# United States **Court of Appeals**  **for the Federal Circuit**

______________________ TRIREME MEDICAL, LLC , Plaintiff

- Appellant

v.

ANGIOSCORE, INC., Defendant

- Appellee

______________________

2015

- 1504

______________________ Appeal from the United States District Court for the Northern District of California in No. 3:14

- cv

- 02946

- LB, Magistrate Judge Laurel Beeler.

______________________

Decided: February 5, 2016

______________________

D AVID A. C AINE , Arnold & Porter, LLP, Palo Alto, CA, argued for plaintiff

- appellant. Also represented by T HOMAS T. C ARMACK , M ICHAEL D UY K HIEM N GUYEN , J AMES C. O TTESON

.

P ETER J. A RMENIO , Quinn Emanuel Urquhart & Sull ivan, LLP, New York, NY, argued for defendant -appellee. Also represented by W ILLIAM A DAMS , M ATTHEW R OBSON , C LELAND B. W ELTON , II; A ARON B ERGSTROM , San Franci sco, CA.TRIREME MEDICAL
, LLC v. ANGIOSCORE
, INC

. 2

______________________

Before P ROST , Chief Judge, D YK , and C HEN , Circuit Judges.

D YK , Circuit Judge

. AngioScore , Inc. (“AngioScore”) claims exclusive ownership of U.S. Patent Nos. 8,080,026 (“the ’026 p atent”) , 8,454,636 (“the ’636 patent”) , and 8,721,667 (“the ’667 patent”) (collectively, “the AngioScore patents”). T riReme Medical, LLC ( “TriReme”) , claiming to have received an assignment of an interest in the AngioScore patents from Dr. Chaim Lotan, brought suit for correction of inventorship. It sought to have Dr. Lotan named as an inventor on the patents pursuant to 35 U.S.C. § 256

. The district court dismissed for lack of subject matter jurisdi ction, holding that any interest Dr. Lotan may have had in the AngioScore patents had been assigned earlier to AngioScore under a consulting agreement, and that TriReme as a consequence lacked standing. TriReme appeals . We reverse and remand for further proceedings.

B ACKGROUND AngioScore sells a line of angioplasty balloon cath eters called AngioSculpt, which are designed to open arterial blockages

. To accomplish this, an An gioSculpt devic e is inserted into a blood vessel and inflated when it reach es the targeted occlusion area. The balloon c ontain s a metal spiral on its surface, which expands as the ba lloon inflates and scor es the plaque lining the occluded blood vessel

. The balloon is then deflated and the device removed from the vessel. All three AngioScore patents relate to this concept. E ach list s three inventors : Dr. Eitan Konstantino, Tanhum Feld, and Nimrod Tzori. None list s Dr. Chaim Lotan as an inventor

.TRIREME MEDICAL
, LLC v. ANGIOSCORE
, INC

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TriReme is a competitor of AngioScore. Apparently concerned that AngioScore might charge TriReme with infringement of the ’026, ’636, and ’667 patents

, TriReme sought to acquire an interest in the AngioScore patents from Dr. Lotan, who performed consulting services for AngioScore . I n June 2014, Dr. Lotan granted TriReme an exclusive license to “any and all legal and equitable rights” he held in the AngioScore patents

. J.A. 317. Dr. Lotan testified that he retained no financial interest in the patents. If Dr. Lotan was an inventor of the patents and TriReme acquired his interest , TriReme could practice the patent s and would have a defense to infring ement. See 35 U.S.C. § 262; Shum v. Intel Corp. , 629 F.3d 1360, 1369 (Fed. Cir. 2010).

Dr. Lotan claims that hi s inventive contribution arose from his work in connection with the development of the AngioSculpt catheters in 2003

, which is reflected in the AngioScore patents

. AngioScore’s defense to this claim is based on a contract entitled “AngioScore, Inc. Consul ting Agreement” (“ Consulting Agreement”) between Ang ioScore and Dr. Lotan, with an effective date of May 1, 2003. J.A. 309. AngioScore asserts that it had acquired rights to all inventive work completed by Dr. Lotan under both § 9(a) and § 9(b) of the Consulting Agreement.

