## United States Court of Appeals for the Federal Circuit

04-1395

CHECKPOINT SYSTEMS, INC., Plaintiff-Appellant,

v.

ALL-TAG SECURITY S.A. and ALL- TAG SECURITY AMERICAS, INC., Defendants-Appellees, and SENSORMATIC ELECTRONICS CORPORATION, Defendant-Appellee.

Dennis R. Suplee , Schnader Harrison Segal & Le wis LLP, of Philadelphia, Pennsylvania, argued for plaintiff-appel lant. With him on the brief were Nancy Winkelman , Robert A. McKinley and Thomas W. Hazlett

. Theodore A. Breiner , Breiner & Breiner, L.L.C., of Al exandria, Virginia, argued for defendants-appellees All-Tag Secu rity S.A., et al. With him on the brief was Jennifer A. Pulsinelli

. Christopher K. Hu , Morgan & Finnegan, L.L.P., of New York, New York, argued for defendant-appellee Sensormatic Electronics Co rporation. With him on the brief was Herbert Blecker . Of counsel were Richard W. Erwine and Richard Martinelli

. Appealed from: United States District Cour t for the Eastern District of Pennsylvania Judge Petrese B. Tucker

## United States Court of Appeals for the Federal Circuit

04-1395 CHECKPOINT SYSTEMS, INC., Plaintiff-Appellant,

v. ALL-TAG SECURITY S.A. and ALL- TAG SECURITY AMERICAS, INC., Defendants-Appellees, and SENSORMATIC ELECTRONICS CORPORATION, Defendant-Appellee.

__________________________ DECIDED: June 20, 2005

__________________________

Before MICHEL, Chief Judge , SCHALL, and DYK, Circuit Judges

. SCHALL, Circuit Judge

. This appeal arises out of a suit for patent infringement. Checkp oint Systems, Inc. (“Checkpoint”) is the owner of United States Patent No. 4,876,555 (“the ’555 patent”). Checkpoint sued All-Tag Security, S.A. (Bel gium) and All-Tag Security Americas, Inc. (collectively, “All-Tag”), as well as Senso rmatic Electronics Corpor ation (“Sensormatic”), for infringement of the ’555 patent. On Ap ril 22, 2004, the di strict court granted summary judgment in favor of All-Tag and Sensormatic on the ground that the ’555patent is invalid because it incor r ectly lists Paul R. Jorgenson as th e sole inventor in violation of 35 U.S.C. § 102(f). Checkpoint Sys., Inc. v. All-Tag Sec. S.A. , 315 F. Supp. 2d 660 (E.D. Pa. 2004). In granting summary judgment in favor of All-Tag and Sensormatic, the court relied upon the 2002 dec larations of Jorgenson, Franz H. Pichl, and Lukas A. Geiges stating: (i ) that Jorgenson was not the so le inventor of the subject matter claimed in the ’555 patent ; (ii) that Jorgens on and Pichl were joint inventors; and (iii) that Pichl’s nam e was intent iona lly not inclu ded o n App lic ation Serial No. 168,46 8 (“the ’468 applic ation”), the application whic h matured into the ’555 patent. Checkpoint now appeals the dec ision of the district court. It argues, inter alia , that the declarations of Jorgenson, Pichl, and Geiges , filed in 1988 during prosecution of the ’468 applicatio n and stating that Jor genson wa s the sole inv entor of the subjec t matter claimed in the application, create a genuine issue of ma terial fact on t he issue of inventorship. As a result, Checkpoint cont ends, the district court erred as a matter of law in granting summary judgment of invalid ity. We agree with Check p oint that the 1988 declarations of Jorgenson, Pichl, and Gieges cr eate a genuine issue of material fact on the issue of inventor ship. Accordingly, we re verse the grant of summary judgment in favor of All-Tag and Sensormati c and remand the case to the district court for further proceedings consis tent with this opinion. BACKGROUND
I. Checkpoint is a Pennsylvania corporati on. Among other things , it manufactures and sells disposable, deactivat able reson ance labels for the retail industry. A resonance label is a device that is attac hed to merchandise in dep artment stores and

