## United States Court of Appeals for the Federal Circuit

03-1444, -1490 CATERPILLAR INC., Plaintiff-Cross Appellant,

v. STURMAN INDUSTRIES, INC., ODED E. STURMAN, and CAROL K. STURMAN, Defendants-Appellants.

William K. West, Jr. , Howrey Simon Arnold & Whit e, LLP, of Washington, DC, argued for plaintiff-cross appellant. With him on the brief were Robert G. Abrams , Gregory J. Commins, Jr. , Christopher J. DelliCarpini and Gary J. Fischman . Of counsel was Pamela S. Kane

. William A. Streff, Jr. , Kirkland & Ellis LLP, of Chicago, Illinois, argued for defendants-appellants. With him on the brief were Paul R. Steadman , Mary E. Zaug , Craig D. Leavell , Mark L. Vanboncouer and Tiffany P. Cunningham

. Appealed from: United States District Court for the Central District of Illinois Chief Judge Joe Billy McDade

## United States Court of Appeals for the Federal Circuit

03-1444, -1490 CATERPILLAR INC., Plaintiff-Cross Appellant,

v. STURMAN INDUSTRIES, INC., ODED E. STURMAN, and CAROL K. STURMAN, Defendants-Appellants.

__________________________ DECIDED: October 28, 2004

__________________________ Before NEWMAN, DYK, and PROST, Circuit Judges

. PROST, Circuit Judge

. Sturman Industries, Inc., Oded E. Sturman, and Carol K. Sturman (collectively, Sturman) appeal from a decisi on of the United States Distr ict Court for the Central District of Illinois, Case No. 99-CV-1201, in which the jury found in favor of Caterpillar Inc. (Caterpillar) on its claims of trade-secr et misappropriation, breach of contract, and conversion. In particular, St urman appeals the district court’s refusal to strike a juror for cause, the denial of judgment as a matter of law, the exclusion of a defense exhibit from evidence before the jury, the assignment of two of its United States patents to Caterpillar, and the grant of summary judgment in favor of Caterpillar on certain of Sturman’s counterclaims. Caterpillar cross- appeals the trial judge’s findings in favor of Sturman on issues of co-inventorship of va rious United States pat ents, as well as thelimitation on state unjust enric hment remedies as preempt ed by federal law. We reverse the district court’s decision to allow a presumed biased juror to sit on the jury, vacate the jury’s verdict and resultant rem edies, and remand for a new trial on the state common law and statutory claims. In additi on, we reverse the grant of summary judgment in favor of Caterpillar on Sturman’ s fraudulent inducement counterclaim, affirm the decision maintaining Mr. Sturman as t he sole inventor of U.S. Patent Nos. 5,460,329 and 5,640,987, and reve rse the decision naming Mr. Sturman the sole inventor of U.S. Patent No. 5,479,901. I. BACKGROUND
A. Facts As the district court noted, “[t]he technology at issue in this case is the use of magnetic latching in a fuel injector via t he use of residual magnetism.” Residual magnetism here refers to magnetism that a materi al continues to exert after it has been magnetized by the process of passing an elec tric current through a coil of wire wound around the material. Mr. Sturman began his work in residual m agnetism in the nineteen-sixties. On July 3, 1973, Mr. Sturman obtained U.S. Patent No. 3,643, 898 (the ’898 patent) on technology employing this phenomenon. The ’ 898 patent relates to “[l]atching devices which utilize the residual magnetis m retained in the relatively soft magnetic materials in the magnetic circuit for the latching force.” ’898 patent, Abstract. Figure 8 of the ’898 patent (below) demonstrates relevant f eatures of the claimed invention.

03-1444, -1490 2In this design, the plunger or armature (202) moves up and down between the upper and lower pole pieces (200a, 200b). Id. at col. 12, ll. 15-29. This moves the attached actuating pin (204), which linearly ac tuates a valve or other device. Id. at col. 12, ll. 7- 12. For example, to move the armature downward, the lower solenoid coil (208) is energized, thus magnetizing the housing and lower pole and creating a magnetic force that attracts the armature (202). Id. at col. 12, ll. 15-20. T he current to the solenoid can be shut off once the armature is in contac t with the lower pole because the armature will remain latched against the lower pole by the residual magnetism exerted by the material. Id. at col. 12, ll. 59-66; co l. 13, ll. 22-24. To then move the armature upward, the upper solenoid coil (206) is energized. This , in turn, pulls the armature to the upper pole. When the armature touches the upper pol e, the current to t he solenoid is again shut off and the armature remains latched via residual magnetism. In the late nineteen-eighties, Mr. St urman worked for Cummins Engine Co. on fuel injector valves. While at Cummins , Mr. Sturman alleges he developed a fuel injector valve using residual magnetic latching. Caterpillar notes, however, that all of the resultant designs used permanent magnets. Later, in the ear ly nineteen-nineties,

03-1444, -1490 3Sturman was developing applications for re sidual magnetism for both BKM, a California fuel injection consulting firm, and the United States Navy, among others. In 1991, Caterpillar and Sturman executed a Consultant Agreement to develop electronically controlled actuators and related dr iver circuits for possible applications in fuel systems for diesel engines. In 1992, the parties replac ed the Consultant Agreement with a Joint Devel opment Agreement (JDA). T he purpose of the JDA was to develop “ACTUATORS and DRIVER CIRCUITS fo r CATERPILLAR’s exclusive use in fuel systems for diesel engines.” Under the JDA, Sturman agreed to assign Caterpillar “INTELLECTUAL PROPERTY made or conceived by [Sturman] personnel, either al one or with others (a) pursuant to the [joint devel opment program] or (b) resu lting from CATERPILLAR’S PROPRIETARY INFORMATION.” The JDA defined “INTELLECTUAL PROPERTY” as “patentable inventions, patents, copyrights, technical trade secrets and/or technical PROPRIETARY INFORMATION.” Caterpillar agreed to pay Sturman royalties on any uses of such intellectual property going forw ard, even after termination of the JDA. Pursuant to the JDA, Sturman and Cate rpillar jointly developed actuators and driver circuits for fuel injection in diesel engines. The work rela ted primarily to poppet valves using linear actuators, which operate under principles similar to those described above with respect to the ’898 patent. The complete systems are known as mechanically actuated, electronically cont rolled unit injectors (MEUIs). Sturman assigned its rights in these inventions to Ca terpillar, which obtained U.S. Patent Nos. 5,407,131 and 5,494,219 claiming such technol ogy (the ’131 patent and ’219 patent, respectively). The MEUI designs under consideration under the JDA had demanding

03-1444, -1490 4physical requirements. They had to open and close nine hundred times per second, with a required life of a billion cycles. In addition, they required a sixty pound latching force over a 0.002 inch air gap. Thus, to make use of residual magnetic latching (as opposed to permanent magnets), it became necessary to find a material with both the necessary magnetic and physical characte ristics capable of withstanding such demanding operational requirem ents. Caterpillar engineers Maley and Tharp engaged in this search, ultimately identifyi ng hardened 52100 and 4140 steels as appropriate for residual magnetic latching in a MEUI. From September 1 to September 3, 1992, Sturman and Caterpillar engineers met at Jumers Castle Lodge, a hotel in Peoria, Illi nois, to discuss fuel in jector designs. On the second day, the team met to “brainsto rm alternate system designs.” The following morning, Mr. Sturman sketched an idea for an in tegrated spool valve employing residual magnetic latching using 52100 steel (below).

(Jumers Drawing.) Mr. Sturman marked his sketch “Confidential.”

