Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-23-01922/USCOURTS-ca13-23-01922-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 

---

United States Court of Appeals 

for the Federal Circuit ______________________

BEARBOX LLC, AUSTIN STORMS,

Plaintiffs-Appellants

v.

LANCIUM LLC, MICHAEL T. MCNAMARA, 

RAYMOND E. CLINE, JR.,

Defendants-Appellees

______________________

2023-1922

______________________

Appeal from the United States District Court for the 

District of Delaware in No. 1:21-cv-00534-GBW-CJB, 

Judge Gregory Brian Williams.

______________________

Decided: January 13, 2025

______________________

BENJAMIN T. HORTON, Marshall, Gerstein & Borun 

LLP, Chicago, IL, argued for plaintiffs-appellants. Also 

represented by JOHN LABBE, CHELSEA MURRAY, RAYMOND 

R. RICORDATI, III. 

 MARK CHRISTOPHER NELSON, Barnes & Thornburg 

LLP, Dallas, TX, argued for defendants-appellees. Also 

represented by ADAM M. KAUFMANN, Chicago, IL; CHAD 

S.C. STOVER, Wilmington, DE. 

 ______________________

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2 BEARBOX LLC v. LANCIUM LLC

Before CHEN, BRYSON, and STOLL, Circuit Judges.

STOLL, Circuit Judge.

Lancium allegedly stole Austin Storms’ thunder and 

patented it. This case centers around a conversation over 

cocktails and dinner at a Bitcoin mining conference, a follow-up email with four attachments, and a subsequent patent. Based on the dinner conversation and email 

attachments, Mr. Storms asserts that Lancium’s patent 

must be corrected to name him as an inventor.

BearBox LLC and Mr. Storms (collectively, “BearBox”)

appeal the United States District Court for the District of 

Delaware’s grant of summary judgment to Lancium LLC, 

Michael T. McNamara, and Dr. Raymond E. Cline, Jr. (collectively, “Lancium”) on BearBox’s Louisiana state law conversion claim, which the district court held to be 

preempted, as pled, by federal patent law. J.A. 63–91.

BearBox also appeals the district court’s exclusion of BearBox’s expert’s supplemental report. BearBox LLC v. Lancium LLC, No. 21-534, 2022 WL 17403466 (D. Del. 

Nov. 23, 2022) (“Supplemental Report Decision”). Last, 

BearBox appeals the district court’s denial of BearBox’s 

claim that Mr. Storms was either a sole or joint inventor of 

U.S. Patent No. 10,608,433 (the “’433 patent”). BearBox 

LLC v. Lancium LLC, No. 21-534, 2023 WL 2367390 

(D. Del. Mar. 6, 2023) (“Inventorship Decision”). We affirm 

the district court’s judgment on each issue.

BACKGROUND

I

The following facts are taken primarily from the district court’s undisputed findings of fact in the Inventorship 

Decision. 

Mr. Storms is the founder and sole employee of BearBox LLC. He has significant experience with Bitcoin mining. For instance, in 2017, Mr. Storms designed and built 

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BEARBOX LLC v. LANCIUM LLC 3

a half-megawatt datacenter for Bitcoin mining in his father’s karate studio. At the time, Mr. Storms’ implementation was unprofitable due to the price of electricity and 

the vast amount of power needed for Bitcoin mining. In 

2018, Mr. Storms founded BearBox LLC to design and develop mobile cryptocurrency datacenters. BearBox LLC is 

a Louisiana entity with a principal place of business in 

Mandeville, Louisiana.

Mr. McNamara and Dr. Cline co-founded Lancium in 

November 2017 with the intention of co-locating flexible 

datacenters, such as Bitcoin miners, at windfarms to exploit the highly variable power output of windfarms. To 

exploit the power output, Lancium would “ramp down” its 

flexible datacenters to allow the windfarm to sell that 

power to the electrical grid when energy prices were high. 

Conversely, when power prices were low, Lancium would 

“ramp up” its flexible datacenters. In other words, Lancium would buy low, sell high. Because Lancium’s co-location was “behind-the-meter,”1 Lancium agreed to cut back

its power usage based on real-time signals indicating the 

price of power so that the windfarm could capture power 

when the price of power was high. Lancium disclosed these 

concepts in International Publication No. WO 2019/139632 

(the “’632 application”) in February 2018, fifteen months 

before Mr. Storms met anyone at Lancium.

The ’632 application, titled “Method and System for 

Dynamic Power Delivery to a Flexible Datacenter Using 

Unutilized Energy Sources,” names both Mr. McNamara 

and Dr. Cline as inventors and has a priority date of January 2018. Figure 6 of the ’632 application depicts the flexible datacenter (200) connected to the windfarm, as well as 

1 “Behind-the-meter” means “that the load is connected directly to a power generation entity, i.e., a wind 

farm, and transmits power to the load before transmitting 

power to the grid.” J.A. 10 ¶ 31.

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4 BEARBOX LLC v. LANCIUM LLC

connections to the local power substation (690) and the 

grid (660).

’632 application, Fig. 6.

Figure 2 of the ’632 application shows individual computing systems (100) of the flexible datacenter organized 

into racks and subsets (240), as well as a datacenter control 

system (220), which may be a computing system configured 

to “dynamically modulate power delivery to one or more 

computing systems 100.” J.A. 8888–91 ¶¶ 30, 33, 38.

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BEARBOX LLC v. LANCIUM LLC 5

’632 application, Fig. 2.

The ’632 application also explains that the flexible datacenter—based on an operational directive or monitored 

conditions, including economic conditions—would control 

its computing systems on a granular level, i.e., on the individual computing system or collections of computing system level, to ensure that its systems consumed less power 

than the windfarm would generate. Thus, the flexible datacenter would monitor information from the windfarm indicating how much power the flexible datacenter could 

consume.

At the time of the ’632 application’s filing, Lancium 

monitored various conditions, including the real-time price 

of power; the price of Bitcoin; and other information enabling Lancium to determine whether it was profitable to 

mine Bitcoin at any given time.

By October 2018, before Mr. Storms met anyone at 

Lancium, Lancium was operating 120 cryptocurrency miners at its facility in Texas with modified off-the-shelf software to control its cryptocurrency miners. Lancium’s 

system monitored some of the information disclosed in the 

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6 BEARBOX LLC v. LANCIUM LLC

’632 application, including power and Bitcoin price, to determine a performance strategy based on whether it was 

profitable to mine Bitcoin. For example, Lancium calculated the breakeven price for different types of cryptocurrency miners and used this calculation to determine when 

to turn the miners on or off.

