## United States Court of Appeals for the Federal Circuit

2007-1184

AKIRA AKAZAWA and PALM CREST, INC., Plaintiffs-Appellants,

v.

LINK NEW TECHNOLOGY INTERNATIONAL, INC., Defendant-Appellee.

R. Joseph Trojan , Trojan Law Offices, of Beverl y Hills, California, argued for plaintiffs-appellants. Of counsel was Dylan C. Dang

. Michael D. Paul , Gunn & Lee, P.C., of San Antoni o, Texas, argued for defendantappellee. Of counsel was Ted D. Lee . On the brief was Tom S. Chun , Law Office of Tom S. Chun, of Irvine, California. Appealed from: United States District Cour t for the Central Dis trict of California Judge James V. Selna

## United States Court of Appeals for the Federal Circuit

2007-1184

AKIRA AKAZAWA and PALM CREST, INC., Plaintiffs-Appellants,

v. LINK NEW TECHNOLOGY INTERNATIONAL, INC., Defendant-Appellee.

Appeal from the United St ates District Court for the Central District of California in case no. 8:03-CV-01474, Judge James V. Selna.

_______________________ DECIDED: March 31, 2008

_______________________ Before NEWMAN, Circuit Judge , ARCHER, Senior Circuit Judge , and LINN, Circuit Judge

. ARCHER, Senior Circuit Judge

. Akira Akazawa (“Akira” 1 ) and Palm Crest, Inc. (collectively “the appellants”) appeal the United States District Court for the Central District of Ca lifornia’s grant of Link New Technology Internat ional, Inc.’s (“Link”) motion for summary judgment based on lack of standing. Akira Akazawa v. Link New Tech. Int’l , No. SACV 03-1474 (C.D. Cal. Oct. 26, 2006). Because issues of Ja panese intestacy law must be resolved by the district court in order to det ermine whether Akira owned U.S. Patent No. 5,615,716 (“the

1 We refer to the members of the Ak azawa family by their first names to avoid any potential confusion.’716 patent”), and therefor e possessed standing to bring the present suit, we vacate the district court’s grant of summary judgment and remand for further proceedings. I Yasumasa Akazawa (“Yasumasa”) is t he only named inventor on the ‘716 patent, and he owned the ‘716 patent at the time of his death on March 25, 2001. Yasumasa did not have an executed wi ll when he died. Thus, under Japanese law Hitomi Akazawa (“Hitomi”), Yuki Akazawa (“Yuki”), and Fumi Akazawa (“Fumi”), his wife and daughters respectively, are Yasumasa’s only heirs. Yuki and Fumi assigned their interest in the ‘7 16 patent to Hitomi in an “Inheritance Agreem ent.” Hitomi then executed an assignment transferring all ri ghts in the ‘716 patent to Akira. On October 10, 2003, the appellants 2 filed suit against Link alleging infringement of the ‘716 patent. Link moved for summary judgment on the basis that Akira did not have standing to file the infr ingement suit. The district court opined that “Japanese law may determine who the ‘716 patent could be transferred to upon Yasumasa’s death, but the Patent Act determines the manner by which the assignment must be made.” Id. at 5. It concluded that “when Yasumasa died, ti tle to the ‘716 patent was held by his estate until properly assigned in writing by t he legal representative of the estate” and that it was Akira’s burden “t o prove that [a writing tran sferring the ‘716 patent from Yasumasa’s estate to his heirs] exists or that some other chain of title gives Akira ownership of the ‘716 patent.” Id. at 8-9. The district cour t therefore held that Akira had not met his burden and granted Link’s motion for summary judgment. The appellants appeal, and we have jurisdiction under 28 U.S.C. § 1295(a)(1).

2 Appellant Palm Crest, Inc. claims no ownership right in the ‘716 patent.

2007-1184 2II Whether a party has standing to sue is a question of law that we review de novo

. See Prima Tek II, L.L.C. v. A-Roo Co. , 222 F.3d 1372, 1376 (Fed. Cir. 2000). The parties focus on the interplay between 35 U.S.C. § 261 and Japanese law, as they did at the district court. Section 261 states that “[a]pplications for patent, patents, or any interests therei n, shall be assignable in law by an instrument in writing . . . .” 35 U.S.C. § 261. Link argues that this provision mandates a writing where there is a transfer upon death in order for ther e to be a proper assignment between two entities. According to Link, any conflict between United States patent law and Japanese intestacy law must be resolved in favor of Un ited States law, becau se “[f]oreign law has no place in the determination of rights and responsibilities under the [P]atent Act.” Thus, in Link’s view, Akira does not own the ‘716 patent because there was never a writing transferring the ‘716 patent from the estate of Ya sumasa to Hitomi, Yuki, and Fumi, the inheritance agreem ent between mother and daught ers and the assignment between Hitomi and Akira notwithstanding. The appellants, on the other hand, argue that under Japanese intestacy law any property owned by Yasumasa transferred imm ediately to his heirs—Hitomi, Yuki, and Fumi. See Minp ō , art. 882, 887, 890, 896 (Japan), translated in Hiroshi Oda & Sian Stickings, Basic Japanese Laws (1997). 3 In other words, a wr iting transferring the ‘716

