Summary
evaluating sufficiency of corroborating evidence in granting summary judgment on motion to correct inventorship
Summary of this case from Massachusetts Eye & Ear Infirmary v. Novartis Ophthalmics, Inc.Opinion
Case No. 02-1557-KI.
August 23, 2004
Joseph S. Makuch, Craig Randall Rogers Hillary A. Brooks, Marger Johnson McCollom, P.C., Portland, Oregon, Attorneys for Plaintiff.
Christopher J. Lewis, Schwabe Williamson Wyatt, Portland, Oregon and
Ronald M. Wawrzyn, Foley Lardner, Milwaukee, Wisconsin, Attorneys for Defendant.
OPINION
Plaintiff Smart Parts, Inc. ("Smart Parts") brings a patent infringement action against WDP, Ltd. ("WDP") regarding Smart Parts' patent for an electropneumatic paintball gun. Smart Parts contends it is the sole owner of U.S. Patent No. 6,474,326 ("the '326 patent"). WDP moves for summary judgment of inventorship, arguing that Dr. Edward Hensel, an individual not named as an inventor, is the sole inventor of the patent or at the very least a co-inventor, and having assigned his rights in the patent to WDP, Smart Parts has no standing to sue. Smart Parts also moves for summary judgment, requesting a declaration that Dr. Hensel was not an inventor, and alternatively that WDP is prevented by laches and estoppel from rasing an inventorship challenge. For the following reasons, I deny Smart Parts' motion and grant WDP's motion.
FACTS
Smart Parts, in conjunction with Pneu Ventures, Inc. ("Pneu Ventures"), claims to have invented the electropneumatic paintball gun. Smart Parts has prosecuted multiple patents relating to this gun. At issue in this case is the most recent of those patents, the '326 patent, which has an effective filing date of January 16, 1996, based on the filing date of the parent application.
Smart Parts claims that its introduction of the integrated electropneumatic loading and firing operations revolutionized the sport of paintball by permitting, among other things, electropneumatic control of the loading and launching sequences through solenoid valve-controlled pistons and cylinder assemblies. The mechanically-operated guns on the market prior to the electropneumatic gun were faulty because they experienced problems of slow firing, broken paintballs, and blowback of the air into the loading tube. In paintball, the faster the firing rate of the paintball gun, the more paintballs that can be unloaded on the other team, and the greater the chance of eliminating opponents. If, however, a high firing rate causes paintballs to break during the firing or causes insufficient loading due to "marker blowback," the usefulness of the gun is significantly impaired. Smart Parts claims that its gun permits much higher firing rates without the problems of broken paint and blowback.
The '326 patent lists as inventors William ("Billy") Gardner, Jr. and Adam Gardner, who were and are associated with Smart Parts, and Raymond Gaston and David Smith, who were associated with Pneu Ventures. Gaston and Smith assigned their rights in the patent to Pneu Ventures. Through a series of transactions, Smart Parts acquired Pneu Ventures' rights in the '326 patent and now contends it is the sole owner of the patent.
Dr. Edward Hensel, PE, who was then a professor at New Mexico State University, became a shareholder of Pneu Ventures in January 1995, by paying money to Pneu Ventures in exchange for 80 shares of stock. In a letter dated January 2, 1995, Pneu Ventures' Chief Operating Officer, Hugh Cronin, provided information to Dr. Hensel regarding joining Pneu Ventures. Attached to the letter were copies of the corporate by-laws and shareholder agreement. In referencing the attachments, the letter also provided "You will note that individual names appear in certain sections. If you elect to join us your name would be added to those, as will the names of Ray and Dave when they are in a position to officially be a part of [Pneu Ventures]." Pl. Ex. I at 1.
