midwest intellectual property symposium current topics concerning corporate ownership and licensing...

Midwest Intellectual Property Symposium

Current Topics Concerning Corporate Ownership and

Licensing of Intellectual Property

November 19, 2009

Recent Ownership Themes

• Current Topics:o Collaborationso Security Interestso Continuations-in-Parto 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.

• Historyo One of the named inventors (Holodniy) of the patents at

issue signed a Copyright and Patent Agreement ("CPA") upon joining laboratory at Stanford.

o Holodniy visited Cetus to learn the technology.─ Holodniy signed a Visitor's Confidentiality Agreement

("VCA").o Research for the technology at Stanford was funded by the

National Institutes of Health ("NIH").o Stanford filed the applications for the patents at issue – the

'730, '705 and '041 patents.

Stanford v. Roche (Fed. Cir. 2009)


• Procedural Historyo Stanford sues Roche for patent infringement.o Roche: Stanford lacks standing - Roche owns, has a

license for, and/or a shop right on the asserted patents.

• District Courto Roche's ownership was barred by California's statute of

limitation and the Bayh-Dole Act.o Roche's license claims fail because Stanford never

consented to Roche's acquisition of Cetus.o Roche lacked shop right to the patents.


• Federal Circuito 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.o Thus, Roche can assert its ownership as a bar to

Stanford's standing.


• Federal Circuito 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.


• Federal Circuito 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.


• 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.


• Federal Circuit 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

o Stanford was charged with notice of its employees' assignments (the VCA).

o Stanford was not a BFP.


• Bayh-Dole Act- 35 USC § 200+o US Government to take title under certain conditions.o 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 Bayh-Dole does not void prior contractual transfers of rights.o Thus, Bayh-Dole did not automatically void the patent rights

Cetus received from Holodniy.


• Federal Circuito Roche declaratory judgment of ownership barred by

California's statutes of limitation.o Stanford lacks standing because it cannot establish

ownership of Holodniy's interest.


• Take Home Points:o Review the language in your assignments to make sure

that it contains a present assignment of patent rights. ─ "I do hereby assign"

o 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 Historyo Sky Technologies ("Sky") sues SAP AG and SAP

America ("SAP") for patent infringement.o SAP moved to dismiss because Sky lacks standing

because chain of title was broken.o District Court finds the patents in suit were transferred

through foreclosure proceedings.o SAP files an interlocutory appeal to the Federal Circuit.

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 SAP: No writing exists transferring the patents from

Ozro to XACP.─ 35 USC § 261requires a transfer of ownership to be

in writing.o 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.


• 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 Japanese inventor died intestate; wife (and daughters)

subsequently transferred patent rights to the plaintiff.o Akazawa is controlling in this case.


• 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.


• Fed Cir.: Policy Justifications for Transfers by Operation of Lawo Large number of patent titles subject to security

interests would be invalid.o If not, value of patents would diminish because patent

owners would be limited in collateral sources.o Impractical to have a written assignment from a

business that may no longer exist.


• Which law to apply?o Federal law usually is used to determine the validity

and terms of an assignment.o State law controls any transfer of patent ownership by

operation of law not deemed an assignment.

• In this case, Massachusetts Law applies.o XACP followed Massachusetts law in perfecting

ownership of the patents through the security interest.o Massachusetts law does not require a writing--Transfer

Statements are merely recognized and not mandatory to transfer patents.


• Summary of Ways of Transferring Ownershipo Assignment: need a writing.o 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)

• Patentso '553 Patent (Parent)o '742 Patent: Continuation-in-Part (CIP) of the '553

Patent

• Inventor (Bennett) consulted with both Euclid and Vector

• Assignmento Inventor (Bennett) to Vector o Executed 8 months after after the '742 Patent (CIP)

issuedo 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 Historyo 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.

o 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:


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,


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;


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 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.

o 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)

o “applications”—plural but “issued US patent”—singular.