Beginning in 2019, Lancium began to internally develop its own software to control its cryptocurrency miners.

And by May 1, 2019, Lancium’s proprietary software monitored signals from a windfarm, the Electric Reliability 

Council of Texas, Bitcoin pricing, real-time power pricing, 

hash rate, block height, and the miners’ actual power usage. With that information, Lancium’s proprietary software could determine a target power level at which the 

miners should operate and then send instructions to some 

or all Bitcoin miners to suspend or restart Bitcoin mining.

This proprietary software eventually became known as 

Lancium Smart Response. While Lancium developed the 

software that became Lancium Smart Response, Lancium 

also worked with various companies to design and manufacture portable mining containers for Lancium’s use.

Around the same time, from late-2018 into early 2019, 

Mr. Storms began to design, build, and test the BearBox 

system—a system of relays, power-distribution units, and 

a computer-user interface that allowed a remote user to 

control individual relays so that Bitcoin miners could be 

turned on and off. In November 2018, Mr. Storms met 

someone through Twitter and learned the basics of the energy market. With this knowledge in hand, Mr. Storms

started exploring the idea of a system that mined cryptocurrency when electricity prices were low but sold wind energy to the grid when prices were favorable, i.e., buy low, 

sell high. In April 2019, Mr. Storms’ Twitter contact wrote 

to him that it would be “super cool to write a little Python 

script” that controlled the mining site based on various economic conditions, such as the cost of electricity. Inventorship Decision, at *5, ¶ 32 (citation omitted). Mr. Storms 

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BEARBOX LLC v. LANCIUM LLC 7

got to work and began to write source code for his BearBox 

system. He completed the source code by May 7, 2019, but 

he never provided the source code to Lancium.

Mr. Storms was first introduced to Lancium in May 

2019. On May 3, 2019, Mr. Storms attended the “FCAT 

Mining Summit” in Boston, Massachusetts, to learn more 

about the cryptocurrency industry and to meet potential 

customers for his BearBox containers. Id. at *10, ¶ 63. At

the FCAT Mining Summit, Mr. Storms met 

Mr. McNamara for the first time at a cocktail reception. 

Following the cocktail reception, a small group of people, 

including Mr. Storms, Mr. McNamara, and Lancium’s 

CFO, went to dinner.

The dinner lasted approximately two hours. 

Mr. Storms sat across the table from Mr. McNamara. Over 

dinner the two discussed the BearBox system, and 

Mr. McNamara showed interest in its specifications and 

price. Mr. Storms never showed Mr. McNamara any BearBox documents or source code. Following dinner, 

Mr. Storms and Mr. McNamara exchanged phone numbers

but never met again. Mr. Storms also never met or spoke 

to Dr. Cline or any other Lancium employee.

Shortly after the FCAT Mining Summit dinner, 

Mr. Storms and Mr. McNamara exchanged a few text messages about Mr. Storms’ BearBox system. Mr. McNamara 

expressed interest in Mr. Storms’ BearBox system as a potential alternative to another system that Lancium was exploring. On May 8, 2019, Mr. McNamara sent a text 

message to Mr. Storms asking for his BearBox design specifications. The next day, Mr. Storms sent a single email to 

Mr. McNamara with the subject line “BearBox 20’ product 

details and supporting documents.” Id. at *11, ¶ 73 (citation omitted). The body of Mr. Storms’ email reads:

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8 BEARBOX LLC v. LANCIUM LLC

Hey Michael,

See attached for the 20’ BearBox product details 

and some supporting docs. I’ve also attached some 

recent modeling data from one of the Exelon wind 

sites (based on publicly available marketplace 

data) – I can model for any pricing node you guys 

might be interested in reviewing.

Let me know if you have any questions!

Talk soon,

A

Id. at *11–12, ¶ 73 (citation omitted). Attached to 

Mr. Storms’ email were the following documents: (1) a 

one-page BearBox Product Specification Sheet; (2) an annotated diagram of BearBox’s Automatic Miner Management System; (3) specification sheets on fans and other 

hardware components; and (4) a data file modeling a simulation of the BearBox system.

Mr. Storms and Mr. McNamara did not communicate 

following Mr. Storms’ email. The district court found that 

Mr. McNamara credibly testified that, upon receipt of 

Mr. Storms’ email, he spent no more than three minutes 

reviewing the attachments and that he considered the price 

of the BearBox system to be too high compared to other 

container manufacturers Lancium solicited. Id. at *13,

¶ 84.

On October 28, 2019, Lancium filed United States Provisional Patent Application No. 62/927,119 (the “’119 application”), which ultimately issued as the ’433 patent. The 

’433 patent is titled “Methods and Systems for Adjusting 

Power Consumption Based on a Fixed-Duration Power Option Agreement,” and lists Mr. McNamara and Dr. Cline as 

the inventors. ’433 patent cover.

The ’433 patent relates to a set of computing systems 

that are configured to perform computational operations 

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BEARBOX LLC v. LANCIUM LLC 9

using power from a power grid. See ’433 patent col. 5

ll. 48–50. The ’433 patent also relates to a control system 

that monitors a set of conditions and receives power option 

data that is based, at least in part, on a power option agreement, which specifies minimum power thresholds associated with time intervals. See id. at col. 5 ll. 50–55. The set 

of computing systems may also determine a performance 

strategy for a load based on a combination of the power option data and one or more monitored conditions. See id.

at col. 5 ll. 55–60. The performance strategy may specify a 

power consumption target for the load for each time interval such that each power consumption target is equal to or 

greater than the minimum power threshold associated 

with each time interval. Id. at col. 5 l. 60–col. 6 l. 13. The 

computing systems may provide instructions to perform 

one or more computational operations based on the performance strategy. See id. at col. 6 ll. 14–65. Representative 

claim 1 reads:

1. A system comprising:

[a] a set of computing systems, wherein the set of 

computing systems is configured to perform computational operations using power from a power 

grid;

[b] a control system configured to:

[b1] monitor a set of conditions;

[b2] receive power option data based, at least in 

part, on a power option agreement, wherein the 

power option data specify: (i) a set of minimum 

power thresholds, and (ii) a set of time intervals, 

wherein each minimum power threshold in the set 

of minimum power thresholds is associated with a 

time interval in the set of time intervals;

[b3] responsive to receiving the power option data, 

determine a performance strategy for the set of 

computing systems based on a combination of at 

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10 BEARBOX LLC v. LANCIUM LLC

least a portion of the power option data and at least 

one condition in the set of conditions, wherein the 

performance strategy comprises a power consumption target for the set of computing systems for 

each time interval in the set of time intervals, 

wherein each power consumption target is equal to 

or greater than the minimum power threshold associated with each time interval; and

[b4] provide instructions to the set of computing 

systems to perform one or more computational operations based on the performance strategy.