TriReme brought suit for correction of inventorship pursuant to 35 U.S.C. § 256

, seeking to have Dr. Lotan named as an inventor of the AngioScore patents

. Ang ioScore moved to dismiss for lack of subject matter juri sdiction, arguing that TriReme lacked standing because Dr. Lotan had assigned any rights he may have had in his inventive contribution to the patents to AngioScore under the Consulting Agreement, and that, accordingly, Dr. Lotan had nothing to later license to TriReme

. The district court granted AngioScore’s motion and dismissed the complaint. See TriReme Med., LLC v. AngioScore, Inc.

, No. 14

- cv

- 02946

- LB, 2015 WL 1246532 (N.D. Cal.TRIREME MEDICAL
, LLC v. ANGIOSCORE
, INC

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Mar. 17, 2015). It held that the “question of when Dr. Lotan completed work is ultimatel y immaterial,” inte rpreting the Consulting Agreement to provide for assig nment of Dr. Lotan’s interest to AngioScore regardless of the date of his work . J.A. 8

. TriReme appealed. We have jurisdiction pursuant to 28 U.S.C. § 1295 (a)(1). Standing in an inventorship dispute is a question of law that we review de novo. Chou v. Univ. of Chicago , 254 F.3d 1347, 1355 (Fed. Cir. 2001). We also review the interpretation of a contract de novo. Intel Corp. v. ULSI Sys. Tech., Inc.

, 995 F.2d 1566, 1569 (Fed. Cir. 1993).

D ISCUSSION When the owner of a patent assigns away all rights to the patent, neither he no r his later assignee has a “co ncrete financial interest in the patent” that would support standing in a correction of inventorship action. Chou , 254 F.3d at 1359; see also Larson v. Correct Craft, Inc. , 569 F.3d 1319, 1326

– 27 (Fed. Cir. 2009). The question is whether such an assignment to AngioScore occurred here.
Necessary to understanding this dispute is a descri ption of the Consulting Agreement. The C onsulting Agreement contains two provisions material to this a ppeal: § 9(a), which relates to Dr. Lotan’s work before the May 1, 2003, effec tive date; and § 9(b), which relates to Dr. Lotan’s work after the effective date. The Consulting Agreement provide s:

9. Inventions
(a) Inventions Retained and Licensed . Consul tant has attached hereto, as part of Exhibit C , a list describing all inventions, original works of a uthorship, developments, improvements, and trade secrets which were made by Consultant prior to the date of this Agreement (collectively referred to as “ Prior Inventions ”), that belong solely to Co n-TRIREME MEDICAL
, LLC v. ANGIOSCORE
, INC

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sultant or belong to Consultant jointly with a nother and that relate to any of the Company’s cu rrent or proposed businesses, products or research and development; or if no such list is attached, Consultant represents that there are no such Pr ior Inventions. If, in the course of providing the Services, Consultant incorporates into a Company product, process or machine or into any Invention (as defined below), a Prior Invention owned by Consultant or in which Consultant has an inte rest, the Company is hereby granted and shall have a non

- exclusive license (with the right to sublicense) to make, have made, copy, modify, make derivative works of, use, sell and otherwise distribute such Prior Inventions as part of or in connection with such product, process, machine or Invention.
(b) Assignment of Inventions. Consultant agrees to promptly disclose to the Company and hereby assigns to the Company, or its designee, all right, title and interest in and to all inventions , original works of authorship, developments , concepts, know

- how, improvements or trade secre ts, whet her or not patentable, that Consultant may solely or jointly conceive or develop or reduce to practice during the term of this Agreement that relate to the Services (collectively referred to as “ Inve ntions ”).

J.A. 310 (underlining in § 9(b) other than final “Inve ntions” added )

. AngioScore’s theory under § 9(a) is that § 9(a) r equired Dr. Lotan to attach a list of any “Prior Inventions” made before May 1, 2003, in Exhibit C of the Consulting Agreement. Id. He did not list any such inventio ns in Exhibit C . The Consulting Agreement provides thatTRIREME MEDICAL
, LLC v. ANGIOSCORE
, INC

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failure to attach a list amounts to a representation that there are “no such Prior Inventions.” Id. The result, AngioScore contends, is that such unlisted inventions belong to AngioScore.
AngioSc ore’s theory under § 9(b) is that § 9(b) governs all inventions, developments, concepts, and improvements relating to Dr. Lotan’s work for AngioScore that Dr. Lotan conceived, developed, or reduced to practice after the effective date, and provides that An gioScore shall be assigned all such inventions. AngioScore contends that it was assigned all of Dr. Lotan’s rights to his inventive contribution because his work relating to that contrib ution continued after May 1, 2003.
We first consider AngioScore’s claim under § 9(a) of the Consulting Agreement. Before the May 1, 2003, effective date, Dr. Lotan performed a single