Article VIII of the Employment and Stock Ownership Agreement ("Agreement") provided:
a) Each Shareholder employed by the Company shall promptly disclose to the Company all ideas, discoveries, designs, improvements, innovations and inventions (collectively referred to herein as "inventions"), whether patentable or not, either relating to the existing or contemplated business, products, plans, processes, or procedures of the Company, or any parent or subsidiary of the Company, or suggested by or resulting from his work at the Company, or resulting wholly or in part from the use of the Company's time, material, facilities or ideas, which he made or conceived or may make or conceive, whether or not during working hours, alone or with others, at any time during the term of this Agreement or within one year thereafter, and he agrees that all such inventions shall be the exclusive property of the Company.
b) Each Shareholder hereby assigns to the Company all his rights and interests in and to all such inventions and all patents which may be obtained on them, in this and all foreign countries. At the Company's expense, but without charge to it, each Shareholder agrees to execute, acknowledge and deliver to the Company any specific assignments to any such inventions or other relevant documents and take any such further action as may be considered necessary by the Company at any time to obtain or defend letters patent in any and all countries or to obtain documents relating to registration, ownership or transfer of copyrights, or to vest title in such inventions in the Company or its assigns or to obtain for the Company any other legal protection for such inventions.
Pl. Ex I at 33.
Page 16 of the Agreement had a signature line, but Dr. Hensel never signed the Agreement. No one at Pneu Ventures ever followed up with Dr. Hensel about signing it. Pneu Ventures gave Dr. Hensel shares in the corporation without having him sign any shareholder agreement.
In or around April 1995, Dr. Hensel became involved in paintball gun design with Pneu Ventures. On April 25, 1995, Dr. Hensel met with representatives of Pneu Ventures regarding the possibility of designing an electropneumatic paintball gun. At the conclusion of this meeting, Dr. Hensel did not understand how to develop a complete and operative electropneumatic paintball gun. He does not believe that a person in the paintball gun field could have constructed an electropneumatic paintball gun without unduly extensive research or experimentation.
Between 1995 and 1996, Dr. Hensel worked at his home in New Mexico on the design and development of an electropneumatic paintball gun. Dr. Hensel set up a mini manufacturing facility in his garage to research and develop the first circuit board to be used in the gun. Dr. Hensel worked at one point around the clock for three days trying to get the timing circuit used in the gun to work. Smart Parts admits that Dr. Hensel designed at least one circuit board for use in a paintball gun identical to the paintball gun shown in Figure 1 of the '326 patent, on or before the effective filing date. As admitted by named inventor Raymond Gaston, Dr. Hensel designed the original working circuit board for the SHOCKER, Smart Parts' commercial embodiment. The circuit boards designed by Dr. Hensel were configured to send signals to one or more solenoid valves to control the timing of the loading and firing operations.
Hugh Cronin testifies to having many telephone conversations and in-person meetings with Dr. Hensel about his work in developing the electropneumatic paintball gun. On several occasions, Cronin made personal visits to Dr. Hensel's home in New Mexico to observe his work. Additionally, Dr. Hensel sent Cronin numerous detailed memos recounting his work on the paintball gun project.
According to Cronin, Dr, Hensel's involvement in the electropneumatic paintball gun project was essential, since no one at Pneu Ventures had expertise in electronics, and the paintball gun was to be controlled by electronics.
Cronin states as follows regarding Dr. Hensel's contributions:
Based on my personal contacts with Professor Hensel and observations of his experiments, I can attest to the fact that he designed a combination of elements which related to a firing chamber of an electropneumatic paintball gun that utilized solenoid valves that were configured to receive a regulated supply of compressed gas from a gas source and allow for the launch of a paintball during a firing operation. In putting into practice this design, Professor Hensel determined through his own testing, some of which I observed, the proper flow dynamics, volume pressures, velocity, ball parameters and trajectory for an electropneumatic paintball gun.
Additionally, Professor Hensel designed and developed an electrical timing circuit configured to receive electrical power and initiate a launching sequence of a paintball gun in response to a trigger pull. He also designed and developed the relationship of the electrical circuit with one or more solenoid valves — the circuit sends an electrical signal to a solenoid — to control a loading operation of the paintball gun. I personally witnessed in the late summer or early fall of 1995, Professor Hensel's work on the design and development of this electrical timing circuit in his home in New Mexico. I also received drawings from Professor Hensel of his electrical timing circuit.
Based on my communications with Professor Hensel, he designed and developed the electrical circuit to be placed on a circuit board within the paintball gun and configured to send electronic signals to one or more solenoids to control the timing of the loading and firing operations.
. . .
It was Professor Hensel who created the working combination of the electronics and other mechanical features of the paintball gun after extensive research and experimentation.
Cronin Dec. at 2-3.