03-1444, -1490 5The integrated spool valve works on differ ent principles than the armature-withconnecting-pin design described above. The des ign eliminates the need for a separate armature and connecting pin; it integrates t he armature function into the body of the spool itself. As depicted in the Jumers Dr awing, an integrated spool valve comprises a spool-shaped piece—marked “plunger (52100)”— that moves back and forth within a cylindrical housing. When it moves from one position to another, it opens and closes different flow channels cut around the circumfe rence of the spool. In the integrated spool valve, electromagnetic pole pieces re side at opposite ends of the spool. When an electric current is applied to the electrom agnetic pole pieces at one end of the device, the spool is magnetically attr acted thereto. After the s pool has reached the end and the current has been shut off, residual magnetism latches the spool in place. When a current is drawn through the pole pieces at the opposite end (while a small current is passed through the latched end to demagnetize it), the electr omagnetic force pulls the spool, causing it to slide towards and latch at the other end. Caterpillar rejected the idea for a spool va lve design for a MEUI for a variety of reasons, but primarily because it was not suitable for high pressure 30,000 psi fuel systems. Under these operating conditions , the valve leaked too much. Sturman agreed with this assessment and the parties di d not further develop the idea of a spool valve for use in a MEUI. Nonetheless, Caterpillar engineers did recognize that Sturman’s integrated spool valv e design had “tremendous potential.” In fact, Caterpillar began exploring the idea of using an integrated spool valve for a hydraulically actuated, electr onically controlled unit injector (HEUI). The district court found that contemporaneous memo randa indicate that the idea came from Sturman’s

03-1444, -1490 6design, as presented in the Ju mers Drawing. Caterpillar never informed Sturman about its work using an integrated spool valve for a HEUI. Instead, it tr eated this project as independent and outside of the JDA. By its own terms, the JDA expired in July 1993. To avoid paying ongoing royalties to Sturman under its terms, Caterp illar sought to amend the JDA. It offered Sturman a lump-sum payment of $275,000 and sought a release of any claims involving the JDA in exchange. The parties exec uted the amendment on November 30, 1993. In negotiating the release, Sturman repeatedly sought to determine which intellectual property arose under the JDA. In particular, as reflected in Mrs. Sturman’s handwritten notes from an October 22, 1993, teleconference r egarding the potential buy-out, the release was “to cover everything generated in the program,” specifically the “2 applications w/ Eddie as co-inventor.” A letter dated November 16, 1993, from Anthony Woloch in Caterpillar’s patent depar tment listed as “the inventions naming Eddie as a co-inventor and ar ising under the [JDA],” the tw o patent applications that matured into the ’131 and ’239 patents. This le tter also asked Mr. Sturman to fill out an enclosed form if he believed any other invent ions arose under the JD A. Finally, on the date the parties signed the amendment, Mrs. St urman’s handwritten notes reflect that she asked whether the release would cover “j ust these 2 applications as spelled out [in the] Nov. 16 letter from CAT?” Accordi ng to the notes, Caterpillar responded that the “$275,000 will cover whatever CAT [receiv ed] during our time together” and would “cover anything from the program that [Cat erpillar] utilized now or in the future.” Following the 1993 dissolution of the JD A, Sturman began working on numerous other projects as a consultant. Much of this work focused on integrated spool valve

03-1444, -1490 7designs for clients including Navistar and BKM. In February 1994, Sturman published an article describing this technology in Machine Design . That spring, Sturman also filed two patent applications claiming this technology . The first application related to two-, three-, and four-way versions of the int egrated spool valve technology and issued as U.S. Patent No. 5,640, 987 (the ’987 patent). The second application related to threeand four-way integrated spool valves for a HEUI and issued as U.S. Patent No. 5,460,329 (the ’329 patent). Both patents are related to the spool-valve design depicted in Mr. Sturman’s Jumers Drawing. Meanwhile, Caterpillar continued its own work with an integrated spool valve design for use in a HEUI. In May 1994, Caterpillar’s counsel drafted a patent application covering this technology. T he application named Mr. Sturman as a coinventor. Caterpillar therefore asked Mr. Sturman to sign t he patent application and assign Caterpillar his rights in the inventi on. Mr. Sturman refused, claiming he had invented the technology outside the JDA. In response to the request, Mrs. Sturman sent Caterpillar a letter dated June 14, 1994, which stated: Upon review of Patent App lication No. 92-463, we have found that there must be some mistake. Sturman Industries has already applied for a si milar patent independently. As per your letter of November 16, 1993, there were only two inventions that were derived out of our [JDA] . . . . The material in your Patent A pplication No. 92-463 is almost identical to work that St urman Industries . . . did independently of Caterpillar. In light of this, Caterpillar filed two separat e applications. One was directed to two-way valves, which Mr. Sturman refused to sign and went abandoned. The other was directed to three-way valves, which did not name Mr. Sturman as an inventor and ultimately issued as U.S. Pa tent No. 5,479,901 (the ’901 patent).

03-1444, -1490 8B. Prior Proceedings On June 28, 1999, Caterpillar filed a co mplaint against Sturman in the United States District Court for the Central District of Illinois. Among other things, Caterpillar brought claims alleging Sturman violated the Illinois trade-secret statute, breached the JDA, and unlawfully converted Caterpillar’s pr operty. Caterpillar also sought correction of inventorship of Sturman’s ’329 and ’987 patents. In response, Sturman counterclaimed, seeking, inter alia , correction of inventorship of the ’901 patent and alleging fraudulent inducement of the amendment to the JDA. Before trial, Caterpillar moved for summary judgment on Sturman’s counterclaims. The district court granted-in -part Caterpillar’s motion on the basis that many of Sturman’s counterclaims were barr ed by the release in the amendment to the JDA and, further, because Sturman did not present genuine issues of material fact that it was fraudulently induced into signing that amendment. Caterpillar Inc. v. Sturman Indus., Inc. , No. 99-1201 (C.D. Ill. Dec. 10, 2001) (order denying, inter alia , Sturman’s fraudulent inducement claim). Among other th ings, the district court denied-in-part Caterpillar’s summary judgment motion on Stu rman’s counterclaim seeking correction of inventorship of the ’901 patent. Id. At the beginning of trial, during the jury selection process, Sturman moved to dismiss for cause any current or former Caterpillar employees and their spouses. The district court denied Sturman’s blanket objecti on, but specifically allowed Sturman to show cause for individual juro rs. During that process, over Caterpillar’s objections, Sturman sought to strike for c ause any potential jurors with close ties to Caterpillar. The district court dismissed one juror whose husband was in management at Caterpillar, but

03-1444, -1490 9refused to dismiss other jurors who simply had a connection to certain of Caterpillar’s union-contract employees. St urman did not individually challenge for cause Juror No.
3 1 , the spouse of a current Caterpillar employ ee, nor did it use one of its peremptory challenges to have her removed. Juror No. 3 ultimately sat on the jury. At the conclusion of Caterpillar’s ca se on the merits, Sturman moved for judgment as a matter of law (JMOL) under Ru le 50(a) of the F ederal Rules of Civil Procedure. Sturman argued that, based on Cate rpillar’s evidence, no reasonable juror could rule in favor of Caterpillar on its tr ade-secret, breach-of-contract, and conversion claims. The district court denied Sturman’s motion. See Caterpillar Inc. v. Sturman Indus., Inc. , No. 99-1201 (C.D. Ill. July 12, 2002) (order denying Sturman’s motion for JMOL). Thereafter, Sturman presented its case to the jury. As part of its case, Sturman sought to introduce into evidence DX410, an internal Caterpillar report prepared before the litigation discussing the merits of material choices for the spool valve. Caterpillar objected to the introduction of DX410. The di strict court sustained the objection, finding that its probative value was substantially outweighed by t he danger of unfair prejudice and potential to mislead the jury. See Caterpillar Inc. v. Sturman Indus., Inc. , No. 99- 1201 (C.D. Ill. July 16, 2002) (o rder sustaining Caterpillar’s objection to the admission of DX410). The jury ruled in favor of Caterpillar on all counts before it. In response to a special interrogatory regarding the trade secret, the jury f ound that Caterpillar “proved by a preponderance of the evidence that workabl e magnetic latching in the fuel injector