- day study testing AngioSculpt prototypes in pig arteries. During the study, Dr. Lotan discovered a “clear retention problem” in which th e metal spiral on the surface of the balloon dislodged from the device upon retraction from the pigs’ arteries . J.A. 418. Dr. Lotan suspected that the problem arose because the spiral was only affixed to the balloon at one end

— the other end was “free

- flo ating” to enable the spiral to move in response to the balloon’s expansion and contraction. J.A. 512. After observing this problem, Dr. Lotan contributed to a memorandum summarizing the study, which highlighted the retraction issue and reco mmended that t he una ttached end be better secured. According to Dr. Lotan, during two follow

- up meetings with AngioScore he further recommended that the una ttached end be affixed to the balloon with a polymer tube, which he believed would more securely bond the spiral to the balloon while still allowing the spiral to expand and contract synchronously with the balloon. The later issued AngioScore patents claim a balloon catheter with an attachment structure similar to that allegedly reco m-TRIREME MEDICAL
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, INC

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mended by Dr. Lotan . According to Dr. Lotan , it was not until 2013 that he learned that the AngioScore patents had incorporated his alleged recommendation. Dr. Lotan testified that he did not list his work on the pig study under Exhibit C of the Consulting Agreement because he did not consider it an invention at the time.
AngioScor e argued before the district court that it had acquired all of Dr. Lotan’s interest in the pre

- May 1, 2003, work under § 9(a) of the Consulting Agreement. Ang ioScore contended that Dr. Lotan’s work on the pig study qualifie d under the terms of the Consulting Agreement as

an “invention,” “development,” or “improvement” that related to AngioScore’s business and was made by Dr. Lotan “prior to the date of [the] Agreement.” J.A. 310. Thus, AngioS core argue d , Dr. Lotan was required to list the pig study under Exhibit C of the Consulting Agre ement pursuant to § 9(a), and his failure to do so resulted in an assignment

— not simply a li cense

— of his rights to AngioScore. The district court agreed

, reasoning based on the “purpose” of the Consulting Agreement that § 9(a) “together” with § 9(b) operated to assign Dr. Lotan’s rights in his inventive contribution to AngioScore as a consequence of his failure to list the pig study

. J.A. 13.

C ontrary to the district court’s conclusion, § 9(a) does not provide for assignment of Dr. Lotan’s rights. Califo rnia law, which governs the interpretation of this contract, requires that we construe the Consulting Agreement according to the plain meaning of the language employed if possible

. See Cal. Civ. Code § 1639; Cedars

- Sinai Med. Ctr. v . Shewry , 137 Ca l . App. 4th 964, 9 79

– 80 (2006). Section 9(a) is entitled “Inventions Retained and L icensed,” but nothing in its terms suggests that anything not listed as a “Prior Invention” would not be “retained.” J.A. 310. And it certainly does not provide that inve ntions that are not listed are assigned , rather than l icensed

. Indeed, granting an assignment for any “PriorTRIREME MEDICAL
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Invention” would make little sense, because listed inve ntions under § 9(a) could theoretically encompass ind ependent inventions dating back many years before the start of the Consulting Agreement.
What § 9(a) does , at most, is grant AngioScore a non

exclusive license i n the event that the consulta nt incorp orates a Prior Invention into an AngioScore product during the term of the Consulting Agreement . But such license is not exclusi ve and would not prevent Dr. Lotan from subsequently assigning his rights in those contributions to TriReme

. In short

, the district court erred to the extent it relied on § 9(a) to find that Dr. Lotan assigned his rights to AngioScore