Id. at col. 59 ll. 2–28.

II

At some point, BearBox caught wind of the ’433 patent 

and filed this lawsuit against Lancium asserting, inter 

alia, claims of sole or joint inventorship of the ’433 patent 

and conversion under Louisiana state law.

Lancium moved for summary judgment arguing that 

BearBox’s Louisiana state law conversion claim fails as a 

matter of law because federal patent law preempts it as 

pled. The district court agreed and dismissed the conversion claim as preempted by federal patent law. In reaching 

its decision, the district court determined that “it is clear 

that BearBox’s conversion claim is ‘patent-like’ in nature 

and also turns on a determination of inventorship regarding the subject matter of the ’433 patent.” J.A. 86.

Lancium also moved for summary judgment as to BearBox’s sole or joint inventorship claims. The district court 

denied summary judgment as to BearBox’s sole inventorship claim because the district court could not “say that no 

reasonable fact finder could find that there is clear and convincing evidence establishing Storms’ right to be named” 

as an inventor on the ’433 patent. J.A. 73. And “[b]ecause 

there are genuine issues of material fact surrounding the 

extent of [Messrs.] Storms, McNamara, and [Dr.] Cline’s 

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BEARBOX LLC v. LANCIUM LLC 11

collaboration related to the subject matter claimed in the 

’433 patent,” the district court denied Lancium’s motion as 

to BearBox’s joint inventorship claim. J.A. 79. As such, 

the inventorship claims proceeded to a bench trial.

In the interim, the district court struck Dr. Stanley 

McClellan’s entire supplemental technical expert report. 

Supplemental Report Decision, at *1. The district court determined that BearBox had acted in bad faith when it 

served Dr. McClellan’s supplemental report on November 11, 2022, nearly three weeks before the start of a threeday bench trial and approximately five months after the 

close of expert discovery, without seeking leave of court or 

Lancium’s consent, as required by the scheduling order.

Following the three-day bench trial, the district court 

issued its findings of fact and conclusions of law. Inventorship Decision. The district court determined that Lancium’s witnesses had credibly testified about Lancium’s 

software, its research and development activities prior to 

the FCAT Mining Summit, the conversation with 

Mr. Storms at the FCAT Mining Summit dinner, and their 

handling of Mr. Storms’ email. With respect to each claim 

of the ’433 patent, the district court determined that BearBox failed to prove by clear and convincing evidence that 

Mr. Storms either conceived of, or communicated prior to 

Lancium’s independent conception, the subject matter of 

any claim of the ’433 patent. Therefore, the district court 

concluded that BearBox had not met its burden by clear 

and convincing evidence to establish Mr. Storms’ sole or 

joint inventorship claims. The district court then entered 

final judgment.

BearBox appeals. We have jurisdiction under 28 U.S.C

§ 1295(a)(1).

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12 BEARBOX LLC v. LANCIUM LLC

DISCUSSION

I

We begin our analysis with whether federal patent law 

preempts BearBox’s Louisiana state law conversion claim, 

as pled. The district court granted summary judgment dismissing BearBox’s conversion claim based on conflict

preemption. We review a district court’s grant of summary 

judgment under the law of the regional circuit, here the 

Third Circuit. Acceleration Bay LLC v. 2K Sports, Inc., 

15 F.4th 1069, 1075 (Fed. Cir. 2021). The Third Circuit reviews the grant of summary judgment de novo. Id. (citing 

Azur v. Chase Bank, USA, Nat’l Ass’n, 601 F.3d 212, 216 

(3d Cir. 2010)). Federal Circuit law governs whether federal patent law preempts a state law claim, a question we 

review de novo. Ultra-Precision Mfg., Ltd. v. Ford Motor 

Co., 411 F.3d 1369, 1376 (Fed. Cir. 2005).

“Under the Supremacy Clause, state law that conflicts 

with federal law is without effect.” Id. at 1377 (citing U.S. 

Const. art. VI, cl. 2; Bonito Boats, Inc. v. Thunder Craft 

Boats, Inc., 489 U.S. 141, 168 (1989); Hunter Douglas, Inc. 

v. Harmonic Design, Inc., 153 F.3d 1318, 1331 (Fed. Cir. 

1998), overruled in part, Midwest Indus., Inc. v. Karavan 

Trailers, Inc., 175 F.3d 1356, 1361 (Fed. Cir. 1999)). There 

are three types of preemption: explicit, field, or conflict 

preemption. Hunter Douglas, 153 F.3d at 1332. This case 

concerns only conflict preemption. “Conflict preemption occurs when state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives 

of Congress.” Ultra-Precision, 411 F.3d at 1377 (internal 

quotation marks and citation omitted).

While there are several congressional objectives, “public disclosure and use . . . is the centerpiece of federal patent policy.” Bonito Boats, 489 U.S. at 157. Indeed, “the 

efficient operation of the federal patent system depends 

upon substantially free trade in publicly known, unpatented design and utilitarian conceptions.” Id. at 156. For 

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BEARBOX LLC v. LANCIUM LLC 13

this reason, “[s]tates may not offer patent-like protection to 

intellectual creations which would otherwise remain unprotected as a matter of federal law.” Id.; Ultra-Precision, 

411 F.3d at 1377–78 (“Federal law preempts state law that 

offers ‘patent-like protection’ to discoveries unprotected 

under federal patent law.” (citation omitted)). “[A] state 

law that substantially interferes with the enjoyment of an 

unpatented utilitarian or design conception which has been 

freely disclosed by its author to the public” is preempted by 

federal patent law because it “contravenes the ultimate 

goal of public disclosure and use.” Bonito Boats, 489 U.S. 

at 156–57.

