Who Owns Employee Created Inventions? by Stephen Lewellyn, Esq.

The body of law surrounding invention ownership is hypertechnical and unforgiving. Departing from traditional property law principals, ownership of employee created inventions is an unintuitive web of intertwined federal and state law. However, properly prepared employment agreements, well planned policies, and due diligence will help you from becoming snared by the web.

Inventorship is governed by federal law and the default rule gives ownership of inventions to the creator, i.e., the inventor or co-inventors if multiple people collaborated together. Whereas patent and technology agreements, such as, employment agreements with intellectual property clauses, are for the most part, governed by state law and vary from state-to-state.

There is, however, a pretty significant nuance where federal law steps in when an assignment of rights in an invention is made prior to the existence of the invention. Such future interest clauses are routinely found in employment contracts. And, if not properly drafted, the employer could be left without ownership. The law is so hypertechnical that using the phrase “agree to assign,” rather than the phrase “do hereby assign” could cost the employer ownership of valuable technology created by its employees. Unfortunately, employers often find themselves caught by this trap when it’s too late to fix.

Having the ability to enforce patent rights in a lawsuit is one situation where improperly drafted agreements can cause havoc. Under federal law, to bring a patent infringement lawsuit the plaintiff must have legal title to the patent being enforced, and each owner must join the suit as a plaintiff. If these requirements are not satisfied, then there is no legal basis (standing) to bring the suit. Imagine being a company, whose success depends upon controlling certain technology that was developed by its employees, to learn that you don’t own the technology or patent because ownership was never properly transferred from the employee-inventors. And to make matters even worse, the employee-inventors have transferred ownership of the technology to your competitor!

Mergers and acquisitions is another situation where agreements not following the jagged contour of the law cause serious problems. Intellectual property is often an employer’s most valuable asset. And, unfortunately, as in the above-described situation, it’s not until a merger or acquisition deal falls apart that an employer learns it doesn’t have ownership of those valuable assets.

To make it more complicated, some states have enacted laws imposing requirements on employers that if not correctly followed could result in an otherwise well drafted employment agreement being nullified as it relates to invention ownership. As of February 25, 2016, California, Delaware, Illinois, Kansas, Minnesota, Nevada, North Carolina, Utah, and Washington have assignment of employee inventions laws.

And, if this wasn’t enough, we haven’t even touched upon the shop right doctrine, the equitable title doctrine, federally-funded inventions in federal contractors, or government employees. Indeed this area of law is complex and requires, if not ought right demands, proactive practices by employers. One of the best ways to be proactive is to have properly drafted agreements signed by all employees whether they are anticipated to develop technology for the company or not.



Certiorari Denied for Review of Inter Partes Review by Kyle Chapin, Esq.

In 2011, the Leahy-Smith America Invents Act (AIA) was enacted by Congress which among other things, established a new post-grant review process, Inter Partes Review (IPR), and a governing body, Patent Trial and Appeal Board (PTAB), within the United States Patent and Trademark Office (USPTO) to oversee this process. Specifically, the AIA converted the inter partes reexamination proceeding into the IPR Process, which essentially took the proceeding from an examinational procedure to an adjudicative, quasi-trial proceeding.

The IPR process has been widely popular. From September 16, 2012 to August 31, 2016, the USPTO has reported that there have been a total of 4,995 IPRs were filed with PTAB. This is likely due to the fact that IPRs, while not cheap, are cheaper than federal litigation. However, recently the process has been called into question, and several parties have requested the Supreme Court to weigh in on the process.

Most recently, on Tuesday, October 11, 2016 the Supreme Court denied a Petition for Writ of Certiorari that requested the review the constitutionality of the IPR process. This petition, filed by J. Carl Cooper and eCharge Licensing LLC questioned whether PTAB, an agency court, had the constitutional right to assert judicial power and cancel patents. Although this petition was denied, Cooper filed a separate Petition for Writ of Certiorari in July, which raises a similar issue.

Are You Lovin’ It? McDonald’s Sued for Copyright Infringement by Artist Dash Snow’s Estate by Alexandra Taylor, Esq.

Graffiti artwork has been around for hundreds of years, and as of late graffiti artists are taking their art and intellectual property rights seriously. Fast-food giant McDonald’s was sued in federal court in California this week by the estate of Dash Snow, an American artist based in New York who was praised for his unapologetic creations. Snow’s pseudonym “SACE” has popped up in McDonald’s graffiti-themed restaurants both in the United States and the United Kingdom as what his estate alleges is a “brazen copy” of his work. After discovering the graffiti in June of 2016, Snow’s family sent formal requests to McDonald’s which resulted in no changes to company’s restaurants. Alleging copyright infringement and other various trademark and copyright claims, Snow’s family found the filing of the lawsuit necessary to protect the artist’s legacy and value. For further reading, the case is BERREAU v. MCDONALD’S CORPORATION ET AL, 2:16-cv-07394.