3 Japanese Civil Code Article 882 st ates “[s]uccession commences by reason of death.” Id. at art. 882. Article 890 explains that the spouse of the decedent “becomes in every case, a successor. In the case where any person is to become a successor in according with the provisions of Articles 887 [identifying a decedent’s child as a successor] and 889 [(not relevant to this case)] the spouse shall rank equally with such person.” Id. at art. 890. Finally, Article 896 states “[a] successor succeeds, as

2007-1184 3patent from Yasumasa’s estate to Hitomi, Yuki, and Fumi was not needed, because by operation of Japanese law, Hitomi, Yuki, and Fumi owned the ‘716 patent immediately upon Yasumasa’s death. I ndeed, under the appellants’ ar gument, any such writing purporting to transfer the ‘716 patent from Yasumasa’s esta te would be a nullity, because the estate never owned the patent. We conclude that the district court’s focu s solely on section 261 was erroneous. Section 154 of Title 35 states that “[e]very patent shall contain a short title of the invention and a grant to the patentee, his heirs or assigns , of the right to exclude others from making, using, offering for sale, or se lling the invention throughout the United States . . . .” 35 U.S.C. § 154(a)(1) (emphasis added). As both parties note, patent ownership may be transferred by assignm ent, and section 261 addresses such a transfer—requiring assignments to be in writing. See 35 U.S.C. § 261. However, there is nothing that limits assignm ent as the only means for transferring patent ownership. Indeed, the case law illustrates that ownersh ip of a patent may be changed by operation of law. Of particular relevance to the present case is H.M. Stickle v. Heublein, Inc. , 716 F.2d 1550 (Fed. Cir. 1983). In t hat case, the alleged infri nger argued that the case should have been dismissed for the plaintiff’s failure to establish that the named parties owned the entire right, title, and in terest in the patents at iss ue. The district court was not moved by the infringer’s argument, conc luding that under Texas law title to the patents passed to the patent owner’s heirs, t he plaintiffs, upon his death. We agreed, noting that at the time of Stickle’s (the patent owner) deat h Texas law provided that

from time of the commencement of the succe ssion, to all the right s and duties pertaining to the estate of the [decedent] except as such are entirely personal.” Id. at art. 896.

2007-1184 4“’[w]hen a person dies, leaving a lawful will, all of his estate . . . bequeathed by such will

. . . shall vest immediately in the . . . legatees of such estate . . . .’” Id. at 1558 (quoting V.A.T.S. Probate Code, § 37). 4 While the district cour t correctly observed that Stickle does not absolutely resolve the question at hand because it involves a written will that could fulfill the § 261 requirement, the ca se nonetheless supports the more relevant proposition that patent title may be trans ferred according to state probate law. See also Winkler v. Studebaker Bros. Mfg. Co. , 105 F. 190-91 (C.C. S.D.N.Y. 1900) (stating “[u]nder the Indiana law, if there be no debts and no adminis tration, personal property vests by operation of law in the next of kin. [c itations omitted] This patent . . . was not administered and passed by operation of law to those legally entitled to it . . . .”). The district court relied primarily on the language of the statute—making the implicit, but unsupported, assumption that intestate succession is an “assignment”—and on two 19th-century cases: Shaw Relief Valve Co. v. City of New Bedford , 19 F. 753,

4 V.A.T.S. Probate Code, § 37 states: When a person dies, leaving a lawful will, all of his estate devised or bequeathed by such will, and all powers of appoin tment granted in such will, shall vest immediatel y in the devisees or legat ees of such estate and the donees of such powers; and all the estate of such person, not devised or bequeathed, shall vest immediately in his heirs at law; subject, however, to the payment of the debts of the testator or intestate, except such as is exempted by law, and subj ect to the payment of court-ordered child support payments that are del inquent on the date of the person's death; and whenever a person dies intest ate, all of his estate shall vest immediately in his heirs at law, but with the except ion aforesaid shall still be liable and subject in their hands to the payment of the debts of the intestate and the delinq uent child support payments; but upon the issuance of letters testamentary or of administration upon any such estate, the executor or administr ator shall have the right to possession of the estate as it existed at the death of the testator or in testate, with the exception aforesaid; and he shall recover possession of and hold such estate in trust to be disposed of in accordance with the law.