Under Louisiana law, “[a] conversion is an act in derogation of the plaintiff’s possessory rights and any wrongful 

exercise or assumption of authority over another’s goods, 

depriving him of the possession, permanently or for an indefinite time.” Bihm v. Deca Sys., Inc., 226 So. 3d 466, 478 

(La. App. 1 Cir. 2017). Of course, the Louisiana conversion 

cause of action is not ipso facto preempted by the federal 

patent laws. It covers a broad range of conduct that does 

not necessarily implicate federal patent law. Indeed, BearBox contends that its state-law claim is not based on acts 

of patent infringement or on a determination of patent inventorship but is instead based on acts of converting documents and information, for which it seeks compensation. 

Appellants’ Br. 34–35. This contention, however, does not

square with how BearBox pled the conversion claim, as explained below. And when determining whether federal patent law preempts a state law cause of action, we do not

mechanically compare the required elements of the state 

law claim to the objectives embodied by federal patent law. 

Rather, we determine whether federal patent law 

preempts the state law claim because the state law claim

as pled “stands as an obstacle to the accomplishment and 

execution of the full purposes and objectives of Congress.” 

Ultra-Precision, 411 F.3d at 1378 (evaluating whether an 

unjust enrichment claim was preempted as pled); Univ. of 

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14 BEARBOX LLC v. LANCIUM LLC

Colo. Found., Inc. v. Am. Cyanamid Co., 196 F.3d 1366, 

1371 (Fed. Cir. 1999) (same for unjust enrichment and 

fraudulent nondisclosure claims). Therefore, the narrow 

question this case presents is whether the specific conversion claim pled by BearBox—seeking damages for Lancium’s “improper and unauthorized use” of BearBox’s 

unpatented technology, including system designs, documents, data, and know-how, J.A. 1650 ¶¶ 87, 90—aims to 

frustrate federal patent law policies and “offer patent-like 

protection to intellectual creations which would otherwise 

remain unprotected as a matter of federal law.” Bonito 

Boats, 489 U.S. at 156. If so, BearBox’s claim would be 

preempted.

Here, we agree with the district court that BearBox’s 

conversion claim is preempted because the conversion 

claim, as pled, is essentially an inventorship cause of action 

and patent infringement cause of action, and thus seeks 

“patent-like protection” for ideas that are unprotected under federal law. Bonito Boats, 489 U.S. at 156. A review of 

BearBox’s complaint is instructive.

As pled, BearBox’s conversion claim explicitly seeks to 

recoup monetary damages from Lancium for its use, sale, 

and monetization of technology that BearBox purports to 

have invented and thus now owns. In Count V (conversion 

by Lancium, Mr. McNamara, and Dr. Cline), BearBox alleges “Austin Storms, in his capacity as founder and President of BearBox, conceived, developed, and reduced to 

practice BearBox’s technology. Plaintiffs own BearBox’s 

technology, including system designs, documents, data, 

and know-how.” J.A. 1649 ¶ 85 (emphases added). The 

rest of the conversion claim reads like a patent infringement cause of action as follows:

Without [BearBox’s] consent, [Lancium] intentionally and willfully assumed dominion and control 

over BearBox’s technology, including system designs, documents, data, and know-how, and 

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BEARBOX LLC v. LANCIUM LLC 15

improperly used it to modify their Smart ResponseTM software, and corresponding system designs, to function as reflected in BearBox’s system 

designs, documents, data, and know-how, and subsequently used, sold, licensed, and procured investments related to, and otherwise monetized, that 

software for substantial profit.

J.A. 1650 ¶ 87 (emphases added). BearBox also alleges 

“[Lancium’s] actions constitute an improper and unauthorized use of [BearBox’s] property.” J.A. 1650 ¶ 89 (emphasis 

added). And BearBox asserts, “[a]s such, [BearBox LLC 

and Mr. Storms] are entitled to damages resulting from 

[Lancium’s] improper and unauthorized use.” J.A. 1650 

¶ 90; see also J.A. 1653 ¶ G.

Here, the conversion claim is replete with “patent-like” 

language typically invoked when a party asserts inventorship or infringement of a patent, including that Mr. Storms 

“conceived, developed, and reduced to practice” certain 

technology and that “Lancium improperly used” that technology. J.A. 1649 ¶ 85; J.A. 1650 ¶ 87; see Blue Gentian,

LLC v. Tristar Prod., Inc., 70 F.4th 1351, 1358 (Fed. Cir. 

2023) (“An alleged joint inventor must show that he contributed significantly to the conception—the definite and 

permanent idea of the invention—or reduction to practice

of at least one claim”) (emphases added) (citation omitted); 

35 U.S.C. § 271(a) (“[W]hoever without authority makes, 

uses, offers to sell, or sells any patented invention, within 

the United States . . . during the term of the patent therefor, infringes the patent.”). The damages that BearBox 

seeks to recoup—“including damages, consequential damages, disgorgement of [Lancium’s] ill-gotten profits . . . 

and/or all other appropriate financial relief,” J.A. 1653 

¶ G—are also “patent-like” in that they seek monetary 

damages adequate to compensate for “[Lancium’s] improper and unauthorized use.” J.A. 1650 ¶ 90. The district 

court expressly found that BearBox’s damages expert further supported that BearBox seeks patent-like damages 

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16 BEARBOX LLC v. LANCIUM LLC

because he “reaffirm[ed] that BearBox seeks monetary 

damages in, effectively, a repackaged form of a royalty payment, and reassert[ed] BearBox’s theme that monetary 

damages are necessary to compensate or recognize BearBox for use of BearBox’s converted technology.” J.A. 88–

89. BearBox does not challenge that finding on appeal. 

Tellingly, the patent statute provides that the patentee is 

entitled to recover “damages adequate to compensate for 

the infringement, but in no event less than a reasonable 

royalty for the use made of the invention by the infringer.” 

35 U.S.C. § 284. In contrast, under Louisiana law, “[t]he

measure of damages for wrongful conversion is the return 

of the property, or if it cannot be returned, the value of the 

property at the time of conversion.” Capers v. NorthPro 

Prop. Mgmt., LLC, 321 So. 3d 502, 514 (La. App. 2 Cir. 