In his deposition, after answering a series of questions regarding Dr. Hensel's role in the invention consistent with his statements in his declaration, Cronin stated about Dr. Hensel: "I would like to go on the record as saying one other thing. . . . There's no way in the world that gun would have worked without him." Cronin 4/1/04 Depo. at 190:16-20.
With respect to the role of Pneu Ventures, Dr. Hensel, Gaston and Smith in the development of the gun, as compared to the role of Billy Gardner and Adam Gardner, Cronin testified as follows:
A: We were doing all of the development side, yes. We had — frankly, at that point in time neither Billy Gardner nor Adam Gardner had the faintest notion how the gun worked.
Q: So you guys were doing all of that?
A: Yes.
Q: And that was being done by Hensel, Gaston and Smith, is that correct?
A: Primarily.
Cronin 4/1/04 Depo. at 66:10-18.
Named inventors Gaston and Smith were also questioned at length regarding Dr. Hensel's role in the development of the electropneumatic paintball gun. In his deposition, when asked what was Dr. Hensel's role in the electronics, Smith responded "The physical and detailed design of the electronics circuitry. He also manufactured the first circuit boards." Smith Depo. 12:23-13:2. When asked who invented the electrical circuit in this invention, referring to Claim 1 of the '326 patent, Smith responded "I would have to say Dr. Hentzel [sic]." Id. at 21:7. Gaston explained that Dr. Hensel "was meant to be the designer." Gaston Depo. at 46:16. Gaston further explained that he and others recognized that Dr. Hensel "would make something that would get the gun working," and that "he did a very good job."Id. at 46:20-22.
When questioned in his deposition about the role he and his brother Adam played in relation to what is claimed in the '326 patent, Billy Gardner testified as follows:
Q. When you first got the idea to design an electropneumatic paintball gun, can you place that with any event or time?
A. I believe it was in 1993.
Q. And what gave you the idea?
A. My brother and I were having a conversation. It came out of the conversation.
Q. And the brother, meaning Adam?
A. That's correct.
Q. And can you just give me a general — I know that was a long time ago; ten years. Can you give me a general sense of what you and he talked about?
A. I don't remember.
Q. You have absolutely no recollection?
A. None.
Q. Well, you must remember that you talked about electronic paintball guns; right?
A. I remember we had — we had a conversation and out of the conversation came the idea of electronics and paintball guns. Specifically, I can't remember the conversation. It was many years ago.
Q. But it definitely was about electronic paintball guns; not just a new paintball gun design?
A. It definitely involved electricity and paintball guns.
Q. And this was your — you're sure this was in 1993?
A. Yes.
Q. Do you have any documents which would corroborate that initial idea that you had?
A. No.
B. Gardner Depo. at 50-52.
Billy Gardner testified that he had very little contact with Dr. Hensel. He further testified that he would have to defer to Gaston and Smith in terms of how Dr. Hensel fit into the Pneu Ventures operation.
Smart Parts did not send data or other information to Dr. Hensel. Named inventor Adam Gardner barely knew Dr. Hensel, and may have met him only once.
Dr. Hensel kept a scientific notebook to carefully document his ideas, work and effort from April 14, 1995, through March 16, 1997, which is inclusive of the effective filing date of the '326 patent. The notebook has been notarized or witnessed in whole or in part by three different persons.
Of the four named inventors of the '326 patent, none but Gaston kept a scientific notebook detailing their contributions to the design or development of the gun. Gaston's notebook, which is unsigned and not corroborated, has gaps in time which were unexplained by Gaston in his deposition.
None of the named inventors had backgrounds in engineering or electronics.
Cronin testified that Billy Gardner had an electronically controlled paintball gun prior to 1994, referred to as the "mock-up," that was at least partially operable in the sense that the gun could be fired.
Although he was a shareholder of Pneu Ventures, Dr. Hensel was not separately compensated for his work on the design and the development of an electropneumatic paintball gun.
In addition to being a shareholder, at one point, Dr. Hensel served as board member and an officer of Pneu ventures, and signed several documents relating to third parties as the Vice President of Pneu Ventures. Most of these representations occurred when Dr. Hensel was involved with Pneu Ventures' efforts to address financial concerns over a loan with Key Bank.