1 “Juror No. 3” refers to the juror w ho filled out Juror Questionnaire No. 3,

03-1444, -1490 10valve in the absence of pe rmanent magnets via the use of a housing and armature made of a material with sufficient residual magnetism was first made or conceived pursuant to the [JDA].” With respect to t he trade-secret misappropriation claim, the jury found in favor of Caterpillar and awarded $1.00 in nominal damages a nd $1.32 million in restitution for unjust enrichment. With respec t to the breach-of-contra ct claim, the jury found that Sturman breached a variety of diffe rent clauses in the JDA but awarded only $1.00 in nominal damages. Finally, the jury also found in favor of Caterpillar on its conversion claim. The district court conducted a bench tr ial on the correction-of-inventorship claims. On Caterpillar’s claims for correction of inventorship of Sturman’s ’329 and ’987 patents, the court held that Caterpillar failed to rebut, by clear and convincing evidence, the presumption that Sturm an, the named inventor, was the true and only inventor. See Caterpillar Inc. v. Sturman Indus., Inc. , No 99-1201, slip op. 40 (C .D. Ill. Feb. 6, 2003) ( Caterpillar Opinion ). It therefore denied Caterpillar’ s co-inventorship claim. On Sturman’s counterclaim for correction of inv entorship of the ’901 patent, however, the district court found that St urman had presented clear and c onvincing evidence to rebut the presumption that the Caterpillar engi neers named on the patent were the true and only inventors. See id. Consequently, the court named Stu rman as the sole inventor of the ’901 patent. Thereafter, based on the jury findings, t he district court granted Caterpillar additional remedies. Notwithstanding the district court’s inventorship findings in favor of Sturman regarding the ’329 and ’987 patents, the district court granted Caterpillar’s

not the juror who was seated third.
03-1444, -1490 11request for specific performance, ordering St urman to assign Caterpillar sole ownership of those patents. See Caterpillar Inc. v. Sturman Indus., Inc. , No. 99-1201 (C.D. Ill. Feb. 11, 2003) (order directing specific perfo rmance). The district court noted that the ruling depended on the jury’s verdict that Sturman breached the IP-assignment clause in the JDA and converted the ’329 and ’987 patent s in violation of Illinois law. In addition, the court imposed a constructive trust on all monies received by Sturman attributable to the ’329 patent prior to Januar y 2, 1996, at which point Caterpillar’s ’901 patent issued, ending any trade-secret claims. See Caterpillar Inc. v. Sturman Indus., Inc. , No. 99-1201 (C.D. Ill. Feb. 10, 2003) (or der imposing constructive trust). On February 12, 2003, the district cour t entered final judgment in Caterpillar’s favor on all litigated claims. See Caterpillar Inc. v. Sturman Indus., Inc. , No. 99-1201 (C.D. Ill. Feb. 12, 2003). Sturman subsequently filed timely motions for judgment as a matter of law and for a new trial, which the district court denied. See Caterpillar Inc. v. Sturman Indus., Inc. , No. 99-1201 (C.D. Ill. May 29, 2003) (order denying Sturman’s renewed motion for JMOL); Caterpillar Inc. v. Sturman Indus., Inc. , No. 99-1201 (C.D. Ill. May 30, 2003) (order denying Sturman’s mo tion for a new trial). On June 3, 2003, Sturman filed a timely notice of appeal. Ca terpillar responded with a timely notice of cross-appeal on June 27, 2003. After ent ering an amended judgment on June 30, 2003, see Caterpillar Inc. v. Sturman Indus., Inc. , No. 99-1201 (C.D. I ll. June 30, 2003), Sturman filed a corrected amended notice of appeal on July 3, 2003, and Caterpillar filed an amended notice of cr oss-appeal on July 9, 2003. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1). II. DISCUSSION

03-1444, -1490 12Sturman appeals (1) the district court’s decis ion to allow Juror No . 3 to sit on the jury; (2) the district court’s denial of Stu rman’s motions for judgment as a matter of law on Caterpillar’s trade-secret and breach-of-cont ract claims; (3) t he district court’s exclusion of DX410 from evidenc e before the jury; (4) the dist rict court’s assignment of Sturman’s ’329 and ’987 patents to Caterpillar on t he basis of the jury’s verdicts; and (5) the district court’s grant of summary judgment in favor of Caterpillar on various Sturman counterclaims, particularly the fraudulent inducement counterclaim, as having been released under the amendment to the JDA. Caterpillar cross-appeals (1) the district court’s decision denying Caterpillar’s claims that its engineers Ma ley and Tharp were joint inventors of the ’329 and ’987 patents; (2) the district court’ s decision that Sturman was the sole inventor of the ’901 patent; and (3) the district court’s limitati on of Caterpillar’s state unjust enrichment remedies as preempted by federal law. We address each of these issues in turn. A. Whether the District Court Erred By Seating Juror No. 3 1. Standard of review The parties disagree as to the applicable standard of review. Caterpillar argues the more common abuse-of-discretion standard applies, while Sturman contends this case presents a legal question of implied bias, which is reviewed de novo

. Typically, the redress for an assertion of jury bias at the trial co urt is a hearing at which the defendant is afforded the oppor tunity to prove actual bias. Smith v. Phillips , 455 U.S. 209, 217 (1982). “While the Supr eme Court has held t hat the question of whether an individual juror is biased is a fa ctual determination entitled to deference on

03-1444, -1490 13review,” however, “it has never ‘precluded t he use of the conclusi ve presumption of bias’ in ‘extreme’ or ‘e xtraordinary cases.’” Hunley v. Godinez , 975 F.2d 316, 318 (7th Cir. 1992) (quoting Smith , 455 U.S. at 217 (O’Connor, J., c oncurring)). Thus, in cases of implied bias, as opposed to actual bias, “[w]hether a juror’s partiality may be presumed from the circumstances is a question of law,” which we review de novo

. Id. ; see also Skaggs v. Otis Elevator Co. , 164 F.3d 511, 517 (10th Cir. 1998) (“The determination of implied bias is a question of law reviewed de novo .”) As discussed in detail below, Sturman’s ar guments relate to whether the district court should have dismissed for cause Ca terpillar employees, retirees, and their spouses due to their interest in the case, not whether Juror No. 3 had actual bias (which would be a factual question). Accordingl y, Sturman presents a legal question of whether Juror No. 3 was impliedly biased and de novo review applies. 2. Arguments Sturman argues that the district court e rred by allowing Juror No. 3, the spouse of a Caterpillar employee, to sit on the jury. Juror No. 3’s marriage to an employee of a party and consequent financial interest in the case, Sturman contends, required the court to excuse her under United States v. Polichemi , 219 F.3d 698, 704 (7th Cir. 2000), and Getter v. Wal-Mart Stores , 66 F.3d 1119, 1122 (10th Cir. 1995). As Sturman points out, it therefore moved before trial to excuse all such potential jurors (including Juror No. 3) for cause, even warning the district court that failure to do so could warrant finding a mistrial. Contrary to Caterpillar’ s arguments at the dist rict court that the exclusion of these potential jurors w ould violate the rule set forth in Batson v. Kentucky , 476 U.S. 79 (1986), which prohi bits, under the Equal Protection Clause, challenging

03-1444, -1490 14potential jurors solely on the basis of their race, Sturman asserts there is no constitutional right to have the employees of a party and their spouses sit on a jury, even if that party employs a large percentage of the local population. In addition, according to Sturman, having raised the bl anket objection to t he presence of such jurors, it was not required to raise the same point individually for each potential juror, nor was it required to use a peremptor y challenge to dismiss the juror. Caterpillar counters that Stu rman waived its right to appeal the presence of Juror No. 3 because it did not individually object to her presence when offered the opportunity to do so by the district court. Sturman’s blanket objection did not suffice, according to Caterpillar, because “[s]uch a ‘class’ is not presumed biased as a ma tter of law; rather, bias must be shown individually.” Appellee’ s Br. 24. As such, Caterpillar contends, the district court did not abuse its discretion in denying Sturman’s blanket objection and directing it to make indivi dual for-cause showings. Citing Zamora v. Guam , 394 F.2d 815, 816 (9th Cir. 1968), Caterpillar argues Stu rman waived objection by not making an individual motion to strike Juror No. 3 for cause. Moreover, Caterpillar asserts, the cases Sturman relies on do not hold that Juro r No. 3 is biased as a matter of law. Caterpillar particularly points out that the juror at issue in Getter was challenged individually and presumed biased in part because of his stockholdings in Wal-Mart, not simply his spouse’s employment there. 3. Analy s is The threshold issue with regard to the question of juror bias is whether the district court correctly concluded that Sturman waived objection to the presence of Juror No. 3 on the jury. If we disagree wit h the district court as to the waiver issue, we must