2021). But BearBox does not just demand the return of its

allegedly converted property or its value at the time of the 

alleged conversion, BearBox persistently pursues more—

monetary damages akin to those awarded under federal 

patent law.

Moreover, “federal patent law generally precludes a 

plaintiff from recovering a [damages] award premised on 

defendant’s making, using, offering to sell, or selling an unpatented discovery after plaintiff makes the discovery 

available to the public.” Ultra-Precision, 411 F.3d at 1380;

cf. Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 492

(1974) (concluding “patent law does not pre-empt trade secret law”). Here, BearBox’s technology is not patented, was 

freely shared with others,2 and is otherwise in the public 

domain. Were we to allow the conversion claim to move 

2 Cocktail hour, dinner conversation, and 

Mr. Storms’ email aside, the district court also found that 

Mr. Storms separately shared portions of his source code 

with another third-party individual. See Inventorship Decision, at *13 ¶ 83.

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forward as pled, then BearBox, like a patentee, would potentially recover lost profits or a reasonable royalty from 

its competitor, Lancium, for Lancium’s alleged use of BearBox’s technical information that “otherwise remain[s] unprotected as a matter of federal law.” Bonito Boats, 

489 U.S. at 156. Such a cause of action, as pled here, is 

clearly preempted.

For all these reasons, we affirm the district court’s determination that federal patent law preempts BearBox’s 

state law conversion claim.

II

Now we address the district court’s decision to strike 

Dr. McClellan’s supplemental report in toto. We review evidentiary rulings not unique to patent law under the law of 

the regional circuit. TecSec, Inc. v. Adobe Inc., 978 F.3d 

1278, 1285 (Fed. Cir. 2020). Here, the Third Circuit reviews a district court’s evidentiary rulings for an abuse of 

discretion. Wi-LAN Inc. v. Sharp Elecs. Corp., 992 F.3d 

1366, 1370 (Fed. Cir. 2021) (citing Acumed LLC v. Advanced Surgical Servs., Inc., 561 F.3d 199, 211 (3d Cir. 

2009)); ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 268 

(3d Cir. 2012).

BearBox contends that the district court abused its discretion because (1) Dr. McClellan’s untimely supplemental 

report was justified; (2) Dr. McClellan’s supplemental report did not offer new opinions; and (3) the district court 

incorrectly weighed the Pennypack factors in favor of excluding the supplemental report. None of BearBox’s contentions persuades us that the district court abused its 

discretion.

A

BearBox first argues that its filing of Dr. McClellan’s 

untimely supplemental report was justified because Lancium raised a new claim construction dispute (triggering 

the need for a supplemental report) for the first time after 

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18 BEARBOX LLC v. LANCIUM LLC

the close of discovery. Appellants’ Br. 38–40. Therefore, in 

BearBox’s view, the district court’s “extreme sanction”—

striking an expert’s supplemental report—was “contrary to 

Federal Circuit and Third Circuit law.” Appellants’ Br. 38. 

BearBox’s argument, however, rests on a mistaken view of 

the record.

Lancium did not raise the claim construction dispute 

for the first time after the close of discovery. To be sure, 

the district court held a Markman hearing and adopted 

Lancium’s proposed constructions of the disputed terms after the close of discovery. See J.A. 6005–20. Critically, 

however, these adopted constructions were not new to 

BearBox or Dr. McClellan. The district court determined 

that “both BearBox and Dr. McClellan were equipped with 

Lancium’s proposed constructions [of the disputed terms] 

six months prior to supplementing Dr. McClellan’s reports.” Supplemental Report Decision, at *2. And where, 

as here, “claim construction remains an open issue at the 

time the parties serve expert reports,” BearBox had “an obligation” under the district court’s own precedent “to prepare for the fact that the court may adopt [the other party’s 

claim] construction.” Id. (quoting St. Clair Intell. Prop. 

Consultants, Inc. v. Matshushita Elec. Indus. Co., Ltd., 

No. 04-1436, 2012 WL 1015993, at *5 (D. Del. Mar. 26, 

2012)). In other words, under this precedent, BearBox 

should have addressed Lancium’s proposed constructions

in its expert reports. Id. (citing St. Clair, 2012 WL 

1015993, at *5; Union Carbide Chems. & Plastics Tech. 

Corp. v. Shell Oil Co., 270 F. Supp. 2d 519, 524 (D. Del. 

2003)). BearBox failed to do so. In truth, BearBox’s position is even worse because, in his reply report, Dr. McClellan acknowledged and generally disagreed with Lancium’s 

proposed constructions yet failed to go one step further and 

apply and analyze Lancium’s proposed constructions until 

his untimely supplemental report. Id. On this record, the 

district court’s rejection of BearBox’s proffered justification

for its delay does not constitute an abuse of discretion.

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BEARBOX LLC v. LANCIUM LLC 19

B

Next, BearBox argues that the district court erred in 

concluding that Dr. McClellan’s supplemental report offered new opinions. See Appellants’ Br. 40–44. In our 

view, however, the district court carefully compared 

Dr. McClellan’s opening and reply reports with the supplemental report. We agree with the district court that the 

“opinions in [Dr. McClellan’s] Supplemental Report are beyond mere ‘elaboration’ or ‘clarification’” for at least the 

reasons the district court identifies. Supplemental Report 

Decision, at *2. For example, the district court correctly 

determined that Dr. McClellan’s supplemental report “offer[ed] analysis of how Austin Storms allegedly conceived 

of a system where the power entity held the option,” 

whereas Dr. McClellan previously opined “that the load, 

not the power entity, held the option in a power option 

agreement.” Id. at *1 (citing J.A. 6105–06 ¶¶ 25–26;

J.A. 6149 (157:1–18)).

On appeal, BearBox asserts:

[T]he district court erred in concluding that 

[Dr.] McClellan “previously opined that load was 

not required to use the ‘minimum power threshold,’” [J.A. 6131 ](84:18–85:1) and that “neither 

[his] Opening Report nor his Reply report . . . explain how BearBox’s system operated by maintaining ‘a minimum amount of power a load must use 

during an associated time interval.’”

Appellants’ Br. 40 (fourth alteration in original). This assertion fails.