During mid to late 1999 and early 2000 Key Bank foreclosed on its security interest in Pneu Ventures' assets. Dr. Hensel was a personal guarantor for at least some of Pneu Ventures' indebtedness to Key Bank. Key Bank brought suit against Pneu Ventures and each of the individual guarantors, including Dr. Hensel.
Collateral for Pneu Ventures' loans with Key Bank included Pneu Ventures' intangible assets. The listing of collateral in Key Bank's notice of private sale included "U.S. Patent Application Serial No. 08/586,960 filed January 16, 1996 entitled Pneumatically Operated Projectile Launching Device."
No one provided Dr. Hensel with a priority application before January 16, 1996. Dr. Hensel was not aware of the filing of the priority application. Dr. Hensel testifies that he was generally aware that the Gardners and Smith and Gaston discussed the possibility of seeking patent protection for an electropneumatic paintball gun, but he was unaware that these individuals had filed for the '843 patent, the '326 patent, or any patents related to an electropneumatic paintball gun on January 16, 1996.
The '326 patent issued in November 2002.
During the summer of 2003, Dr. Hensel was contacted by WDP's counsel as well as an attorney in another case involving Smart Parts. Dr. Hensel states that he became convinced in the fall of 2003 that he should have been named as an inventor on the '326 patent. He explains that during that time he was reading the patent and looking at the claims, comparing what was in the claims and comparing that to the work he had previously done. Negotiations between Dr. Hensel's attorneys and WDP's attorneys resulted in an Assignment and Agreement in November 2003, whereby Dr. Hensel assigned his rights in the '326 patent and other patents to WDP in exchange for a $50,000 non-refundable payment as well as various additional payments contingent on the outcomes of the inventorship claim.
LEGAL STANDARDS
Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c). The initial burden is on the moving party to point out the absence of any genuine issue of material fact. Once the initial burden is satisfied, the burden shifts to the opponent to demonstrate through the production of probative evidence that there remains an issue of fact to be tried. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). On a motion for summary judgment, the evidence is viewed in the light most favorable to the nonmoving party. Robi v. Reed, 173 F.3d 736, 739 (9th Cir.), cert. denied, 528 U.S. 375 (1999).
DISCUSSION
I. Inventorship
WDP contends that Dr. Hensel was the sole inventor, and in the alternative a co-inventor, of the '326 patent. Smart Parts contends that the four named inventors, Billy Gardner, Adam Gardner, Raymond Gaston, and David Smith, are the proper and only inventors. The parties have filed cross motions for summary judgment, each party arguing it is entitled to a ruling in its favor on this issue as a matter of law.
Patent issuance creates a presumption that the named inventors are the true and only inventors. Hess v. Advanced Cardiovascular Sys., Inc., 106 F.3d 976, 980 (Fed. Cir.), cert. denied, 520 U.S. 1277 (1997). Inventorship is a question of law for the court. Sewall v. Walters, 21 F.3d 411, 415 (Fed. Cir. 1994). "Because there is a presumption that the inventors named on an issued patent are correct, misjoinder or nonjoinder of inventors must be proven by facts supported by clear and convincing evidence." Trovan, Ltd. v. Sokymat SA, 299 F.3d 1292, 1301 (Fed. Cir. 2002).
A patented invention may be the work of two or more joint inventors. See 35 U.S.C. § 116. Because "[c]onception is the touchstone of inventorship," each joint inventor must generally contribute to the conception of the invention. Burroughs Wellcome Co. v. Barr Lab., Inc., 40 F.3d 1223, 1227-28 (Fed. Cir. 1994). "Conception is the `formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention, as it is hereafter to be applied in practice.'" Hybritech, Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1376 (Fed. Cir. 1986) (quoting 1 Robinson on Patents 532 (1890)). An idea is sufficiently "definite and permanent" when "only ordinary skill would be necessary to reduce the invention to practice, without extensive research or experimentation." Burroughs Wellcome, 40 F.3d at 1228.
"The conceived invention must include every feature of the subject matter claimed in the patent." Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456, 1460 (Fed. Cir.), cert. denied, 525 U.S. 923 (1998). "Nevertheless, for the conception of a joint invention, each of the joint inventors need not `make the same type or amount of contribution' to the invention." Id. (quoting 35 U.S.C. § 116). "Rather, each needs to perform only a part of the task which produces the invention." Id.
