
o
Contract Interpretation- Later-formed subsidiaries were
included within license agreement.
• Asymmetrx, Inc. v. Biocare Medical, LLC (Fed. Cir.
2009)
o
Exclusive commercial licensee AsymmetRx, Inc. did
not have standing to bring a patent infringement suitneeded to join Harvard (Harvard retained substantial
rights).
Want to know more?
Chuck Schmal
Patent Attorney
Woodard, Emhardt, Moriarty, McNett & Henry LLP
Chase Tower
111 Monument Circle, Suite 3700
Indianapolis, IN 46204
317.634.3456
cps@uspatent.com
www.uspatent.com
Midwest Intellectual Property
Symposium
Current Topics Concerning Corporate
Ownership and
Licensing of Intellectual Property
November 19, 2009