. AngioScore argues, however, that estoppel by co ntract

— codified by § 622 of the Cali fornia Evidence Code

— binds TriReme, as Dr. Lotan’s successor in interest, to Dr. Lotan’s representation under § 9(a) that he had no “Prior Inventions” relevant to AngioSculpt and therefore “owned no rights in any purported ‘development’ or ‘improvement’ of AngioScore’s prototype.” Appellee’s Br. 28. Thi s repr esentation, AngioScore argues, precludes TriReme from now alleging that Dr. Lotan made an inventive contrib ution on which TriReme cou ld base an inventorship claim. This new argument is unavailing. Estoppel by contract does not apply here, because n either Dr. Lotan nor his successor in interest (TriReme) seeks to enforce any rights under the contract. See Gas Appliance Sales Co. v. W.B. Bastian Mfg. Co. , 262 P. 452, 455 (Cal. Dist. Ct. App. 1927); see also Bank of Am. v. Banks , 101 U.S. 240, 247 (18 79); Popplewell v. Stevenson , 176 F.2d 362, 364 (10th Cir. 1949). AngioScore has cited no case that applies estoppel by contract where the cause of action is not founded upon the written instrument itself. Accordingly, estoppel by contract does not bind TriReme in its corre ction of inventorship action here.TRIREME MEDICAL
, LLC v. ANGIOSCORE
, INC

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We next consider AngioScore ’s alternative argument that Dr. Lotan assigned it all rights in his inventive contribution pursuant to § 9(b). The parties dispute the significance of Dr. Lotan’s role in the development of AngioSculpt after th e May 1, 2003, effective date. It is not disputed, however, that all of Dr. Lotan’s work during the term of the Consulting Agreement related to desig ning

, implementing , and analyzing clinical trials, includi ng collecting regulatory data. Section § 9(b) explicitly pr ovides for assignment of all “inventions, original works of authorship, developments, concepts, know

- how, improv ements or trade secrets” that D r. Lotan “conceive[d] or develop[ed] or reduce[d] to practice during the term” of the Consulting Agreement that relate to his work for AngioScore. J.A. 310. AngioScore’s theory under § 9(b) is that Dr. Lotan’s work relating to his inventive contrib ution continued after May 1, 2003, and amounted to b oth “development” and “reduction to practice” within the meaning of § 9(b). Id. Thus, AngioScore contends, all of Dr. Lotan’s rights in his inventive contribution were assigned to AngioScore even if some of his work was performed before May 1, 2003

. Whether Dr. Lotan a ssigned his rights under § 9(b) thus depends on whether Dr. Lotan’s continued work on AngioSculpt after the effective date in fact amounted to “developing

, ” or “redu cing to practice” an “invention,” “development,” or “i mprove ment ” pursua nt to § 9(b). Id. Only if Dr. Lotan’s continued work after May 1, 2003, constituted “develo ping,” or “reducing to practice” would his inventive contr ibution have been assigned to AngioScore under § 9(b) of the Consulting Agreement. Id.

I t is undispute d that while Dr. Lotan no longer worked on the physical design of the catheter after the effective date , he continued “talking” with AngioScore, performing work relating to designing, implementing, and analyzing clinical trials. J.A. 14. The parties dispute theTRIREME MEDICAL
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significance of this clinical trial work , howev er, disagre eing as to whether it amounted to “conceiving,” “develo ping,” or “reducing to practice” an “invention,” “development,” or “improvement” pursuant to § 9(b). Discovery befor e the district court was limited regarding Dr. Lotan’s work after May 1, 2003, and t here was no trial

. Nor did the district court make any findings about this work. The district court merely found that Dr. L otan’ s post

- effective date work on AngioSculpt “might have amounted to” “developing” or “reducing to practice” his recommendations. 1 J.A. 15. W hether this work falls under § 9(b) remains a ques tion of fact that cannot be

re solve d on a motion to dismiss. We remand for the district court to consider whether Dr. Lotan’s continued work on Angio S culpt after the effective date came within the language of § 9(b). 2

REVERSED AND REMANDED

C OSTS Costs to Appellee

.

1 AngioScore inaccurately asserts that “ the district court ruled that Lotan’s work on the catheter after May 1, 2003 constituted such ‘development’ and ‘reduction to practice.’” Appellee’s Br. 14

– 15 (emphasis added)

. In fact, the district court merely found that such work “might have amount ed to” “developing” or “reducing to practice” his recommendations. J.A. 15.

2 Our opinion should not be read as resolving the question of whether (if Dr. Lotan performed work after May 1, 2003, covered by § 9(b)) Dr. Lotan’s pre

- May 1, 2003, work was assigned to AngioScore under § 9(b).