However, an individual does not become a joint inventor by merely assisting the actual inventor after conception of the claimed invention. Sewall, 21 F.3d at 416-17. See also Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613, 624 (Fed. Cir. 1985) ("An inventor `may use the services, ideas and aid of others in the process of perfecting his invention without losing his right to a patent.'") (quotingHobbs v. U.S. Atomic Energy Comm'n., 451 F.2d 849, 864 (5th Cir. 1971)). "One who simply provides the inventor with well-known principles or explains the state of the art without ever having `a firm and definite idea' of the claimed combination as a whole does not qualify as a joint inventor." Ethicon, 135 F.3d at 1460 (internal quotations and citations omitted). One of ordinary skill in the art who simply reduces the inventor's idea to practice is not necessarily a joint inventor. Id. "To be a joint inventor, an individual must make a contribution to the conception of the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention." Fina Oil Chemical Co. v. Ewen, 123 F.3d 1466, 1473 (Fed. Cir. 1997).
A co-inventor need not make a contribution to every claim of a patent. See 35 U.S.C. § 116. A contribution to one claim is enough. SmithKline Diagnostics, Inc. v. Helena Lab. Corp., 859 F.2d 878, 888 (Fed. Cir. 1988). "[T]he critical question for joint conception is who conceived, as that term is used in the patent law, the subject matter of the claims at issue."Ethicon, 135 F.3d at 1460. Inventorship is determined by comparing the asserted co-inventor's contribution to the conception with the subject matter of the properly construed claims, in order to determine whether the correct inventors were named. Trovan, 299 F.3d at 1302.
For purposes of this motion, WDP accepts Smart Parts' claim construction that the claims of the '326 patent should be given their ordinary and customary meaning.
To show co-inventorship, the alleged co-inventor must prove his contribution to the conception of the claims by clear and convincing evidence. Id. at 1461. "An inventor's testimony respecting the facts surrounding a claim of derivation or priority of invention cannot, standing alone, rise to the level of clear and convincing proof." Price v. Symsek, 988 F.2d 1187, 1194 (Fed. Cir. 1993). The rule is the same for an alleged co-inventor's testimony. Ethicon, 135 F.3d at 1461. Therefore, an alleged co-inventor must supply evidence to corroborate his testimony. Id. Whether the inventor's testimony has been sufficiently corroborated is evaluated under a rule of reason.Id. "Under this analysis, `[a]n evaluation of all pertinent evidence must be made so that a sound determination of the credibility of the [alleged] inventor's story may be reached."Id. (quoting Price, 988 F.2d at 1195).
The Federal Circuit has explained that corroborating evidence may take many forms. Ethicon, 135 F.3d at 1461. Contemporaneous documents prepared by a putative inventor serve to corroborate his testimony. Id. Other evidence such as circumstantial evidence about the inventive process or oral testimony of someone other than the alleged inventor may also corroborate the putative inventor's testimony. Id.
WDP argues that Dr. Hensel was the sole inventor and at a minimum a joint inventor of the '326 patent because he designed the only patentable features of the '326 patent, namely the electrical circuit that controls the timing and operation of the piston and bolt to control the loading operation of the paintball gun, and placing the electrical circuit on a circuit board. WDP argues that Dr. Hensel is an inventor because he created a complete, operable and working electropneumatic paintball gun.
Dr. Hensel has testified that he invented at least some of what is claimed in the '326 patent. WDP relies on several pieces of evidence to corroborate Dr. Hensel's testimony. Dr. Hensel's design notebook contains months' worth of ideas, experimentation and research that reflect what Dr. Hensel put into designing an electrical circuit, timing circuit, circuit board, and how the elements work together. The notebook has been corroborated by others. Although I acknowledge that there is no requirement for the named inventors to demonstrate that they kept a similar notebook, I find it significant that aside from a somewhat limited notebook produced by Gaston, the four named inventors offer no documentation of their work or their contributions to the conception or reduction to practice of the claimed invention.