03-1444, -1490 15subsequently determine whether Juror No . 3 should have been deemed biased as a matter of law. a. Whether Sturman w a ived objection to Juror No. 3 We hold that Sturman did not waive objecti on to Juror No. 3, who was married to a Caterpillar employee. If a party fails to rais e an argument at trial, it waives any appeal of that issue because, barring a few except ions, an appellate court does not consider arguments first made on appeal. See Datamatic Servs. v. United States , 909 F.2d 1029, 1034 (7th Cir. 1990). In this case, in considering Sturman’s Motion for a New Trial Pursuant to Rule 59 of the Federal Rules of Civil Proc edure, the district court had already considered the waiver issue, concl uding that Sturman waived objection to Juror No. 3 by declining to individually challenge her for cause when offered the opportunity to do so. See Caterpillar Inc. v. Sturman Indus., Inc. , No. 99-1201 (C.D. Ill. May 30, 2003) (order denying Sturman’s motion for a new tria l). The court theref ore concluded that Sturman could not, at that late stage in the tr ial, challenge the proprie ty of Juror No. 3. Id. (relying on Frazier v. United States , 335 U.S. 497, 513 (1949)). In most cases, we are the first to cons ider the legal question of whether a party waived appeal of an issue, basing t hat decision on underlying facts. E.g. , Sage Prods., Inc. v. Devon Indus., Inc. , 126 F.3d 1420, 1426 (Fed. Cir. 1997). In considering the question of waiver here, howev er, we find ourselves revie wing the district court’s conclusion that Sturman waived objection to Ju ror No. 3. Because the issue of waiver on appeal and the issue of waiver on a request for a new trial require the same legal determination based on the same underlying facts, we review the district court’s legal determination de novo and factual determinations for clear error.

03-1444, -1490 16Having reviewed the transcript from the jury selection process in detail, we hold that Sturman did not wa ive objection to Juror No. 3. At the onset of the jury selection process, Sturman requested that the district court hear challenges for cause. Sturman noted that these challenges fell into two categories. “One [was] current employees or retirees from Caterpillar,” and the other was t hose closely related to them, for example, spouses or children. Stu rman had a list of eleven people that it challenged for these reasons, including Juror No. 3. Discussing the motion with counsel in chambers, the court treated it as one to strike for caus e all retirees and current employees of Caterpillar, as well as all spouses of retir ees or current employees of Caterpillar. Caterpillar contested the motion, ar guing that the jury would not be representative of the communi ty if people were dismissed on the basis of having ties with Caterpillar. In response, Sturman ar gued that it was not appropriate to have people on the jury whose financial livelihood ca me from a party to the proceedings. Even if these potential jurors claimed to be impartial, Sturman asserted, it was unlikely to be true given their inherent interest in the case. Stu rman then reiterated that the challenge centered on current and retired Ca terpillar employees and their spouses. Caterpillar concluded the discussion by cont ending any such blanket exclusion of potential jurors would violate t he Supreme Court’s decision in Batson

. In ruling on Sturman’s challenges for cause, the district court sided with Caterpillar on the basis that “it would not be a representative co mmunity without some Caterpillar connection.” It did, however, exclude those potential jurors who knew potential witnesses. The district court also noted that, once it ex cluded this group, “any others you [Sturman] will have to make your re cord”; for those the court would “make a

03-1444, -1490 17decision individually.” The c ourt reiterated, after excusing three potential jurors for knowing potential witnesses, “if you [Sturman] want to make individual motions for cause . . . you can. We will take them up individually.” In making individual challenges for cause, Sturman argued beyond the parameters of the initial blank et objection, noting additional ties to Caterpillar. For example, with respect to one potential juror, Sturman noted that both daughters worked at Caterpillar. With respect to another, Sturman noted that, in addition to having her husband work at Caterpillar, her father had worked there and her son in law currently worked there. While Sturman made its individual c hallenges, Caterpillar repeatedly objected that Sturman was simply r earguing its previous blanket objection individually. Caterpillar made this argument at least three separate times. For example, Caterpillar contended that “now what we’re doing is goi ng one by one, and [Sturman] is going to make the argument with respect to each person that he is a current or retired person at Caterpillar, deriving a paycheck. Well, that is the same thing as striking all these people for cause.” In response, Sturman reminded the court that it “made a motion in the beginning for a group of people to try to expedi te this matter. We could have gone one by one.” During the individual for-cause arguments, the district court focused on whether each potential juror worked in management or held a union-contract position at Caterpillar, or whether the potential juror’ s spouse was in management or held a unioncontract position. The court explained its rationale by stating “if someone is in a union, they have a union contract, it solely isn’t at the whim of management. If they are

03-1444, -1490 18considered management, then they’r e not protected by a union contract. And I presume they may even have employment at will, and that makes a big difference, in my mind.” Sturman disagreed with this logic, arguing that the dividing line was not appropriate because both management employ ees and employees under a union contract would have a financial interest in the outcome of the case. Nearing the end of the proc ess, Sturman returned to the issue of one of the potential jurors that the judge had originally passed on. In doing so, Sturman stated it would “not move to strike either of the la tter two [jurors], although they have significant contact with Caterpillar—sons, as well as one of them’s got a grandson—but we do renew our motion on [Juror].” The judge s ubsequently struck this juror because of his work in Caterpillar management. Based on this record, we conclude Sturman did not waive objection to the presence of Juror No. 3 on the jury. While Sturman began its objection by more broadly trying to exclude all current and retired Caterpillar employees and their immediate family, the judge immediately narrowed t he issue to one of current and retired Caterpillar employees and their spouses. The parties focused their arguments on this alleged ground for dismissal, making the arguments detailed above. Considering this basis alone as the reason for Sturman’s for-cause challenges, the judge refused to dismiss any potential jurors. Thus, it is clear that Sturman voiced it s objection to these potential jurors for reasons of implied bi as, and the court distinctly ruled on the objection. Further, we disagree with Caterpillar and the district court that Sturman had to individually challenge Juror No. 3 to later avoid waiving its objection. To begin,

03-1444, -1490 19Caterpillar’s waiver arguments on appeal that Sturman was required to make individual objections to each and every juror are inconsis tent with its position before the district court. As detailed above, Caterpillar repeat edly objected to Sturman’s individual objections to jurors at trial, contending that all Sturman was doing was making the same arguments it made in its blanket objection. It therefore r epeatedly asked the judge to deny Sturman’s individual objections as having already been ruled on. In any event, while the judge did advise St urman to object to specific jurors individually after refusing to dismiss those ju rors under Sturman’s bl anket objection, the context of those individual challenges reveal s that the judge’s reques t sought to elicit more factually particularized challenges w here appropriate. In other words, having previously rejected Sturman’s blanket objecti on, the judge would allow Sturman to make challenges for reasons supplemental to the or iginal blanket objecti on, allowing Sturman to point out additional facts that might hav e warranted dismissing a potential juror for cause. This is best demonstr ated by the fact that (as discussed) Sturman brought up additional facts about the individual jurors beyond the reasons given in the original blanket objection, particularly the employment by Caterpillar of other immediate family members. This is also hi ghlighted by the judge’s focus on whether an employee held a management or union-contract position at Caterpillar, a matter of fact beyond the bounds of the blanket objection. In making these additional arguments in its individual challenges, Sturman was going beyond the param eters of the original challenge. Indeed, Sturman specifically stated it would not individually challenge Juror No. 3, despite having additional reasons for doing so . This highlights two things. First, as mentioned above, when the judge requested that Sturman make individual challenges,

03-1444, -1490 20Sturman treated that request as seeking additi onal reasons for dismissing jurors, above and beyond the reasons for its blanket objection. Second, by failing to do so, Sturman waived its right to appeal the issue of implied bias potent ially resulting from any additional family connections to Caterpillar, hav ing failed to preserve the record on this issue. Nonetheless, by its original obj ection on the record, Sturman preserved the blanket issue of whether Juror No. 3 should be presumed biased because of her husband’s employment at Caterpillar. Our holding is consistent with Zamora v. Guam , 394 F.2d 815, 816 (9th Cir. 1968), cited by Caterpillar in s upport of its argument. In Zamora , the United States Court of Appeals for the Ninth Circuit refu sed to overturn a guilty verdict based on allegations of juror bias. In that case , the defendant, Zamora, was charged with robbery after a police line-up. At tr ial, the defense attorney made a general objection to the presence of “repeat” jurors—jur ors who had been on the jury for a previous murder trial against Zamora. The trial judge refused to dismiss all such jurors for cause, but “announced that defense counsel c ould explore the matter of prejudice with any juror.” Id. Defense counsel did not question individual ju rors as to any bias. The Ninth Circuit therefore concluded that defense counsel had made a deliber ate choice of trial tactics by not pursuing the issue individually, thereby waiving the issue on appeal. Id. Zamora is distinguishable from this case. As discussed before, actual bias and implied bias require the application of differ ent legal tests. T he bias at issue in Zamora was actual bias. Thus, the trial judge allow ed defense counsel to “explore the matter of prejudice with any juror.” This indicates t hat the bias at issue was a factual question that required inquiry of individual jurors. T he bias at issue here, implied bias, did not