What is the name of the newest NHL expansion team? By Kyle Chapin, Esq.

For the Hockey fans out there, you probably already know that there is going to be an expansion team added to the National Hockey League beginning in the 2017-2018 season. And that that team will be playing in Las Vegas, Nevada at T-Mobile Arena on the strip. But, what no one knows as of yet, is what the team will be called.

Some clarity may have been provided with the filing of several US Trademark Applications by Black Knight Sports and Entertainment LLC, the owner of the Las Vegas team. According to these applications, the team could be named: the Silver Knights, the Golden Knights, or the Desert Knights. We won’t know whether this is meant to mislead us or not until the team makes an official announcement, which is supposed to take place at the end of this month.

Patent Priority Claim: Inherent Disclosure is Enough by Stephen Lewellyn, Esq.

On September 20, 2016, the Federal Circuit issued a precedential opinion holding that inherent disclosure in a priority document is enough to meet the written description requirement for a patent claim in a later filed patent application.

The case involves U.S. Patent Number 5,344,915, owned by Abbot, and directed toward Tumor Necrosis Factor α binding protein (TBP-II). The U.S. patent application leading to this patent was filed in 1990 and claimed priority to foreign patent applications filed in 1989. The issue in this case is whether the U.S. patent application was entitled to the 1989 filing date of the foreign applications. If the U.S. patent application is not entitled to the early filing date, the U.S. patent would be invalid over a prior art publication made after the 1989 filing date but before the 1990 filing date.

To be entitled to the early filing date, the claims in the U.S. patent must be supported by the written description contained in the earlier foreign patent applications. The problem for Abbot centered on whether that written description existed. The Court, affirming the lower court’s holding, found that while the written description did not identify the sequence claimed by the U.S. patent, the written description did explain how to make TBP-II. On this basis, the Court determined that the claimed sequence was inherently disclosed in the written description and the U.S. patent was entitled to the early, 1989 filing date. Consequently, the U.S. patent was held to be valid over the intervening prior art publication – giving Abbott a win in a 20 year-long battle related to this patent.


Pizza by the Beach: TTAB Issues Precedential Opinion re: Issue Preclusion and Standing by Alexandra Taylor, Esq.

On August 29, 2016, the Trademark Trial and Appeal Board issued a precedential opinion holding that issue preclusion applies to Board determinations of standing. NH Beach Pizza LLC initially filed a cancellation proceeding against Cristy’s Pizza Inc. seeking cancellation of the BEACH PIZZA word mark, alleging that it will be damaged by the generic term “beach pizza”, and that consumer confusion has already occurred in the marketplace. The Board dismissed said cancellation proceeding for lack of standing: “Specifically, the Board found that the record was ‘utterly devoid of any evidence concerning the nature of Petitioner’s commercial activities and its interest in Respondent’s registered BEACH PIZZA mark.’”

Several months later, NH filed a second cancellation proceeding, alleging the same grounds as the above-mentioned cancellation proceeding. Cristy’s Pizza responded by filing a motion for summary judgment stating that NH’s claims are barred by issue preclusion, as the issue of standing was previously decided by the Board. Upon review, the Board granted Cristy’s Pizza’s motion for summary judgment and dismissed the proceeding with prejudice: “Because issue preclusion bars Petitioner from re-litigating the issue of standing decided in the Prior Action, Petitioner cannot prove the threshold requirement of standing in this proceeding.” For a full review of the Board’s Order and the elements of issue preclusion, visit the link above.


The Weight of an Expert Report by Kyle Chapin, Esq.

On August 19, 2016, the Federal Circuit vacated the district court’s summary judgement ruling which previously held the claims of Semcon’s U.S. Patent No. 7,156,717 (“‘717 Patent”) invalid as being anticipated by U.S. Patent No. 6,010,538. In its motion for summary judgment, Micron relied heavily on its expert’s report to show the claims of the ‘717 Patent were invalid, whereas Semcon chose not to rebut Micron’s expert report with an expert of their own.

This decision not to rebut the expert report appeared to have swayed the district court in holding the ‘717 Patent invalid on summary judgement. However, the Federal Circuit, in this ruling, reminded us that a party who does not submit a competing expert report should not automatically be seen as having rung their own death knell.