In addition to Dr. Hensel's notebook, WDP relies on the testimony of Cronin, Gaston and Smith regarding Dr. Hensel's role. As shown by the declaration and deposition excerpts quoted above, these individuals testified to the significant role Dr. Hensel played with respect to the '326 patent. For example, Cronin stated that "[i]t was Professor Hensel who created the working combination of the electronics and other mechanical features of the paintball gun after extensive research and experimentation." Cronin Dec. at 2-3. Smith testified that Dr. Hensel invented the electrical circuit recited in Claim 1 of the patent. Gaston testified that Dr. Hensel's role was that of doing the design work and that he invented the electrical circuits for the invention. I recognize that who invented a claim is a legal question about which these individuals are admittedly not qualified to give an opinion; but I nevertheless find their testimony regarding Dr. Hensel's contributions to be helpful and significant.
As with the lack of any documentation of the Gardners' work, Billy and Adam Gardner's testimony regarding their own contributions does not suggest the work of inventors. Billy Gardner could offer very little assistance in determining what he or his brother contributed to the '326 patent. As demonstrated from the lengthy deposition excerpt quoted above, Billy could not remember any details of the conversation between he and his brother wherein the two purportedly conceived of what is claimed in the patent. Although Smart Parts is correct that there is no specific requirement that inventors have engineering degrees or other formal training, the evidence also strongly suggests that neither Billy nor Adam could have invented what is claimed.
WPD contends that the electrical circuit is a claim limitation found in virtually every independent claim of the '326 patent. WPD presents an "inventorship matrix," which WDP contends shows the relationship between what is claimed in the '326 patent, what was contained in the prior art, and what was contributed by Dr. Hensel. Smart Parts contends that Dr. Hensel's contributions to the electrical circuit and circuit board are not reflected in the claims of the '326 patent. In other words, Smart Parts argues that Dr. Hensel simply designed the details of the electrical circuit, and the patent does not claim any of the details of the circuitry.
Smart Parts is correct that the test for inventorship relates to what is actually claimed in the patent, rather than, for example, the commercial embodiment of the invention. However, in focusing on the specific details of the electrical circuit, Smart Parts misconstrues WDP's argument and what Dr. Hensel contributed. For example, Claim 1 recites:
1. An electronically controllable paintball gun comprising:
. . . .
An electrical circuit for controlling one or more of the operations of the paintball gun, wherein said electrical circuit is configured to control an electronic solenoid valve, said solenoid valve being configured to receive a regulated supply of compressed gas from the compressed gas source and to direct the compressed gas through the solenoid valve to a pneumatic piston to initiate the loading operation.
Smart Parts is correct that the details of the electrical circuit are not claimed in Claim 1 or elsewhere. However, WDP's evidence shows that Dr. Hensel's work related to how the electrical circuit could be used to control the solenoid valves and timing of the paintball gun, which is claimed.
Smart Parts argues that there is no evidence that Dr. Hensel conceived of anything, or that any ideas originated with him. I disagree. WDP's evidence not only shows the work and experimentation Dr. Hensel did, but also supports his role in conception. Specifically, the testimony of Cronin and Smith support the conclusion that Dr. Hensel contributed to the abstract thinking and the design of the gun. Again, "[c]onception is the `formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention, as it is hereafter to be applied in practice.'" Hybritech, Inc., 802 F.2d at 1376. WDP's evidence supports the conclusion that Dr. Hensel, at least in collaboration with some of the other inventors, had a definite and permanent idea of a complete and operable paintball gun.
Smart Parts relies almost exclusively on the fact that Billy Gardner allegedly had a mockup gun in the 1993-1994 timeframe. But, Smart Parts offers almost nothing but an allegation regarding the existence of the gun and its details. Again, when questioned, Billy Gardner could provide absolutely no information regarding his purported conception. I also find that Cronin's limited deposition testimony about the mock-up gun does not support Smart Parts' contention that the mock-up gun conclusively shows the Gardners had both conceived of and reduced to practice all of the subject matter of the various claims of the '326 patent.
Smart Parts also argues that Dr. Hensel merely received instructions from the named inventors and therefore cannot be a joint inventor. See Ethicon, 135 F.3d at 1460. However, the evidence shows that Billy and Adam Gardner had almost no interactions with Dr. Hensel and Smart Parts admits that no one else at Smart Parts sent any information to Dr. Hensel. With respect to named inventors Gaston and Smith, as well as Cronin, there appears to have been much more communication. However, the testimony of all three individuals shows that the interactions were much more of a collaborative effort.