03-1444, -1490 21require such factual inquiry because it is an issue of law. The relevant facts—ties to Caterpillar through employment, retirement, or immediate relatives—were already on the record as a result of t he voir dire process. Part of the rationale for the waiver doctrine—to encourage parties to develop a fu ll record of the ca se—is therefore not applicable. In addition, Sturman already satisfied another rationale for the waiver doctrine—expeditiously informing the court about potential errors so as to put the court on notice of mistakes that, if left uncorrect ed, may result in reversal on appeal. Because this case deals with a legal question of implied bias, not actual bias, and the relevant facts were established during voir di re, Sturman preserved this issue by making its general objection. b. Whether Juror No. 3 w as biased as a matter of law Having concluded from the re cord that Sturman did not waive objection to Juror No. 3, we must determine whether Juror No. 3 was biased as a matter of law such that the district court should have di smissed her. We conclude the district court erred by not dismissing Juror No. 3 for cause because she was biased as a matter of law. Because the issue of juror bias is not an issue of patent law or procedurally related thereto and this case ar ose in the Central District of Illinois, we apply the law of the Seventh Circuit wit h regard to the issue of implied bias. See Utah Med. Prods., Inc. v. Graphic Controls Corp. , 350 F.3d 1376, 1381 (Fed. Cir. 2003) . We also look to opinions of the other regional circuits for their persuasive authority. Courts may use the doctrine of implied bias to dismiss a potential juror in extraordinary circumstances. See Hunley , 975 F.2d at 318; see also Getter , 66 F.3d at 1122. This helps ensure the right to an impartial jury and a fair trial. Skaggs , 164 F.3d

03-1444, -1490 22at 514-17. 2 A party may demonstrate implied bias by “showing that the juror has a ‘personal connection to the par ties or circumstances.’” Id. at 517 (quoting Gonzales v. Thomas , 99 F.3d 978, 987 ( 10th Cir. 1996)); see also Hunley , 975 F.2d at 319 (noting that, in criminal cases, potential jurors have been presumed biased in cases where they have been the victim of a crim e or have experienced a situat ion similar to the one at issue in the trial). Specific examples of extraordinary circumstances in civil cases include owning stock in a corporation that was a party to the suit, Gladhill v. General Motors Corp. , 743 F.2d 1049, 1050 (4th Cir. 1984); see also Getter , 66 F.3d at 1122 (concluding potential juror was biased as a matter of law because of stock ownership and his wife’s employment at defendant-company); as well as working as an employee of a party, see Francone v. Southern Pacific Co. , 145 F.2d 732, 733 (5th Cir. 1944); United States v. Haynes , 398 F.2d 980, 984 (2d Cir. 1968). The doctrine of implied bias has been addressed in detail by several circuit courts, including the Seventh Circuit. In Polichemi , the Seventh Circuit reevaluated its original conclusion that a juror should have been dismissed as a matter of law in light of an intervening Supreme Court case. In the origi nal criminal trial at the district court, the defendants argued that a potential juror shoul d be excluded on the ground of implied bias because she was a long-time employee of the United States Attorney’s Office that was conducting the prosecution. The district c ourt refused to dismiss her for cause. On

2 As the court noted in Skaggs , the Seventh Amendmen t guarantees a civil litigant the right to a trial by jury. 164 F.3d at 514. And while this right is not the same as that guaranteed by t he Sixth Amendment, which grants the right to an “impartial” jury, it applies equally as a result of the Fifth Amendment’s due process protections. Id. Moreover, while most of t he reported cases deal with the issue of implied bias in criminal proceedings, and ther efore the Sixth Amendment, t he reasoning of those cases is “germane” to the Sev enth Amendment analysis here. Id. at 515 n.2.
03-1444, -1490 23petition for rehearing, the Sevent h Circuit affirmed its prior c onclusion that the district court should have excused the potential juro r when the defendants moved to strike her for cause. It noted that “a court must excuse a juror for cause if t he juror is related to one of the parties in the ca se, or if the juror has even a tiny financial interest in the case.” Id. at 704 (citing Getter , 66 F.3d at 1122) (emphasis added). Furthermore, the court so concluded despite assurances from t he potential juror during voir dire that she could be fair and impartial. Id. at 703. Based on the close relationship between the potential juror and the prosecuting office, the Seventh Circuit concluded that the potential juror should have been dismissed as a matter of law, noting that “the law errs on the side of caution.” Id. at 704. In Getter , the plaintiff sued Wal-Mart because she was injured in a slip and fall accident. At the district court, Getter challenged a prospective juror both because he owned stock in Wal-Mart and his wife was employed there. Getter , 66 F.3d at 1122. The district court refused to dismiss t he juror for cause, however, and Getter used a peremptory challenge. Id. The appellate court began it s review by noting that extraordinary conditions call for a presumption of bias, listing as examples of such conditions ownership of stock in a company or working for a cor poration that was a party to the suit. Id. “In these situations, the relati onship between the prospective juror and a party to the lawsuit points so sharply to bias in [the] particular juror that even the juror’s own assertions of impartiality must be discounted in ruling on a challenge for cause.” Id. (internal quotes omitted). Consequently , the court found that the district court abused its discretion as a matter of law by not dismissing the juror for cause. Id. “Due to his stock ownership and his wife’s em ployment, Mr. Agin’s financial well-being

03-1444, -1490 24was to some extent dependent upon defendant’s. This is precisely the type of relationship that requires the district court to presume bias and di smiss the prospective juror for cause.” Id. We conclude that the district court shoul d have dismissed Juror No. 3 for implied bias. Juror No. 3 had a financial interest in this case because her husband worked for Caterpillar at the time of the trial. As noted in Polichemi , even a tiny financial interest is enough to warrant dismissal. And it is legally irrelevant whether this financial interest arose due to his employment in management or under a union contract. We therefore disagree with the district cour t’s reasoning during the jury se lection process, whereby it either retained or dismiss ed potential jurors based on, respectively, employment under a union contract or, alternativ ely, in management. In either case, there is a financial interest in the outcome of the case. In addition, we find no distinction in the law between the financial interest of an at-will management employee and t he interest of an employee under a union contract, nor do we advocate creating one. The situation of Juror No. 3 is akin to the juror in Getter . As discussed, in Getter , the Tenth Circuit found t hat the district court erred by failing to dismiss a potential juror in part because he was married to a wom an who worked for the defendant. Although there is no record in this case regarding stock ownership, as in Getter , Juror No. 3’s “financial well-being was to some extent dependent upon defendant’s.” Id. She should have been presumed biased and dismissed for c ause, despite assurances that she could be fair and impartial. See id. ; Polichemi , 219 F.3d at 703. Having concluded that Sturman preserved its objection to Juror No. 3 and that she was biased as a matter of law, we revers e the district court’ s decision to empanel

03-1444, -1490 25Juror No. 3. 3 Because Juror No. 3 actually sat on the jury, we vacate the jury’s verdicts in favor of Caterpillar on its claims of trade- secret misappropriation, breach of contract, and conversion, and order a new trial thereon. See Martinez-Salazar , 528 U.S. at 316 (ordering a new trial because a bias ed juror actually sat on the jury). 4 In addition, we also vacate the district court’s grant of s pecific performance ordering Sturman to assign the ’329 and ’987 patents to Caterpillar becaus e the grant of this remedy was based purely on the jury’s verdict. B. Summary Judgment on Sturman’s Fraudulent Inducement Counterclaim As one of its counterclaims at trial, St urman alleged that Caterpillar fraudulently induced it to execute the amendment to the JD A by misrepresenting it s scope. At trial, Caterpillar filed a motion for summary judgment as to all of Sturman’s counterclaims, which the district court resolved in Caterpilla r’s favor. With respect to the fraudulent inducement claim, the district court held that the evidence produced was insufficient to create a genuine issue of material fact and thereby preclude summary judgment. In particular, the court found that Mrs. St urman’s contemporaneous notes from the negotiations of the terms of the amendment demonstrated that Caterpillar clearly “communicated to Sturman that the release was to cover anything from the JDA that Caterpillar was utilizing or would utilize in t he future.” It further found Mr. Sturman’s

3 Notably, Sturman did not have to us e a peremptory challenge to correct the district court’s error. United States v. Martinez-Salazar , 528 U.S. 304, 316 (2000).