04-1395 2other outlets in order to prevent theft of the merchandise. The ’ 555 pate nt claims a resonance label and a method of making it. All-Tag m anufactures and sells resonance labels accused of infringing the ’555 patent. Sens ormatic purchases accused products from All-Tag. The events leading up to t he issuance of the ’555 patent are relevant to the is sue before us. In the 1980s, Che ckpoint contracted to supply resonance labels to a Swiss corporation called Act r on. 1 At that time, Franz Pichl was a managing director and an owner of Actron. In 1985, Pic h l hired Luk a s Geiges to work for Actron. The supp ly contract between Checkpoint and Actron terminated in November of 1986. Pichl also was a part owner of another Swiss company, Durgo AG (“Durgo”). Durgo was purportedly formed to supply res onance labels to Actron. In 1987, Durgo filed a patent application for a resonanc e label in the Swiss Pat ent Office. Subsequently, in 1988, the ’ 468 application, that would issue as the ’555 patent, was filed with the U.S. Patent and Trademark Office (“PTO”), clai ming priority to the Swiss application. The ’468 applicat ion was assigned to Durgo and named Paul Jor gensen a s the sole inventor. Jorgens en is an independent technical consultant who has provided services to, among others, Du rgo, Actron, and All-Tag. During prosecution of the ’468 applicat ion, Jorgensen filed a small entity declaration. A small entity declaration, see 37 C.F.R. § 1.27, enti tles the assignee to qualify for reduced PT O fees, see 35 U.S.C. § 41(h). In hi s dec laration dated March 11, 1988, Jorgenson identified himself as an independent inventor, stating:

1 Actron was originally named “Checkpoi nt Europe.” Despite the similarity of their names, Checkpoint Eur ope and Checkpoi nt were unrelated. For simplic ity, we refer to the Checkpoint Eur ope/Actron entity as “Actron.”

04-1395 3As below named inv entor, I hereby declare that I qualify as an independent inventor as defined in 37 CF R 1.9(c) for purposes of paying reduced fees under 35 USC 41( a) & (b) to the U.S. Patent Office[.] Pichl, and Geiges, who was as sociated wit h Pichl at Durgo, filed a joint small entity declaration with the PT O in connec tion with the prosecution of the ’468 application. In their declaration, also da ted March 11, 1988, they stated as follows in connection with Durgo’s rights as assignee from Jorgenson: I hereby declare that rights under contract or law have been conveyed t o and remain with the small business concern identif i ed above with regard to the invent ion entitled Resonanc e Labe l by inventor Paul Richter Jorgenson[.] Finally, the Jorgenson declaration and the Pichl and Geiges declaration both contained the following additional statement: I hereby declare that all stat ements made herein of my own knowledge are true and that all statements made on information and belief are believed to be true; and further t hat these statements were made with knowl edge that willful false statements and the like so made ar e punishable by fine or imprisonment, or both, under 18 USC 1001, and that such willful false statem ents may jeopardize the validity of the patent application, any patent issuing thereon, or any patent to which this veri fied statement is directed. In January of 1989, Actron acquired Durgo. When it did so, it also ac quired Durgo’s rights in the ’468 applic ation. The ’555 patent issued on October 24, 1989. Thereafter, in November of 1995, Checkpoint acquir ed Actron. It thus became the owner of the ’555 patent. In February of 1989, after Actron had acquired Durgo, Pichl ended his relationship with the c o mpany, and in 1991 he formed All-Tag. Pic h l left All-T ag in 1997 and apparently no longer has an employm ent relationship with the company. Geige s continued t o work at Actron until November of 1993. In approximately April of 1994,