In a related argument, Smart Parts contends that Dr. Hensel's contribution is nothing more than the exercise of ordinary skill in the art. However, Dr. Hensel testified that it took him months worth of experimenting with regard to the circuitry to get it to work properly. On this point, WDP relies on excerpts of Smart Parts' oral argument in another case that was before the court regarding the '326 patent. Counsel for Smart Parts stated that "other people have been working on the problem [of an electronically controlled pneumatic piston] for a while and just couldn't figure it out," which "tends to show that it would not be obvious to do what the patentee did." Def. Ex. 12 at 63. This also supports a finding, as required by Fina Oil, 123 F.3d at 1473, that Dr. Hensel's contribution was significant in quality as measured against the dimension of the full invention. Smart Parts has admitted that the patentable invention of the '326 patent is the relationship between the circuitry and the mechanical components.
Although I question the contributions of some of the named inventors, specifically Billy Gardner and Adam Gardner, I do not find that the evidence supports the conclusion that Dr. Hensel was the sole inventor of the '326 patent. I do find for the reasons stated, however, that WDP has established by clear and convincing evidence that Dr. Hensel was a joint inventor of the '326 patent.
II. Smart Parts' Defenses
Smart Parts argues that even if Dr. Hensel were a co-inventor of the '326 patent, as I have found, WDP may not bring an inventorship challenge because Dr. Hensel had an obligation to assign his rights in the patent to Pneu Ventures and/or Key Bank and those rights now belong to Smart Parts, and that in any event, Dr. Hensel and WDP as his successor-in-interest are estopped from bringing an inventorship challenge.
A. Dr. Hensel's Purported Obligation to Assign His Inventions
First, to the extent that Smart Parts' arguments regarding Dr. Hensel's purported duty to assign are based on the contention that Dr. Hensel was an employee of Pneu Ventures, I reject this argument. Dr. Hensel was not compensated for his work and there are no other indicia of an employer-employee relationship.
Second, I also reject Smart Parts' contention that Dr. Hensel's obligations arise from the Pneu Ventures' shareholders Agreement. Smart Parts argues that Professor Hensel became a shareholder pursuant to a shareholder agreement that required him to assign his inventions to Pneu Ventures and/or Key Bank. Whether or not Dr. Hensel reviewed the Agreement given to him by Cronin, he did not sign it, and no one from Pneu Ventures followed up to obtain Dr. Hensel's signature. Smart Parts argues, however, that under New York law, an implied in fact contract existed between Pneu Ventures and Dr. Hensel based on Dr. Hensel's involvement in Pneu Ventures and his notice of the terms of the Agreement. As an extension of this argument, Smart Parts also argues that Dr. Hensel was obligated to assign any rights he may have had in the patents to Pneu Ventures because his actions as an officer, board member and fiduciary led the company and others to believe the company owned the rights, not him.
"State law governs contractual obligations and transfers of property rights, including those relating to patents." Regents of the University of New Mexico v. Knight, 321 F.3d 1111, 1118 (Fed. Cir.), cert. denied., 124 S.Ct. 104 (2003). For purposes of this motion, WDP will accept Smart Parts' contention that New York law applies to this issue.
Smart Parts relies almost exclusively on Great Lakes Press Corp. v. Froom, 695 F. Supp. 1440 (W.D.N.Y. 1987), in support of this argument. I find the facts of Great Lakes to be distinguishable. In Great Lakes, unlike in this case, the president of the company had signed an employment contract with the company and the company also had rules which obligated employees to assign all patents and inventions to the company. I agree with WDP that a case discussed and distinguished in Great Lakes is more similar. See Burden v. Burden Iron Co., 80 N.Y.S. 390 (N.Y. 1903) (finding that president of company was not an employee and had no duty to assign patent rights to the company). I decline to hold that a non-employee, minority shareholder, who did not sign an agreement to assign his patent rights, has an implied obligation to do so. Smart Parts has failed to establish that Dr. Hensel was required to assign his rights to Pneu Ventures or is now required to assign his rights to Smart Parts.