4 Based on our decision, we do not address two other issues raised by Sturman on appeal: (1) whether the district court properly denied Sturman’s motion for judgment as a matter of law; and (2) whether the district court properly excluded DX410 from evidence. Finally, we do not address t he cross-appeal issue of whether the district court properly limited state unj ust enrichment remedies as preempted by federal law.

03-1444, -1490 26affidavit self-serving and insufficient to cr eate a genuine issue of material fact. It therefore concluded that Caterpillar did not fraudulently induce Sturman into signing the JDA amendment. 5
We review the district cour t’s grant of summary judgment de novo

. See Davis v. Con-Way Transp. Cent. Express, Inc. , 368 F.3d 776, 782 (7th Cir. 2004). Summary judgment is appropriate “if the pleadings, depositi ons, answers to interrogatories, and admissions on file, together with the affidavit s, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c) . “The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255 (1986)

. On appeal, Sturman argues that the district court improperly granted summary judgment because there were genui ne issues of material fact as to whether Caterpillar fraudulently induced Sturman to enter into the amendment, which contained the release. Sturman contends that Caterpillar fa lsely represented that it was considering only two inventions (not incl uding the integrated spool valv e technology) to be within the scope of the JDA. Given its repeated inquiri es into which technology was covered by the JDA, Sturman argues, it was misled, in part, by Anthony Woloch’s November 16, 1993, letter, which identified only two Stu rman poppet-valve designs as “arising under the JDA.” Sturman avers it understood this response to be a representation that

5 Because the spool valve technology was covered under the JDA—having been disclosed by Sturman to Caterpillar as an alternate solution—and the release applied to all actions arising out of the JDA, the court found that St urman released all its claims regarding the integr ated spool valve design.

03-1444, -1490 27Caterpillar did not consider Mr. Sturman’s in tegrated spool valve design to have been made or conceived pursuant to the JDA. According to Sturman, had it known Caterpillar was using the design, it woul d have negotiated different terms for the amendment. Furthermore, Sturman contends, the district court erred by dispositively resolving the issue on the basis of Mrs. St urman’s contemporaneous notes; at best, it argues, they provide evidence for arguments to a jury. Finally, Sturman notes, a release is not effective against a claim of fraudulent inducement of that release under Illinois law. Caterpillar contends otherwise, arguing that the district court properly granted summary judgment on Sturman’s counterclai ms as released under the amendment to the JDA. Focusing on the necessary el ements of a fraudulent inducement claim, Caterpillar asserts that Sturman did not ra ise a genuine issue as to whether Caterpillar made a knowingly false statement of material fact for the purpose of inducing reliance, and that Sturman actually relied to its detriment. In particular, Caterpillar focuses, as did the district court, on Mrs. Sturman’s contemporaneous notes, wh ich it contends demonstrate that Sturman kno wingly and willingly released all future claims. According to Caterpillar, because Sturman revi ewed and signed the unambiguous release language, it cannot contend that Caterpillar misrepresented its scope, which is a legal and not a factual question. In addition, Cate rpillar avers, Anthony Woloch’s letter does not amount to a false statement because it never suggested that the two inventions over which Caterpillar asserted its rights were the only inventions it believed were conceived under the JDA.

03-1444, -1490 28We hold that the distri ct court erred by granting summary judgment in Caterpillar’s favor because, in one limited respec t, we think that sufficient allegations of fraudulent inducement have been made to create a genuine issue of material fact. The amendment to the JDA, which contained the release, provided, in pertinent part, that Sturman release and forever discharge Cate rpillar, Inc. . . . from any and all claims, demands, actions or causes of actions at law or equity relating to or arisi ng out of i) AC TUATORS and/or DRIVER CIRCUITS created under the PROGRAM (including derivatives thereof) whic h are manufactured by CATERPILLAR, . . . and/or ii) any subject matter of the [JDA]. There is a genuine issue as to whether, dur ing the negotiations of the terms of the amendment, Caterpillar knowingly and falsely cr eated the impression t hat it considered only two inventions to have been developed under the JDA, and that the integrated spool valve design was not one of them. First, drawing all justifiable inferences in favor of Sturman, there are genuine issues of material fact as to whether Ant hony Woloch’s letter to Sturman was false or misleading with respect to the contemporaneous negotiation of the JDA amendment. Anthony Woloch, in his letter to Sturman on November 16, 1993, stat ed that “Exhibit A lists the inventions naming [Mr. Sturman] as a co-inventor and arising under the [JDA] between our companies.” But Exhibit A listed only the patent applications that matured into the ’131 and ’219 patents and never m entioned the spool valve technology. While we agree with Caterpillar that Woloch ’s letter did not st ate that Exhibit A listed the only inventions Caterpillar then believ ed were created under the JDA, one can justifiably infer that Stu rman may have been lulled into thinking that this was then

03-1444, -1490 29Caterpillar’s belief. Likewise, Caterpillar argues that Woloch’s letter left open the question of what the JDA cover ed by asking Sturman if it k new of any other inventions that arose thereunder. But one might also reasonably infer that Woloch’s letter suggested that Caterpillar ot herwise had a complete list of the technology created pursuant to the JDA, only to be supplemented by Sturman. Second, Mrs. Sturman’s contemporaneous not es also demonstrate the existence of genuine issues of material fa ct. Drawing all justifiable inferences, these notes show that Sturman understood Caterp illar’s representation regardi ng the technology at issue to be the “2 applications w/ Eddie as co-i nventor,” and that Mrs. Sturman asked “Would it be just these two applications as spell ed out [in the] Nov. 16 letter from [Anthony Woloch]?” Mrs. Sturman’s notes thus reflect the confusi on that arose from the language in Anthony Woloch’s letter; they suggest that Sturman understood Caterpillar to lay claim to only those two inventions under t he JDA mentioned in Woloch’s letter. In conclusion, applying the standard fo r summary judgment and drawing all inferences in favor of Sturm an, we conclude that the distri ct court improperly granted summary judgment in favor of Caterpillar on the issue of Sturman’s counterclaim of fraudulent inducement. Specifically, material issues of fact exist regarding whether Caterpillar knowingly intended to deceive St urman with false statements to induce Sturman’s signing of the am endment. In particular, as discussed above, one could justifiably infer from bot h Anthony Woloch’s letter of October 16, 1993, and Mrs. Sturman’s contemporaneous notes from the JDA amendment negotiations that Sturman was led to believe that Caterpillar underst ood the JDA to cover only the two patent applications and not the integr ated spool valve technology. It is on this limited basis

03-1444, -1490 30that we reverse the district court’s grant of summary judgment as to the fraudulent inducement counterclaim. Sturman’s other allegations of fraudulent inducement concerning the scope of the release raise no ma terial issues of fact, as, under Illinois law, interpretation of the language of the release is a question of law governed by the “traditional rules of contract interpretation.” Hoseman v. Weinschneider , 322 F.3d 468, 473 (7th Cir. 2003). Contrary to argument s advanced by Caterpillar, however, the language of the release cannot be used to prevent a court from inqu iring into whether the release itself may have been fraudulently induced. “As with any contract, a release may be set aside if there is fraud in the inducement.” Id. at 476 (internal quotations and citations omitted); see also Lawrence v. Muter Co. , 171 F.2d 380, 384 (7th Cir. 1940) (noting that fraudulent inducement can serve to vitiate a release even when the release language was unequivocal). We therefore reve rse the grant of summary judgment on Sturman’s fraudulent-inducement counterclaim in favor of Caterpillar and remand for trial. 6 C. Caterpillar’s Claims of Joint in ventorship of the ’329 and ’987 Patents At trial, the court found in favor of Sturman on Caterpillar’s claims seeking correction of inventorship to the ’329 and ’987 patents. Following detailed factual findings, see Caterpillar Opinion at slip. op. 5-21, the district court arrived at this legal conclusion based primarily on the fact that the specific materials identified by Maley and