04-1395 4Checkpoint hired Geiges to manage its patent portfolio. Geiges remained with Checkpoint until 1998.
II. In May of 2001, Checkpoint brought suit against All-T ag and Sensormatic in the Eastern District of Pennsylvania for infri ngement of the ’555 paten t. Eventually, All-Tag moved for summary judgment that the ’555 pat ent is invalid under 35 U.S.C. § 102(f) for failure to properly list all inventors. 2 It argued that the patent inco rrectly lists Jorgenso n as the sole inventor, when in fact Jorgensen and Pic h l were co -inventors. In support of the motion, All-Tag proffered dec larations fr om Jorgensen, Pichl, and Geiges, each of which was prepared in 2002 for the litigation. In his declaration, Jorgensen stated that the resonance label t hat is the subject of the ’555 patent “was ba sed on the concepts and work developed by both Mr. Pichl and me.” In a lik e vein, Pic h l stated: “The resonance label disc losed in the ’555 patent was bas ed on a concept developed jointly by Paul Jorgenson and me.” Pichl added that he intentionally omitted himself as a coinventor in the U.S. patent applic ation “to avoid any lat e r argument by Chec kpoint that it was entitled to ownership of the invention by contract, by virtue of the affiliation with [Actron] and the relationship between [ A ctr on] and Checkpoint.” Likewise, in his declaration, Geiges stated: Contrary to the indication on the ’555 patent , Mr. Jorgensen was not the sole invent or of this s ubject matter . We int entionally did not inc l ude Mr. Pichl’s name on the [patent app licatio n] file d in th e United States because of our competitive relationship with [Checkpoint]. We were concerned that [Checkpoint] might try and claim owner ship in the technology based on [Actron’s] a nd Mr. Pichl’s prior supply agreement with [Checkpoint].

2 All-Tag filed the motion for summary judgment, which Sensormatic later joined.

04-1395 5Checkpoint opposed t he summary judgment motion on several grounds. F i rst, it argued that, under the doctrine of assignor estoppel, All-T ag was barred from challenging the patent’s va lidity. Second, Checkpoint argued that the evidenc e embodied in the 2002 Jorgens on, Pichl, and Geiges decla rations was not sufficiently corroborated to meet the burden of clear and convincing evidence nec essary to invalidate the patent. Third, in a suppl emental response to defendants ’ motion, Checkpoint argued that there wa s a genuine issue of material fact on the inventorship issue. Checkpoint did not file any co ntemporaneous affidavits or declarations in response t o the 2002 Jorgensen , Pichl, and Geiges declarat ions. However, it argued that the original PTO declarations of Jorg ensen, Pichl, and Geiges contradicted their 2002 litigation declarations and c r eated a fact issue regar ding whether Jorgensen was the sole inv entor. In ruling on the motions for summary j udgment, the district court first addressed whether defendants were est opped from cha llenging the ’555 patent’s validity. Determining that Sensormati c was not barred by assignor estoppel, the c o urt granted Sensormatic’s motion for summa ry judgment. In doing s o , the district co urt did not address whether the cont radiction between t he original PTO declarations and the 2002 declarations created a genuine iss ue of material fact. Rat her, presumably referring to the 2002 declarations, the cour t stated that “[t]he undisput ed evidence, Pichl’s and Jorgensen’s affidavits, clearly shows that th e ’555 patent was jointly invented by Pichl and Jorgensen.” Checkpoint , 315 F. Supp. 2d at 665. Stat ing that “[i]f the patent is invalid to o ne, it is inv a lid to all,” the court also grante d All-Tag’s motion for summary judgment of in validity. Id. at 666.

04-1395 6Checkpoint has timely appealed from the fi nal judgment of the di strict court. We have jurisdiction pursuant to 28 U

. S.C. § 1295(a)(1). DISCUSSI ON We review the district court’s gr ant of s u mmary judgment de novo. See Caterpillar Inc. v. Sturman Indus. , 387 F.3d 1358, 1373 (Fed. Cir. 2004). Summary judgment is appropriate “if t he pleadings, depositions , answers to interrogatories, and admissions on file, together with the affidavits , if any, show that there is no genuin e issue as to any material fact and that the moving party is entitled to a judgment as a matter of l a w.” Fed. R. Civ. P. 56(c). “The evidence of the non-movant is to be believed, and all justifiable inferenc es are to be drawn in his favor.” Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255 (1986).
I. Before examining the propriety of the di strict court’s grant of summary judgment, we addres s two preliminary ar guments that Check point raises on appeal. First, Checkpoint argues that assignor estoppel bars All-Tag from challenging the validity of the ’555 patent. 3 The doctrine of assignor estoppel prevents a party that assigns a patent to another from late r challenging the v a lidity of the a ssigned patent. Westinghouse Elec. & Mfg. Co. v. Formica Insulation Co. , 266 U.S. 342, 349 (1924); Mentor Graphics Corp. v. Quickturn Des i gn Sys. , 150 F.3d 1374, 1377 (Fed. Cir. 1998)