2007-1184 5755 (C.C.D. Mass. 1884) and Bradley v. Dull , 19 F. 913 (C.C.W.D. Pa. 1884) (which simply apples Shaw ). Those cases are neither binding on us nor helpful in the analysis. Shaw Relief Valve considered an 1870 amendment to the patent statutes that deleted the words “executors and administrators” from a section granting a patent to the patentee, “his heirs and assi gns.” 19 F. at 754. The Shaw court held that the omission of the phrase “executors and administrators” di d not alter the ordinary rule that a patent, like any personal property, “fo llows the ordinary course, and goes to the executor or administrator in trust for the next of kin.” Id. The court thus rejected the defendant’s argument that a grant of title to the plaintiff by the adminis trator was invalid because the language of the patent statutes preempted ordinary probate law. Id. This has little bearing on the question at hand; it does not stand for the proposition that patent rights vest in an executor at death and until assigned in writing, but if an ything supports the proposition that the question of when and to whom title is transferred is determined by state law. Our case law is clear that state law, not federal law, typically governs patent ownership. See Jim Arnold Corp. v. Hydrotech Sys., Inc. , 109 F.3d 1567, 1572 (Fed. Cir. 1997) (stating “the question of who owns the patent rights and on what terms typically is a question exclusively for state courts”). Accordingly, we have looked to state law when determining ownership of the patent following a patent owner’s death. Applying this principle to the present ca se would require looking to foreign law, as opposed to state law, to determine ownership of the ‘716 patent—because Yasumasa was a resident of Japan at the ti me of his death. We addressed a similar issue in International Nutrition Co . v. Horphag Research Ltd. , 257 F.3d 1324 (Fed. Cir.

2007-1184 62001). In that case, a party argued that ownersh ip of a United States patent is a matter of United States patent law and that granting comity based on a determination of ownership under French law w ould be contrary to United States patent law. Id. at 1329. After noting that patent ownership is typically a question of state law, not federal law, we explained that “[a] contractual agreement to apply French law as to ownership is just as valid as an agreement to apply t he law of a particular state.” Id. We discerned no conflict between United States pat ent law and enforcing the int entions of the parties that the contract be interpreted under the laws of a foreign country. Similarly, we see no r eason Japanese law should not control ownership of the ‘716 patent here. Indeed, the di strict court seems to agree with this principle, stating “Japanese law may determine who the ‘716 pate nt could be transferred to upon Yasumasa’s death . . . .” Akazawa , No. SAVC 03-1474, slip op. at 5. Thus, interpreting Japanese intestacy law, not Unit ed States patent law, is the first step in determining whether Akira possessed standing to bring the present suit. The evidence provided to us, specifically the translation of Japanese intestacy law, suggests that at the time of Yasu masa’s death Hitomi, Yuki, and Fumi became owners of the ‘716 patent. W hether an administrator is r equired under Japanese law in this case, the role of such an adminis trator, and whether the existence of an administrator would affect the transfer of the patent to Yasumasa’s heirs is less clear. See id. at 8-9 (stating that the district court offers “no opinion as to who the legal representative of Yasumasa’s estate wa s or is under Japanes e law, and need not decide the issue”). These issues are best decided by the district court in the first instance. See Merck & Co., Inc. v. U. S. Int’l. Trade Comm’n , 774 F.2d 483, 488 (Fed.

2007-1184 72007-1184 8 Cir. 1985) (holding that under Federal Rule of Civil Procedure 44. 1 determinations of foreign law are matters for the district court in the first instance). If the district court concludes that the ‘716 patent was transferre d to Hitomi, Yuki, and Fumi upon Yasumasa’s deat h, then the subsequent transfers between Yuki, Fumi, Hitomi, and Akira conveyed owner ship of the ‘716 patent to Akira. If, however, the district court concludes that under Japanese law the ‘716 patent wa s transferred to the estate of Yasumasa which then fell under the control of an administrator or executor, a written assignment in accordance with § 2 61 may then be necessary to convey the patent from the estate to Yasumasa’s heirs. III Issues of the interpretation of Japanese in testacy law must be decided in order to resolve this case. We vaca te and remand so the district court can address these issues in the first instance. VACATED and REMANDED

COSTS No costs.