6 If, upon remand, Sturman is unable to demonstrate that the release was fraudulently induced, the district court’s fi ndings (not appealed by Sturman) that the release covered all of Sturman’s claims ar ising under the JDA woul d stand. Apart from the fraudulent inducement i ssue, there has been no cont ention on appeal that the district court’s holding that “Sturman’s misappropriation of trade secrets claims with respect to the spool valve (Count I), fraud cl aim (Count V), and breach of contract claim (Count XX) have been released” was erroneous.
03-1444, -1490 31Tharp were not significant to t he claimed spool valve technology. See id. at slip op. 44- 45. While the district court agreed that Maley and Tharp’s research into 52100 and 4140 steels was important for the poppet valve design developed under the JDA, it found the demands of the integrated spool valve claimed in the ’329 patent to be far less. See id. at slip op. 41-42. In particular, the district court found that the spool valve did not require sixty pounds of la tching force over a 0.002 inch air gap; it was a zero-airgap system that, consequently, requir ed much less latching force. See id. at slip op. 42- 43. The district court also found that t he ’898 patent taught that “substantially any magnetic material” would latch in a system with zero air gap. See id. at slip op. 43-44. Thus, the court concluded: Given the existence of the ’898 patent, the existence of texts in the public domain separatel y detailing the physical and magnetic properties of these ma terials . . . and the claimed design of the ’329 patent, Cate rpillar’s selection of 52100 and 4140 was merely the exercise of ordinary skill in the art and therefore not a significant addition to the conception of the ’329 patent. Id. at slip op. 44. The district court theref ore denied Caterpillar’s co-inventorship claim. For the same reasons, it denied Caterp illar’s request regarding the ’987 patent. See id. Inventorship is a question of law t hat we review wit hout deference. See Sewall v. Walters , 21 F.3d 411, 415 (Fed. Cir. 1994). We re view the underlying findings of fact for clear error. See Hess v. Advanced Cardiovascular Sys., Inc. , 106 F.3d 976, 980 (Fed. Cir. 1997). On appeal, Caterpillar contends that the district court erred in denying Caterpillar’s claims that engineers Maley and Tharp were co-inventors of the ’329 and ’987 patents. With respect to the ’329 patent, Caterpillar notes that the claims include

03-1444, -1490 32the limitation “a material with enough resi dual magnetism to maintain [the] spool position” through residual magnetic latchi ng. Moreover, Caterpillar argues, the preferred materials are the steels resear ched by Maley and Tharp. According to Caterpillar, because the ’329 patent claims were only allowed after being amended to include the “material with enough residual magnet ism . . .” limitati on, Maley and Tharp materially contributed to the claimed inv ention. In addition, Caterpillar argues, the district court applied an incorrect inventorship analysis. By finding t hat the contribution of Maley and Tharp “was not significant as compared to” the spool valve design, Caterpillar asserts, the district court failed to apply the proper test—whether the contribution was “not insignificant in quality” as measured against t he whole. Caterpillar also argues that the distri ct court incorrectly found t hat knowledge regarding which materials would work to achieve residual magnetism was public information that any person of ordinary skill in t he art could apply in accordance with the teachings of Sturman’s ’898 patent. With respect to the ’987 patent, Caterpilla r also asserts that Maley and Tharp made a “not insignificant” contribution. In particular, Caterpillar points out, Sturman amended its patent claims to cover residual magnetism in the spool and housing, arguing that the invention re lied on hard steel, a feature Sturman learned from Maley and Tharp. Caterpillar notes, however, that Sturman argued over a rejection by saying that the use of hard steels wa s not taught in the prior art, which included Sturman’s ’898 patent. In light of the am endments and arguments, Caterpillar avers, the district court erred by finding that Maley and Tharp’s contri bution did not make a “not insignificant contribution.”

03-1444, -1490 33In response, Sturman argues that the district court correctly determined that Mr. Sturman is the sole inventor of the ’329 and ’987 patents. According to Sturman, the only contribution Maley and Tharp cl aim to have made—identifying 52100 and 4140 steel for residual magnetic latching—is not ac tually a claimed feat ure of either patent; thus, they do not qualify as co-inventors. And while the claims do generally recite a “material with enough residual magnetism to maintain said spool in position” (emphasis added), Sturman points out that Maley and T harp never worked with Sturman on spool valves. In addition, Sturman avers, their materials search related to a fundamentally different type of design—a poppet valve that requires sixty pounds of latching force across a 0.002 inch air gap. With respect to spool valves, notes Sturman (echoing the district court’s findings), the choice of ma terials would have been an exercise of ordinary skill after the teachings of the ’898 patent; the lesser demands of such a valve did not require specific materials. Patent issuance creates a presumption that the named inventors are the true and only inventors. Hess , 106 F.3d at 980. To rebut this pr esumption, a district court must find clear and convincing evidence that the alleged unnamed inventor was in fact a coinventor before correcting invent orship under 35 U. S.C. § 256. Pannu v. Iolab Corp. , 155 F.3d 1344, 1350 (Fed. Cir. 1998). “[T]o be a jo int inventor, an individual must make a contribution to the conception of the claim ed invention that is not insignificant in quality, when that contribution is measured against the dimensi on of the full invention” Fina Oil & Chem. Co. v. Ewen , 123 F.3d 1466, 1473 (Fed. Cir. 1997). This requires more than merely exercising ordinary skill in the art—“a person will not be a co-inventor if he or she does no more t han explain to the real inve ntors concepts that are well

03-1444, -1490 34known [in] the current state of the art.” Id. Finally, an alleged co-inventor’s testimony cannot, standing alone, provide clear and convincing evidence. Ethicon, Inc. v. United States Surgical Corp. , 135 F.3d 1456, 1460 (Fed. Cir. 199 8). Instead, an alleged coinventor must supply evidence to corroborate his or her testimony. Id. We agree with the district court that Caterpillar has not presented clear and convincing evidence to rebut the presumption that Mr. St urman is the true and only inventor of the ’329 and ’987 patents. With respect to the ’329 patent, we defer to the district court’s findings of fact. In particular, we defer to its findi ngs that: (1) neither Maley nor Tharp nor anyone else at Caterpillar had conceived of an integrated spool valve prior to being shown Mr. Sturman’s Jumers Drawing, Caterpillar Opinion , ¶ 9, at slip op. 9; (2) Caterpillar’s only claim ed contribution to t he ’329 patent was the identification of 52100 and 4140 steel for residual magnetic latching, id. ¶ 10, at slip op. 9; (3) an integrated spool valve such as t hat claimed in the ’329 patent has no air gap and requires significantly less than sixty pounds of latching, id. ¶ 11, at slip op. 10; (4) the contribution of suitable materials for t he design claimed in the ’329 patent was not significant, id. ¶ 13, at slip op. 11; (5) the ’898 patent teaches that “substantially any magnetic materials” will work for residual magnetic latching in a zero-air-gap system such as the ’329 patent, id. ¶ 19, at slip op. 14; and (6) various publicly available texts and patents describe the basic magnet ic properties of 52100 and 4140 steel, id. ¶¶ 24- 25, at slip op. 16-17. On the basis of the district court’s factual findings, we agree with its ultimate legal conclusion that Maley and Tharp should not be named as co-inventors of the ’329 patent. As Sturman argues on appeal, the facts found by the district court demonstrate

03-1444, -1490 35that they neither developed nor worked on an integrated spool valve under the JDA, that such a design does not require as much latchi ng force, and, finally, t hat the teachings of the ’898 patent together with information in the public domain regarding material properties would have made the choice of mate rials an exercise of ordinary skill in the art. Thus, the use of 52100 and 4140 steels was an insignificant contribution and does not support their claims of co-inventorship. In addition, we agree with the district court’s legal conclusion because the ’329 patent clai ms do not mention either 52100 or 4140 steel and Fina Oil requires that one contri bute something to the claimed invention. 123 F.3d at 1473. Caterpillar’s arguments to the contrary ar e not persuasive. First, we disagree with Caterpillar that Sturman’s amendments to the ’329 patent clai ms demonstrate that Maley and Tharp made an inventive contributi on. The addition of the “material with enough residual magnetism . . .” limitation is broad; it is not limited to the specific steels identified by Maley and Tharp. Moreover, as the district court found, when used in an integrated spool valve such as claimed in the ’329 patent, the teac hings of Sturman’s ’898 patent provide all that is necessary for one of skill in the art to identify the appropriate materials. We also reject Ca terpillar’s argument that the district court employed the incorrect legal standard. In considering whether Maley and Tharp contributed anything to the ’329 patent, the district court spec ifically weighed the quality of their identification of 52100 and 4140 steel against the value of the whole design, concluding that the contribution was insignificant. For the reasons discussed above, we also affirm the district court’s decision to deny Maley and Tharp co-inventorship of the ’987 patent. Specifically with respect to