B. Equitable Defenses
Smart Parts argues in essence that Dr. Hensel has simply waited too long to assert a claim of inventorship. In Stark v. Advanced Magnetics, Inc., 29 F.3d 1570, 1573 (Fed. Cir. 1994), the Federal Circuit held that the statute and applicable regulations do not require an omitted inventor to bring a lawsuit to correct inventorship or be forever barred, but the defenses of estoppel and laches are applicable to inventorship challenges. Smart Parts relies on Advanced Cardiovascular Systems v. SciMed Life Systems, Inc., 998 F.2d 1157, 1161 (Fed. Cir. 1993), which held a delay of six years from the time an omitted inventor knew or should have known of his potential claim gives rise to a presumption of laches. Smart Parts contends that Professor Hensel knew as early as 1995 of Smart Parts'/Pneu Ventures' intent to file a patent application on this technology. Smart Parts bases this contention in part on Dr. Hensel's involvement in resolving Pneu Ventures' indebtedness to Key Bank, including the effort to sell the rights to intellectual property.
The evidence does not support the contention that Dr. Hensel knew of the intent to file a patent application on this technology. Dr. Hensel explains that he knew that the Gardners discussed the possibility of seeking patent protection for an electropneumatic paintball gun, but he did not know that the applications were filed, nor did he know what was going to be claimed in the '326 patent. He explains that he did not know at the time what was patentable and what was not. Dr. Hensel testified that although he asked to see a copy of the patent application, he was not given one, and he did not actually review the '326 patent until the summer of 2003. He explains that when he began reviewing the claims of the patent in 2003, he formed the belief that his ideas and his inventions were reflected in the claims. I find Dr. Hensel's explanation to be credible.
WDP focuses specifically on the '326 patent, not any of the parent patents, because the '326 patent is at issue in this litigation. See Stark, 29 F.3d at 1576 (noting that in applying laches the court must look to each patent individually). WDP claims that Dr. Hensel did not even know the patent application had been filed, much less what was claimed in the patent, until after it issued in November 2002. Additionally, WDP correctly notes that the six year presumption discussed inAdvanced Cardiovascular is stated in terms of six years from knowledge of the patent issuance. Even if I were to determine that Dr. Hensel knew or should have known about the patent issuance and the elements of the claims in 2002, a delay of less than one year does not support the application of laches.
Although Smart Parts asserts that this belated attempt to correct inventorship will cause significant harm for Smart Parts and Key Bank, Smart Parts offers little to support this contention, and I do not believe that equity demands the result that Smart Parts seeks. Smart Parts has failed to establish that Dr. Hensel and WDP are estopped from bringing a challenge to the proper inventorship of the '326 patent.
III. Appropriate Remedy
Having determined that Dr. Hensel was a co-inventor of the '326 patent and WDP is not prevented from bringing an inventorship challenge, I will enter summary judgment in favor of WDP and against Smart Parts. WDP also requests that I order the U.S. Patent Office to correct the '326 patent to properly reflect the correct named inventors pursuant to 35 U.S.C. § 256.
Section 256 provides:
Whenever through error a person is named in an issued patent as the inventor, or through error an inventor is not named in an issued patent and such error arose without any deceptive intention on his part, the Director may, on application of all the parties and assignees, with proof of the facts and such other requirements as may be imposed, issue a certificate correcting such error.
The error of omitting inventors or naming persons who are not inventors shall not invalidate the patent in which such error occurred if it can be corrected as provided in this section. The court before which such matter is called in question may order correction of the patent on notice and hearing of all parties concerned and the Director shall issue a certificate accordingly.Id.
The Federal Circuit has described this as a "savings provision." Pannu v. Iolab Corp., 155 F.3d 1344, 1350 (Fed. Cir. 1998). "If a patentee demonstrates that inventorship can be corrected as provided for in section 256, a district court must order correction of the patent, thus saving it from being rendered invalid." Id.
Although I believe this is likely the most appropriate remedy, the parties dedicated almost no briefing to this issue. I will allow WDP leave to submit a brief and Smart Parts a response, each of no more than ten pages in length, regarding the appropriateness of further relief in this action. Once this issue is resolved, I will also enter an order dismissing this action if appropriate. I ask the parties to confer regarding a form of order and judgment.
CONCLUSION
For the foregoing reasons, WDP's Motion for Summary Judgment on Inventorship (#90) is granted and Smart Parts' Cross Motion for Summary Judgment on Inventorship (#96) is denied. Smart Parts' Motion for Summary Judgment of Infringement (#76) and WDP's motions requesting Markman hearings (#72, #74) are denied as moot.