. Parties in privity with the assignor are also barred fr om challenging validity. Id. Privity may be establis hed where there is a close rela tions hip among the relev ant parties, such as where “the ultimate infringer availed itse lf of the inventor’s knowledge and assistance

3 Checkpoint does not make this argument as to Sensormatic.

04-1395 7to conduct infringement.” Intel Corp. v. United States Int’l Trade Comm’n , 946 F.2d 821, 839 (Fed. Cir. 1991) (citations omitted). The doctrin e “p revents the unfairness and injustice of permitting a party to s e ll s o mething and later to assert t hat what was so ld is worthless.” Id. (citation omitted). Application of the doctrine is a matter requiring a “balancing of the equit ies” and is within the “sound discr etion” of the trial c ourt. See Carroll Touch, Inc. v. Electro Mech. Sys. , 15 F.3d 1573, 1579 (Fed. Cir. 1993). Checkpoint contends that assignor esto ppel applies to All- T a g. Check p oint recognizes that All-Tag is not an assignor of the ’555 pat ent. It urges, however, that All-Tag’s relationship with Jorgenson brings t he doctrine into play. Checkpoint reason s that Jorgenson’s relationship with Pichl, and his work on behalf of All-Tag, create privity. The district court did not ru le on whether as signor estoppel applies to All-Tag becaus e , having determined that: (1) Sensormatic was not barred from challenging the ’555 patent; and (2) the ’555 patent was invalid, the court ruled that if a patent is “invalid to one, it is invalid to all.” 315 F. Supp. 2d at 665-66. In light of our r e versal of t h e grant of summary judgment of invalidity, see infra Part II, the issue of whether All-T ag is barred by assignor estoppel from c hallenging the validity of the ’555 patent is onc e again on the table. Howev e r, we decline to rule on whether All-Tag is est opped from challenging the validity of the ’555 patent. We leave this issue to the district court in the first instance on remand. Checkpoint also argues that, in any ev ent, J o rgenson, Pichl, and Geiges should not be allowed to testify to the invalidity of the ’555 pat ent, and that no party should be able to rely upon their declarations or live t e stimony to inv a lidate the patent. In sup p or t of its argument, Checkpoint cites several district court decisions, e.g. , Total

04-1395 8Containment, Inc

. v. Buffa lo En vtl. Prods. Corp. , 35 U.S.P.Q.2d (BNA) 1385 (E.D. Va. 1995), holding that a party not barred by as signor estoppel never theless was precluded from using the testimony of an inventor-assignor to present its challenge to the validity of the patent. We are not persuaded by Check point’s argument. We thin k it would be unwise to fashion an across-the-board rule barring testimony of the kind contained in the 2002 Jorgenson, Pichl, and Geiges declarations. A party, such as Sensormatic, that is not barred by assignor estoppel from challenging the validity of the patent, should be able to at least proffer all otherwise admissible evidence in s u pport of its case. Moreover, we hold in Part II, infra , that because there is a genuine iss ue of material fact on th e inventorship issue, the district court erred i n granting summary judgment in favor of AllTag and Sensormatic. If All-Tag and Sensorma tic continue to c hallenge the validity of the ’555 patent on inventorship grounds and the case goes to trial, counsel for Checkpo i nt will h a ve the opportunity to cross- examin e one or more of Jorgenson, Pichl, or Geiges and to s e ek to impeach them. F u rther, the corroboration rule, dis c ussed infra in Part III, i s available in appr opriate cases to protect patent ees from invalidation of their patent bas ed solely upon unc orrobor ated, testimonial evidenc e. Checkpoint will be free to argue that the corroboration r u le applies in this cas e and that the Jorgen son, Pichl, and Geiges testimony i s in sufficient under the rule. Having addressed Checkpoint’s prelimi nary arguments, we turn now to the main issue on appeal.