03-1444, -1490 36Caterpillar’s arguments, we again note that the amendment of the claims was not relevant because the additional language broadly claimed residual magnetism and the ’898 patent taught those skilled in the art to identify the appropriate materials. In addition, the distinct hard st eel limitation is also irre levant because the ’898 patent teaches that “substantially any magnetic ma terials” will work for residual magnetic latching in a zero-air-gap system, whether hard or soft. D. Caterpillar’s Claim of Joint inventorship of the ’901 Patent With respect to Caterpillar’s ’901 patent, the trial court found in favor of Mr. Sturman as to his claim of sole inventorship. Caterpillar Opinion at slip op. 46. As the district court explained, Caterpillar’s ’901 pat ent generally claims a three-way integrated spool valve for use in a HEUI, in addition to other, more specific features. See id. Noting that Mr. Sturman origi nated the concept of a two-wa y integrated spool valve in the Jumers Drawing, the district court ev aluated whether the additi onal features claimed by Caterpillar in the ’901 patent “were either significant or more than merely the exercise of ordinary skill in the art.” Id. In particular, the district court addressed Caterpillar’s arguments that a three-way c onfiguration for use in a HEUI was a significant improvement. See id. at slip op. 47. The court found that Mr. Sturman first dev eloped this idea, as demonstrated by slides from a presentation to Caterpillar on October 14, 1992. See id. In this presentation, during which Mr. Sturman proposed an “integrated product line” of valves, the court found that Sturman revealed to Ca terpillar an idea for a three-way spool valve configuration. See id. at slip op. 47-48. As for Caterpillar’s other alleged improvements—hollowing the spool valve, narro wing the waist of the spool, and partially

03-1444, -1490 37blocking the channels in the spool—the court f ound that these were either an exercise of ordinary skill in the art or di sclosed in the Jumers Drawing. See id. at slip op. 48-49. Consequently, the district court held in favo r of Sturman on its counterclaim seeking sole inventorship of the ’901 patent. See id. at slip op. 49. We apply the same standard of review and legal rules detailed above in our discussion regarding Caterpillar’s co-inventorship claims to the ’329 and ’987 patents. Caterpillar appeals the district court’s conc lusion that Mr. Sturman was the sole inventor of the ’901 patent. In keeping wit h its arguments regarding the ’326 and ’987 patents, Caterpillar generally ar gues that the court erroneously focused on the “heart” of the invention—a spool valve—as opposed to ot her claimed features, which were not old or disclosed in the Jumers Drawing. Firs t, Caterpillar contends, Sturman never worked with Caterpillar on a three-way spool valv e for a HEUI, and certainly never had a “definite and permanent idea” of such a devic e such that he could be considered the sole inventor. Second, according to Ca terpillar, the Jumers Drawing and Sturman’s October 14, 1992, presentat ion mentioning a three-wa y valve do not evidence conception of the invention cl aimed in the ’901 patent. Specifically with respect to the marketing presentation, Caterpillar argues that nothing suggests that Sturman was introducing a new design for a three-way int egrated spool valve for a HEUI. Third, Caterpillar asserts, the district court erred in failing to find any suggestion for combining the claim features it consi dered within the skill of the art, thereby failing to appreciate the novelty of the combinat ion. Consequently, Caterpillar asks that we reverse the district court’s inventorship conclusion becaus e, it insists, Mr. Sturman did not clearly and convincingly show that he alone conceived everything claimed in the ’901 patent.

03-1444, -1490 38In response, Sturman argues that the district court correctly determined that Mr. Sturman is the sole inventor of the ’901 patent. Contrary to Caterpillar’s assertions, Sturman contends, Mr. Stu rman need not have shown he conceived of everything claimed in the ’901 patent. Instead, according to Sturman, Mr. Sturman need only satisfy the inventorship test described above. As it did with respect to the ’326 and ’987 patents, Sturman counters Cate rpillar’s arguments that the di strict court erroneously focused on the “heart” of the invention by asserting that the court correctly applied the law and measured Caterpillar’s contribution agains t the “full measure of the invention,” concluding that they did not meet the standard for inventorsh ip. Moreover, according to Sturman many of Caterpillar’s arguments relate to findings of fact, which it fails to demonstrate were clearly erroneous. In particu lar, Sturman points ou t, the district court found both that Mr. Sturman conceived the idea for a spool valve and suggested the idea for a three-way valve, only after whic h Caterpillar developed a three-way integrated spool valve for a HEUI and claimed it in the ’901 patent. As the district court found, all the cl aims generally cover a three-way, dualsolenoid, integrated spool valve used to contro l the flow of working fluid in a HEUI. Caterpillar Opinion at slip op. 23-24. Notably, we agree with the court’ s finding that Mr. Sturman conceived of a two-wa y integrated spool valve. Id. ¶¶ 9-11, at slip op. 25-26. We note also that the district court found t hat a three-way valve is more complex than the two-way valve conceived by Mr. Sturman. Id. ¶ 13, at slip op. 26. Given this difference in complexity, we conclude that the idea for a three-way valve was “not insignificant in quality, when . . . measured against the dimension of the full invention,” Fina Oil , 123 F.3d at 1473, and, consequently, was wo rthy of an inventorship claim.

03-1444, -1490 39We conclude that the district court clear ly erred in finding that, in addition to conceiving the design for an integrated spool valve, Mr. Sturm an presented clear and convincing evidence that he also conceived t he idea of a three-way version of the valve applied to a HEUI. In particular, the distri ct court clearly erred in finding that Mr. Sturman disclosed the idea as part of a propos al for an integrated product line in his October 14, 1992, presentation. Caterpillar Opinion ¶¶ 14-15, at slip op. 26-27. Having reviewed the slides from t he presentation, we agree with Caterpillar that they do not demonstrate that Mr. Sturman conceived of the idea of a three- way integrated spool valve. These slides relate to a pres entation entitled “Adv anced Solenoid Valve Manufacturing,” and one slide particularly rela ted to Mr. Sturman’s proposal for an integrated product line. Although that slide does mention both a “2-way valve” and “3- way valve,” it does not refer to an integrated s pool valve. Nor is t here any reference to such a valve elsewhere in the presentation. Instead, as Caterpillar points out, the presentation as a whole relates to plans to continue with the in itial proposal for a traditional solenoid valve (such as the one described above in relation to the ’898 patent). Consequently, we conclude that the district court’s finding that Mr. Sturman disclosed the idea for a three-way integrat ed spool valve in his presentation to Caterpillar on October 14, 1992, was clearly erroneous. Accordingly, we reverse the district c ourt’s ultimate legal conclusion that Mr. Sturman was the true and sole inventor of the invention claimed in the ’901 patent. Because Mr. Sturman did not present clear and convincing evidence that he conceived of the idea for a three-way int egrated spool valve in his present ation, there is insufficient

03-1444, -1490 40corroborating evidence proving that Mr. Sturman was the so le inventor of the ’901 patent. 7
III. CONCLUSION For the reasons stated above, we: (A) REVERSE the district court’s decision to a llow Juror No. 3 to sit on the jury, and therefore VACATE the jury’s verdict and resultant remedies and REMAND for a new trial on the state comm on law and statutory claims (rendering moot Sturman’s issues regarding the denial of JMOL in favor of Sturman, assignment of the ’329 and ’987 patents to Caterpillar, and exclusion of DX410 from evidence); (B) REVERSE the grant of summary judgment in favor of Caterpillar on Sturman’s fraudulent-induc ement counterclaim; (C) AFFIRM the decision that Mr. Sturman is the sole inventor of the ’329 and ’987 patents; and (D) REVERSE the decision naming Mr. Sturman the sole inventor of the ’901 patent.

7 As Caterpillar points out, Mr. St urman only sought to have himself declared the sole inventor. We therefore decline to address whether he might be a joint inventor.
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