Euclid - Federal Circuit (Majority)

• Assignment was ambiguous for CIP ('742 Patent).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.

o '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 parto Concurs: District Court erred in granting summary judgment of

ownership to Vectoro Dissents: Contractual intent requires a new trial

• Argumentso 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)

Continuations-in-Part (CIPs)

• Take Home Points:o If the patent application was already filed and/or issued,

identify it in the assignment.o Do not rely on boilerplate language.o Watch out for singular and plural forms of intellectual

property in your assignments.o Consider language in assignments preventing the

inventor filing CONs/DIVs/CIPs without approval.o Consider instead filing CIPs as straight utility

applications.o 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-CV-1382, (D. Conn., September 25, 2009, order)• Parties

o Plaintiff- Gerber Scientific International, Inc. ("Gerber").o Defendants- Satisloh AG and Satisloh North America,

Inc. ("Satisloh").

• Procedureo Gerber sues Satisloh for infringement of US Patent No.

5,485,771 ("'771 Patent").o Satisloh moves to dismiss because Gerber does not

own the '771 patent due to a break in assignment chain and thus lacks standing.

o District Court denies motion.

Gerber- Assignments Diagram

Gerber Scientific- Key Assignment Language

• Inventors Assign '394 Application to Pilkingtono 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 Pilkingtono 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.”

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 Pilkington did not transfer ownership of future CIPs of the

'394 (Parent) application.o 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.”

o 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 Courts have found broadly worded contracts and

assignments to include future CIPs without the term "continuation in part".

o 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 Scientific- Satisloh Arguments

• Coburn to J.P. Morgan Collateral Assignment: J.P. Morgan is still the owner of the '771 (CIP) Patent.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.”

o Gerber has not produced documents showing re-vesting of the title.


• Issue: Whether J.P. Morgan still possesses rights to the '771 Patent (future rights to the '350 application)?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)

o J.P. Morgan filed UCC-1 form in Florida to record its security interest. Such forms are not necessary if party holds full

ownership.


• Issue: Whether J.P. Morgan still possesses rights to the '771 Patent (future rights to the '350 application)?o Even if J.P. Morgan had full ownership at one point, it does

not have it now.o 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.”

o "May" language implies that deeds or assignments might not be necessary to re-transfer the patents.


• Issue: Whether J.P. Morgan still possesses rights to the '771 Patent (future rights to the '350 application)?o J.P. Morgan filed an express termination of interest.o J.P. Morgan declares that it no longer has rights in the

patents.

Gerber Scientific• Take Home Points/Questions

o 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).

http://www.uspto.gov/web/offices/pac/mpep/documents/appxr_3_81.htm#cfr37s3.81

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


• 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 Officeo "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."

o From this language, claim of priority needs identity of applicants.

GE Plastics Opposition- EP Assignment

• Boards of Appeal of the European Patent Officeo "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."

o 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 Officeo "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- US Assignment

• Boards of Appeal of the European Patent Officeo 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."

o 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."

o 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- Emails

• Boards of Appeal of the European Patent Officeo "[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."


• Boards of Appeal of the European Patent Officeo "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 Check corporate assignment policy so that you do not run into issues in the EPO with different corporate applicants in priority chain.

o Have all assignments executed before Paris Convention deadlines.

─ This includes assignments for provisional applications.

o Check your US assignments so that they are more explicit in the applications they cover.

o 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 suit- needed to join Harvard (Harvard retained substantial rights).

Want to know more?Chuck SchmalPatent Attorney

Woodard, Emhardt, Moriarty, McNett & Henry LLPChase Tower

111 Monument Circle, Suite 3700Indianapolis, IN 46204

[email protected]

Midwest Intellectual Property Symposium

Current Topics Concerning Corporate Ownership and

Licensing of Intellectual Property

November 19, 2009

midwest intellectual property symposium current topics concerning corporate ownership and licensing...

Documents

o holodniy

o research

federal circuit o

procedural history o

stanford lacks

collaborations slide

o roches license claims

federal circuit law