04-1395 9II. “A person shall be entitled to a patent unl ess . . . he did not himself invent the subject matter sought to be patent ed.” 35 U.S.C. § 102 (f) ( 2000). We have stated that “[s]ince the word ‘he’ refers to the specific inventive e n tity named on the patent, this subsection mandates that a patent accurately list the correct inventors of the claimed invention.” Pannu v

. Iolab Corp. , 155 F.3d 1344, 1349 (Fed. Cir. 1998) (citations omitted). Inventorship is a question of law with underlying factual issues. See, e.g. , Bd. of Educ. v. Am. Biosc i ence , 333 F.3d 1330, 1337 (Fed. Cir. 2003) . “If nonjoinder of an actual inventor is proved by c l ear and c onvinc i ng evidenc e, a patent is rendered invalid.” Pannu , 155 F.3d at 1349 (citations omitted) . Howev e r, “[i]f a patentee can demonstrate that inventorship can be corrected as pr ovided by [35 U.S.C. § 256], a district court must order correction of t he patent, thus saving it from being rendered invalid.” Id. at 1350. Checkpoint ’s primary cont ention before us is that t he district court erred in granting summary judgment in favor of defe ndants bec ause, in view of the declaration s submitted by Jorgens en, Pic h l, and Geiges to the PTO during prosec ution of the ’555 patent, there is a genui ne issue of material fact on the question of whether Pichl was a co-inventor with Jorgensen. All-Tag and Sensormatic, on the other hand, argue that ther e are no disputed facts. They urge that the 2002 declarations of Jorgensen, Pi chl, and Geiges “explain” why their declarations to the PTO during pr osecution of the ’555 patent listed only Jorgensen as the sole inventor. Accordin g to All-Tag and Sensormatic, because the 2002 declarations “admit” that the original PTO declarations wer e “false,” and beca us e

04-1395 10Checkpoint offered no rebuttal to this “exp lanation,” they are entitled to summary judgment. We agree with Check point t hat the grant of summary j udgment in favor of All-Tag and Sensormatic was improper. The matter c an be put simply: defendants proffer the 2002 declarations which state t hat Jorgens en and Pic h l are c o -inventors. Checkpoint proffers the original PTO declarations whic h recite Jorgensen as the sole inventor. Thus, there is flatly c ontradictory evidenc e re lating to the matter critical for determining whether the ’555 patent is in valid under 35 U.S.C. § 102(f). Defendants argue that we have no choice but to accept the explanation offered by Jorgens en, Pichl, and Geiges in their 2 002 dec larations. However, to do so would be to accept as true testimony proffered by the movant for summary judgment, when it is elementary that on summary judgment all evidence and infe rences are to be drawn in the non-movant’s favor. See, e.g. , And e rson , 477 U.S. at 255. In their 2002 declarations, Jorgensen, Geiges , and Pichl claim that they lied to the PTO because they

were conc erned that Checkpoint would clai m ownership of the ’5 55 patent based upon the fact that Check point had supplied resonanc e labels t o Actron during their contractual relationship. Howev e r, the ex planation proffered in the 2002 declarations for the declarations before the PTO does not negate the contradictory evidence in the 1988 declarations that Jorgensen was the s o le inventor of the resonance label claimed in the ’555 patent. In short, it is clear that t here is a genuine iss u e of material fact as to whether Jorgenson was the sole inventor of the resonance label claimed in the ’555 patent or whether Jor genson and Pichl were joint invent ors of the resonance label. For this reason, the district court’s grant of summary judgment was improper and must be