BearBox essentially argues that Dr. McClellan previously opined that the load was required to use the minimum power threshold. In support, it identifies portions of 

Dr. McClellan’s original report, including specific source 

code modules, such as the arb_main_AEC.py module, as 

evidence of Dr. McClellan’s understanding that 

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20 BEARBOX LLC v. LANCIUM LLC

Mr. Storms’ source code simulation included a function 

that maintained the energy used by the load. Appellants’ 

Br. 41 (citing J.A. 2741–42 ¶¶ 66–67). While BearBox describes this energy used by the load in its appeal brief as 

“required kw_load usage,” nothing in Dr. McClellan’s underlying reports specifies that the load is required to use 

this minimum amount of power. As such, we see no error 

in the district court’s conclusion that “neither Dr. McClellan’s Opening Report nor his Reply Report explain how 

BearBox’s system operated by maintaining ‘a minimum 

amount of power a load must use during an associated time 

interval’ (i.e., ‘minimum power threshold’).” Supplemental 

Report Decision, at *2 (emphasis added). Further, as the 

district court also noted, Dr. McClellan testified that a load 

was not required to use the minimum power threshold. Id.

(citing J.A. 6131 (84:18–85:1)). The cited portions of 

Dr. McClellan’s expert reports that BearBox now relies on 

do not overcome or otherwise rectify Dr. McClellan’s 

clearly contradictory testimony. As such, we see no error 

in the district court’s conclusion that the supplemental report offered new opinions.

C

Finally, we turn to BearBox’s contention that even if it 

offered new opinions, the supplemental report should not 

have been stricken because striking a supplemental report 

is an “‘extreme sanction,’ not normally warranted absent a 

showing of willful deception or flagrant disregard of court 

orders.” Appellants’ Br. 44–45 (citing In re Paoli R.R. Yard 

PCB Litig., 35 F.3d 717, 792 (3d Cir. 1994)). In considering 

whether the district court abused its discretion in excluding evidence, the Third Circuit considers the Pennypack 

factors:

(1) “the prejudice or surprise in fact of the party 

against whom the excluded witnesses would have 

testified” or the excluded evidence would have been 

offered; (2) “the ability of that party to cure the 

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BEARBOX LLC v. LANCIUM LLC 21

prejudice”; (3) the extent to which allowing such 

witnesses or evidence would “disrupt the orderly 

and efficient trial of the case or of other cases in the 

court”; (4) any “bad faith or willfulness in failing to 

comply with the court’s order”; and (5) the importance of the excluded evidence.

ZF Meritor, 696 F.3d at 298 (quoting Meyers v. Pennypack 

Woods Home Ownership Assn., 559 F.2d 894, 904–05 

(3d Cir. 1977)). Here, the district court made a finding of 

bad faith under factor (4) and found that the weight of factors (1), (2), (3), and (5) favor excluding Dr. McClellan’s 

supplemental report. Supplemental Report Decision,

at *1–3. We see no error in the court’s analysis.

First, with respect to factors (1) and (2), as discussed 

above, the supplemental report “offer[ed] new legal theories and opinions related to BearBox’s alleged conception 

and communication of the subject matter of the ’433 patent.” Id. at *1. Lancium did not receive notice of these 

new legal theories and opinions until three weeks before 

trial, nearly five months after the close of expert discovery. 

The district court correctly concluded the untimely new 

theories “would ultimately prejudice Lancium, especially 

at th[e] late juncture of the case.” Id. at *2. Still, the district court considered whether Lancium could be cured of 

the prejudice caused by a late supplemental report. But 

the court correctly found, because of “the strained schedule 

and quickly approaching trial,” that “Lancium ha[d] no 

meaningful opportunity to conduct rebuttal discovery, prepare a supplemental rebuttal report, or prepare for an additional deposition.” Id. at *3. BearBox also offered to 

have Lancium’s expert, Dr. Mark Ehsani, provide a supplemental report to address Dr. McClellan’s supplemental report. We agree with the district court that while this 

approach “may cure some prejudice,” it “would undoubtedly disrupt the trial process.” Id. With the strained 

schedule, there would still be no meaningful opportunity to 

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22 BEARBOX LLC v. LANCIUM LLC

“to conduct rebuttal discovery . . . or prepare for an additional deposition.” Id.

As for factor (3), the district court concluded that “[t]he 

risk of prejudice suffered by Lancium is uncurable in light 

of the strained schedule and quickly approaching trial.” Id. 

Here, BearBox presents no contrary persuasive evidence

and does not demonstrate that the district court’s determination was erroneous.

With respect to factor (4), the district court concluded

that “BearBox’s disregard of the express terms of the 

Court’s Scheduling Order indicate[d] bad faith which 

weighs in favor of exclusion.” Id. at *2. The scheduling 

order indicated that after the close of discovery, “[n]o other 

expert reports will be permitted without either the consent 

of all parties or leave of the Court.” Id. Thus, BearBox was 

required either to seek leave of the court or to obtain consent from Lancium to serve the supplemental report. But

BearBox sought “neither.” Id. As such, we cannot say the 

district court’s determination of bad faith was erroneous. 

Where a party fails to comply with the court’s scheduling 

order, the district court has the authority to sanction a 

party by “prohibiting the disobedient party from . . . introducing designated matters in evidence,” i.e., otherwise admissible testimony. Fed. R. Civ. P. 37(b). On this record, 

the district court did not err in concluding that this factor 

weighs in favor of exclusion.

Finally, as for factor (5), the district court assessed the 

importance of the supplemental report in two different

ways. First, the district court’s careful comparison of 

Dr. McClellan’s opening report and reply report with the 

supplemental report demonstrates to us that it appreciated 

the importance of the supplemental report. As noted 

above, the district court assessed whether the opinions in 

the supplemental report went beyond mere “elaboration or 

clarification” and concluded that they did. Supplemental 

Report Decision, at *2 (internal quotation marks omitted).

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BEARBOX LLC v. LANCIUM LLC 23

Second, the district court’s alternative assessment of 

the Pennypack factors—which assumes that the supplemental report did not contain new opinions—supports the 

court’s weighing of factor (5). The district court explained 

that “[e]ven assuming that BearBox was correct that 

Dr. McClellan’s Supplemental Report does not offer new 

opinions, the Court cannot reasonably conclude that exclusion of that report—which would necessarily reiterate the 

same opinions proffered in Dr. McClellan’s Opening Report 

and Reply Report—would harm BearBox.” Id. n.1. Although the district court addressed this counterfactual situation for the sake of argument, we understand it to be 

another example of the district court assessing the importance of the evidence.

