Monday 12 October 2015

Omitted Inventors May Have Standing To Sue for Patent Correction Based On Injury to Reputation

The U.S. Court of Appeals for the Federal Circuit recently ruled that a plaintiff not named as a joint inventor on several patents and pending patent applications has standing to maintain an action to correct inventorship under 35 U.S.C. § 256, despite the fact that he previously assigned all rights in the patented inventions to his former employer. Shukh v. Seagate Technology, LLC, Case No. 2014-1406 (Fed. Cir. Oct. 2, 2015). The decision recognizes for the first time that an omitted co-inventor may have an enforceable interest in correcting inventorship based on evidence that the correction would enhance the inventor’s reputation. A copy of the decision is HERE

The plaintiff in Shukh was a solid state physics research scientist at defendant Seagate Technology, LLC. At the outset of his employment, he signed Seagate’s standard “inventions agreement,” which prohibited him from filing a patent application without permission from Seagate, and included a present assignment to Seagate of all future inventions made during his term of employment. Subsequently, Shukh contended that Seagate failed to name him as a co-inventor on six patents and four pending patent applications covering subject matter that he had allegedly contributed. Seagate terminated him in 2009, in part due to his confrontational manner and reputation for claiming credit for discoveries made by other Seagate researchers. He then filed suit seeking to correct inventorship of the patents under § 256 and asserting several state-law tort and breach of contract claims.

At the motion to dismiss stage, the U.S. District Court for the District of Minnesota ruled that Shukh lacked any ownership or financial interest in the patents and applications based on his assignment of all rights to Seagate. The district court also granted summary judgment on the § 256 claim on the ground that the plaintiff lacked standing.

On appeal, the Federal Circuit vacated and remanded on the § 256 claim, and affirmed the district court’s other rulings. The appeals court declined to revisit the effect of the Seagate inventions agreement, stating that the district court’s ruling that Shukh lacked any ownership or financial interest in the patents was supported by binding precedent. Filmtec Corp. v. Allied-Signal, Inc., 939 F.2d 1568 (Fed. Cir. 1991). 

Although the Federal Circuit vacated and remanded the district court’s grant of summary judgment, it did rule that Shukh demonstrated standing to pursue its claim to correct inventorship. The court announced that in some situations, an inventor may have a reputational interest in being properly designated as the co-inventor on a patent:

Today, we hold that concrete and particularized reputational injury can give rise to Article III standing. As we noted in [Chou v. Univ. of Chi., 254 F.3d 1347, 1357 (Fed. Cir. 2001)], “being considered an inventor of important subject matter is a mark of success in one’s field, comparable to being an author of an important scientific paper.” 254 F.3d at 1359. We reasoned that “[p]ecuniary consequences may well flow from being designated as an inventor.” Id. This is particularly true when the claimed inventor is employed or seeks to be employed in the field of his or her claimed invention. For example, if the claimed inventor can show that being named as an inventor on a patent would affect his employment, the alleged reputational injury likely has an economic component sufficient to demonstrate Article III standing.

Slip op. at 7.

In addition, the court found that Shukh presented enough evidence of a specific reputational injury to create a triable issue on his claim to correct inventorship. First, evidence and expert testimony established that being a named inventor on patents was a significant factor in the professional reputation and stature of scientists in Shukh’s field. In particular, Seagate itself recognized issued patents as an indicator of good performance. Although the district court observed that the plaintiff already had an excellent reputation as an inventor, the Federal Circuit noted that the evidence suggested that his reputation would be enhanced had he been named on multiple additional patents and applications. The court also noted that being named on the additional patents could have rehabilitated Shukh’s bad reputation for claiming credit for Seagate innovations, since it would tend to validate his role as a co-inventor. Finally, Shukh presented evidence that his bad reputation was a factor in his inability to find employment after termination from Seagate. The Federal Circuit found that a jury could infer that his status as a co-inventor on additional Seagate patents would rehabilitate his reputation, which would improve his employment prospects and have a direct financial impact.

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