04-1395 11reversed. If All-Tag and Sens ormatic continue to maintain that the ’555 pat ent is invalid under section 102(f), at trial t hey will have t he opportunity to call Jorgenson, Pichl, and Geiges as witnesses in their effort to establis h that Jorgenson and Pic h l were coinventors. In that event, counsel for Ch eckpoint will have th e opportunity to crossexamine them.
III. Checkpoint also argues that, regardless of whether the original PT O declarations create a genuine iss ue of material fact, th e three 2002 declarat ions cannot make out a prima facie showing of inva lidity under 35 U.S.C. § 102(f) by clear a n d convinc i ng evidenc e because they are not sufficiently corroborated. “The law has long looked with disfavor upon invalidating patents on the basis of mere testi m onial ev idence abs ent other evi denc e that corroborates that testimony.” Finnigan Corp. v. United St ates Int’l Trade Comm’n , 180 F.3d 1354, 1366 (Fed. Cir. 1999). Thus, “[t]he Supreme Court rec ognized over one hundr ed years ago that testimony concerning invalid ating activ i ties can be ‘unsatisfactory’ due to ‘the forgetfulness of witnesses, thei r liability to mistakes, their proneness to recollect things as the party calling them woul d have them recollect them, as ide from the te mptation to actual perjury.’” Id. (quoting The Barbed- Wire Patent , 143 U.S. 275, 284 (1892)). This “rule of reason” standard requiring corroborating evidenc e extends to claims by indiv i duals purporting to be co-inventors. See Ethicon, Inc. v. U. S. Surgical Corp. , 135 F.3d 1456, 1464 (Fed. Cir. 1998). Physical, documentary, or circumstantial evidenc e, or reliable testimony from i ndividuals other than the alleg ed inventor or an interested

04-1395 12party, may corroborate. See Sandt Tech., Ltd. v. Resco Metal & Plastics Corp. , 264 F.3d 1344, 1350-51 (Fed. Cir. 2001); Ethicon , 135 F.3d at 1461. As we hav e held in Part II, supra , summary judgment was improper becaus e of the existence of a genuine i ssue of material fact. F o r that reason, and because the district court has yet to rule on Checkpoint ’s motion f o r further discovery (which may shed light on Jorgens on’s, Pic h l’s, and Geiges’ po tential interests in the ca se), we do not think it is appropriate for us to decide t he corroboration issue in the first instance. That said, if All-Tag and Sensor matic cont inue to maintain that the ’555 patent is invalid under section 102(f), not hing in this opinion shoul d be c o nstrued as precluding Checkpoint from renewing its corroboration argument at the appr opriate tim e . All-Tag and Sensormatic are seeking to invalidat e an issued patent based upon testimonial evidenc e. That evidence comes from thre e individu als (two purported co-inventors and a third party) who now dec la re under penalty of perjury that the dec larations they submitted to the PT O in 1988, also under penalty of perjury, were false. The unresolved question is whether J o rgenson, Pichl, and Geiges lied to the PT O in 1988 or whether they are lyin g to the courts now. If it becomes neces sary, it will be for the district court in the first instance to apply the corroboration rule to the facts of this case.
IV. Finally, Checkpoint assigns e rror to the district court’s tr eatment of 35 U.S.C. § 256. Section 256 provides, in pertinent par t, that “[w]henever . . . through error an inventor is not named in an issued patent and such error arose without any deceptiv e intention on his part, the Direc tor may, on application of al l the parties and assignees , with proof of the facts and such other requirement s as may be imposed, issue a

04-1395 13certificate correcting such error.” The distri ct court ruled that th e ’555 patent could not be corrected under section 256 because the purported inventorship error was with deceptive intent. Checkpoint , 315 F. Supp. 2d at 665. In light of our reversal of summary j udgment, the patent is no longer invalid for failure to properly name all inv e ntors. Th us the issue of wheth e r the patent may be corrected is obvious ly not before us. We simply note what we stated in P annu : “When a party as serts invalidity under § 102(f) due to nonjoinder, a dis t rict court should first determine whether there exists clear and convinc i ng proof that the a lle ged unnamed inventor was in fact a co-invent or.” Pannu , 155 F.3d at 1350. Then, “[u]pon such a finding of incorrect inventorship, a patentee ma y invoke section 256 to save the patent from invalidity.” Thus , after it is determined that a patent’s inventorsh ip is inc o rrect, “the patentee must then be given an opportunity to correct inventorship pursuant to that section.” Id. At this point, we think that it w ould be premature for us to opine on an issue that may not ari s e. CONCLUS ION For the foregoing reasons, we reverse the grant of summary judgment in favor of All-Tag and Sensorm a tic that the ’555 pat ent is invalid under 35 U.S.C. § 102(f). The
case is remanded to the district court fo r further proceedings consistent with th is opinion.
R E VER SED and RE MANDE D

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