Thus, viewed in the best light for BearBox, we understand the district court to doubt the importance of the supplemental report.

At bottom, “the District Court has considerable discretion in matters regarding expert discovery and case management.” ZF Meritor, 696 F.3d at 297. The district court 

here did not abuse its discretion in finding BearBox’s supplemental report untimely, nor did the district court abuse 

its discretion in concluding that the Pennypack factors supported its decision.

III

Last, we address the district court’s conclusion that 

BearBox had not met its burden to establish that 

Mr. Storms was either a sole or joint inventor of the 

’433 patent. At the outset, we note that BearBox does not 

challenge any of the district court’s underlying factfindings 

or credibility determinations as clearly erroneous. Instead, 

BearBox contends that the district court erred in three

other respects: (1) in excluding portions of Mr. Storms’ testimony as hearsay; (2) in analyzing individual claim elements (rather than a combination of elements) by 

comparing them, element-by-element, to Mr. Storms’

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24 BEARBOX LLC v. LANCIUM LLC

corroborating documents; and (3) in applying the rule of 

reason by evaluating corroborating documents in isolation. 

First, we address the district court’s factfindings and legal 

conclusions; then we turn to, and ultimately reject, BearBox’s arguments.

“Under 35 U.S.C. § 256, a district court may order correction of inventorship when it determines that an inventor 

has been erroneously omitted from a patent.” Blue Gentian, 70 F.4th at 1357. “All inventors, even those who contribute to only one claim or one aspect of one claim of a 

patent, must be listed on that patent.” Vapor Point LLC 

v. Moorhead, 832 F.3d 1343, 1348–49 (Fed. Cir. 2016). 

“Patent issuance creates a presumption that the named inventors are the true and only inventors.” Caterpillar Inc. 

v. Sturman Indus., Inc., 387 F.3d 1358, 1377 (Fed. Cir. 

2004). For this reason, the party seeking correction of inventorship must show by clear and convincing evidence 

that a joint inventor should have been listed. Eli Lilly & 

Co. v. Aradigm Corp., 376 F.3d 1352, 1358 (Fed. Cir. 2004).

An alleged joint inventor’s testimony alone is insufficient to establish inventorship by clear and convincing evidence. Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456, 

1461 (Fed. Cir. 1998). “Thus, an alleged co-inventor must 

supply evidence to corroborate his testimony.” Id. “Corroborating evidence may take many forms,” including “contemporaneous documents” or physical evidence, 

“[c]ircumstantial evidence about the inventive process,” 

and “oral testimony of someone other than the alleged inventor.” Id.; see also Sandt Tech., Ltd. v. Resco Metal & 

Plastics Corp., 264 F.3d 1344, 1350–51 (Fed. Cir. 2001). 

“To determine whether testimony has been sufficiently corroborated, a ‘rule of reason’ test is applied where ‘all pertinent evidence is examined in order to determine whether 

the inventor’s story is credible.’” Blue Gentian, 70 F.4th 

at 1357 (quoting Sandt Tech., 264 F.3d at 1350). “A court’s 

conclusion about corroboration under this ‘rule of reason’ 

analysis is a factfinding, which we review for clear error.” 

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BEARBOX LLC v. LANCIUM LLC 25

Id. (citing Fleming v. Escort Inc., 774 F.3d 1371, 1377 

(Fed. Cir. 2014)).

“An alleged joint inventor must show that he contributed significantly to the conception—the definite and permanent idea of the invention—or reduction to practice of at 

least one claim.” Id. at 1358 (citing Dana-Farber Cancer 

Inst., Inc. v. Ono Pharm. Co., 964 F.3d 1365, 1371 

(Fed. Cir. 2020)). These contributions must also arise from 

“some element of joint behavior, such as collaboration or 

working under common direction” with the other inventor(s). Kimberly-Clark Corp. v. Procter & Gamble Distrib. 

Co., Inc., 973 F.2d 911, 917 (Fed. Cir. 1992). This “conception inquiry is fact-intensive.” In re Jolley, 308 F.3d 1317, 

1323 (Fed. Cir. 2002). But “[c]onception is a legal conclusion premised on various underlying facts.” Invitrogen 

Corp. v. Clontech Lab’ys, Inc., 429 F.3d 1052, 1063 

(Fed. Cir. 2005).

Similarly, inventorship is ultimately a question of law 

based on underlying facts. In re VerHoef, 888 F.3d 1362, 

1365 (Fed. Cir. 2018). As such, we review the district 

court’s overall inventorship determination de novo, and the 

court’s underlying factfindings for clear error. Dana-Farber, 964 F.3d at 1370.

Here, following a three-day bench trial on the issue of 

correction of inventorship, the district court thoughtfully 

and carefully made findings of fact and conclusions of law 

and ultimately concluded that the ’433 patent does not 

need to be corrected to list Mr. Storms as either a sole inventor or joint inventor. Inventorship Decision at *28. 

With respect to each claim of the ’433 patent, the district 

court determined that BearBox failed to prove by clear and 

convincing evidence that Mr. Storms either conceived of, or 

communicated prior to Lancium’s independent conception, 

the subject matter of any claim of the ’433 patent. The only 

information that Mr. Storms shared with Lancium is a single May 2019 email with four attachments. Id. at *11–12. 

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26 BEARBOX LLC v. LANCIUM LLC

The four attachments are: (1) a one-page BearBox Product 

Specification Sheet (“BearBox Spec Sheet”); (2) an annotated diagram of BearBox’s Automatic Miner Management 

System (“Storms’ Diagram”); (3) specification sheets on 

fans and other hardware components; and (4) a data file 

modeling a simulation of the BearBox system (“Storms’ 

Data File”). Id. at *12. Mr. Storms and Mr. McNamara did 

not communicate following Storms’ email.

With respect to the third attachment, Mr. Storms admitted that nothing from the specification sheets on fans 

and other hardware components related to the subject matter of the ’433 patent. Id. at *12, ¶ 74. As to the other attachments—the BearBox Product Spec Sheet, Storms’ 

diagram, and Storms’ Data File—the district court determined either that these documents did not establish that 

Mr. Storms conceived of the claimed invention or that 

Mr. Storms could not establish that he communicated any 

information prior to Lancium’s independent conception of 

the claimed subject matter. Id. at *14–28. “As disclosed in 

the ’632 [a]pplication filed in January 2018, [Lancium] had 

conceived of a system where a set of computer systems issued instructions to perform computational operations 

based on a performance strategy derived from monitored 

conditions . . . and reduced the system to practice by October 2018.” Id. at *18. We see no error in the district court’s 

analysis. And again, as noted above, BearBox presents no 

challenge to the district court’s factfindings and credibility 

determinations. Nor does BearBox persuade us that the 

district court’s ultimate inventorship determination was 

erroneous.

BearBox first contends that the district court improperly excluded as hearsay Mr. Storms’ testimony about what 

he told Mr. McNamara at a cocktail hour and dinner because it “was not offered for the truth of the matter asserted, but only for the sake of proving notice and what 

information Storms communicated to Lancium.” Appellants’ Br. 51. There is merit to BearBox’s argument that 

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BEARBOX LLC v. LANCIUM LLC 27

Mr. Storms’ testimony was offered for a non-hearsay purpose. As Lancium points out, however, review of the trial 

transcript reveals a larger problem for BearBox’s challenge

on appeal.

It is a fundamental principle of trial practice that, “to 

preserve for appellate review a claim of error premised on 

the exclusion of evidence, the aggrieved party must ensure 

that the record sufficiently reflects the content of the proposed evidence.” Williams v. Drake, 146 F.3d 44, 49 

(1st Cir. 1998); United States v. DeMuro, 677 F.3d 550, 567 

(3d Cir. 2012); McGinley v. Franklin Sports, Inc., 262 F.3d 

1339, 1358 (Fed. Cir. 2001); Fed. R. Evid. 103(a)(2). Here, 

following the district court’s ruling from the bench that the 

testimony was hearsay, counsel for BearBox made no offer 

of proof as to what Mr. Storms’ response would have been 

if he had been permitted to answer the questions. See

J.A. 8025–26 (Trial Tr. 79:3–82:12). That failure is fatal. 

Only on appeal after extensive questioning at argument 

did BearBox’s counsel first start to identify what 

Mr. Storms’ testimony would have included about what he 

told Mr. McNamara at dinner. See Oral Arg. at 8:43–

10:30, https://oralarguments.cafc.uscourts.gov/default

.aspx?fl=23-1922_11072024.mp3. BearBox’s counsel 

raised none of these points before the district court and 

thus we are left to wonder how or why the inclusion of 

Mr. Storms’ testimony would alter the district court’s conclusion on inventorship. Accordingly, we cannot determine 

that there was prejudicial error in the trial court’s exclusion of Mr. Storms’ testimony as hearsay.

Next, BearBox contends that “the district court failed 

to consider claim elements in combination, instead focusing 

on individual elements when evaluating whether Storms 

conceived of the claimed inventions.” Appellants’ Br. 54. 

Although BearBox cites many cases to support its position, 

none is on point because they concern other invalidity doctrines, such as inequitable conduct and public use. The 

only case that addresses inventorship, Blue Gentian, 

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28 BEARBOX LLC v. LANCIUM LLC

criticizes a party’s argument for its myopic approach (parsing claim elements into sub-elements) to prove that certain 

claim limitations existed in the prior art with respect to the 

case at hand; it did not adopt a general criticism of limitation-by-limitation analysis. See 70 F.4th at 1362. Here, 

the district court analyzed the entirety of the claims. Inventorship Decision, at *14–25. And in fact, the court’s 

analysis mirrors the analysis BearBox presented in its

post-trial brief. See J.A. 7107–20. Further, given that 

BearBox must demonstrate that Mr. Storms contributed 

significantly to the conception or reduction to practice of at 

least one claim, Blue Gentian, 70 F.4th at 1358 (citing 

Dana-Farber, 964 F.3d at 1371), we see no error with the 

district court’s limitation-by-limitation approach in this 

case.

Last, BearBox contends that the district court erred because it “referenced the Rule of Reason” but “did not address whether, under the Rule of Reason, the totality of the 

evidence, ‘including circumstantial evidence support[s] the 

credibility of the inventors’ story.’” Appellants’ Br. 59

(quoting E.I. DuPont De Nemours & Co. v. Unifrax I LLC, 

921 F.3d 1060, 1077 (Fed. Cir. 2019)). Specifically, BearBox takes issue with two district court fact findings that it 

understands to be inconsistent and thus improperly evaluated. First, the district court found that “[t]hrough late2018 into early 2019, Storms began to design, build, and 

test a system of relays, power distribution units (‘PDUs’), 

and a computer user interface that allowed a remote user 

to control individual relays so that miners could be turned 

on and off.” Inventorship Decision, at *4 ¶ 29 (emphasis 

added) (citing testimony J.A. 8017–18 (Trial Tr. 46:02–

52:13) and photos J.A. 9412–25). In BearBox’s view, this 

first finding conflicts with the district court’s later finding 

that “[BearBox] did not otherwise proffer evidence establishing that the BearBox System could individually control 

the system of 272 miners.” Id. at *18 ¶ 113.

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BEARBOX LLC v. LANCIUM LLC 29

But BearBox takes the court’s later language out of 

context. The district court found, based on a credibility determination regarding competing expert testimony, that 

Mr. Storms’ “Source Code ‘only ever instructs . . . all the relays of the PDUs to turn on or off.’” Id. (citation omitted). 

The court also found, which BearBox does not mention, 

that “even if Storms’ Email did meet element [b4][3] of 

claim 1 of the ’433 patent, the Court finds as a matter of 

fact that Storms did not communicate element [b4] prior to 

Defendants’ independent conception.” Id. Because BearBox cannot provide proof that Storms communicated the 

claimed subject matter prior to Lancium’s independent 

conception, its challenge fails.

CONCLUSION

We have considered Appellants’ remaining arguments 

and find them unpersuasive. For the reasons stated above, 

we affirm the district court’s dismissal of BearBox’s conversion claim because federal patent law preempts it; we affirm the district court’s exclusion of BearBox’s 

supplemental expert report; and we affirm the district 

court’s denial of BearBox’s claim that Mr. Storms was either a sole or joint inventor of ’433 patent.

AFFIRMED

[3] Claim 1, element [b4] recites, “provide instructions 

to the set of computing systems to perform one or more 

computational operations based on the performance strategy.” ’433 patent col. 59 ll. 26–28.

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