## United States Court of Appeals for the Federal Circuit

2008-1170 THE EUCLID CHEMICAL COMPANY,Plaintiff/Counterclaim DefendantAppellant,

v. VECTOR CORROSION TECHNOLOGIES, INC., Defendant-Appellee, and DAVID WHITMORE, Defendant/Counterclaimant-Appellee, and VECTOR CORROSION TECHNOLOGIES, LTD., Counterclaimant-Appellee.

Thomas H. Shunk , Baker & Hostetler LLP, of Cleveland, Ohio, argued for plaintiff/counterclaim def endant-appellant. With him on the brief was Jude A. Fry , Fay Sharpe LLP, of Cleveland, Ohio. Brewster B. Taylor , Stites & Harbison, PLLC, of Alexandria, Virginia, argued for defendant-appellee and defendant/c ounterclaimant-appellee. With him on the brief were Robert E. Scully, Jr. and Emily H. Smith

. Appealed from: United States District C ourt for the Northern District of Ohio Judge Christopher A. Boyko

## United States Court of Appeals for the Federal Circuit

2008-1170 THE EUCLID CHEMICAL COMPANY,Plaintiff/Counterclaim DefendantAppellant,

v. VECTOR CORROSION TECHNOLOGIES, INC., Defendant-Appellee, and DAVID WHITMORE,Defendant/CounterclaimantAppellee, and VECTOR CORROSION TECHNOLOGIES, LTD., Counterclaimant-Appellee.

Appeal from the United States Dis trict Court for the Northern District of Ohio in case no. 1:05-CV-080, Judge Christopher A. Boyko.

__________________________ DECIDED: April 1, 2009

__________________________ Before NEWMAN, LOURIE, and LINN, Circuit Judges

. Opinion for the court filed by Circuit Judge LINN. Opinion concurring in part and dissenting in part filed by Circuit Judge NEWMAN. LINN, Circuit Judge

.This case involves a dispute over ownersh ip of a United States Patent. Euclid Chemical Company (“Euclid”) brought a declar atory judgment action concerning patents purportedly owned by Vector Corrosi on Technologies, Inc. (“Vector”). Euclid Chem. Co. v. Vector Corrosion Techs., Inc. , No. 1:05-CV-080 (N.D. Ohio De c. 14, 2007), slip op. at 1. Vector counterclaimed for infringement a nd moved for partial summary judgment that it owned by assignment one of the patents-in-suit—U.S. Pa tent No. 6,217,742 (the “’742 patent”)—based on a Dece mber 20, 2001 agreement (the “Assignment”). Id. at 2. The district court concluded t hat the Assignment unam biguously transferred the ’742 patent to Vector, and it therefore granted Vector’s motion. Id. at 6. The district court also held that the parties had either settled or abando ned all remaining claims , including Euclid’s claim that it was a bona fide purc haser for value of the ’742 patent. Id. at 8. Euclid appeals both aspects of the di strict court’s judgment. We conclude that the Assignment was ambiguous, and that the district court therefore erred by granting Vector’s motion for partial summary judgment without considering extrinsic evidence of the parties’ intent. Likewise, we conclude that the district court abused its discretion by dismissing Euclid’s bona fide purchaser claim on the ground that Euclid had abandoned it. We therefore vacate and remand. I. BACKGROUND Euclid’s declaratory judgment action originally concer ned six patents. In the first five counts of its complaint, Euclid alleged t hat it was entitled to a declaratory judgment of noninfringement and/or invali dity with respect to five patents, each of which Euclid alleged was exclusively licensed to Vector. See Complaint ¶¶ 18-42, Doc. No. 1-1, Euclid Chem. Co. v. Vect or Corrosion Techs., Inc. , No. 1:05-CV-080 (N.D. Ohio Jan. 14,

2008-1170 22005) (“ Complaint ”). Each of these five counts was resolved prior to appeal as the result of various j udgments and settlements. Euclid , slip op. at 1. Euclid’s two remaining counts are at issu e in this appeal. In Count VI, Euclid sought declaratory judgment t hat the Assignment did not tr ansfer the ’742 patent to Vector. Complaint ¶¶ 43-53. In Count VII, Euclid so ught a further de claratory judgment that it was a bona fide purchaser for value of the ’742 patent. Id. ¶¶ 54-58. Vector moved for partial summary judgm ent, arguing that it was the rightful owner of the ’742 patent, by virtue of the Assignment. Euclid , slip op. at 2. The Assignment is a one-page document, dated Dece mber 20, 2001, and signed by Jack Bennett (“Bennett”). Bennett is the sole named inventor of the ’742 patent. See ’742 patent at [76]. In full, the Assignment provides: I, JACK BENNETT, whose full post office address is 10039 Hawthorne Drive, Chardon, Ohio 44024, in consi deration for $25,000.00 and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged do hereby sell and assign to VECTOR CORROSION TECHNOLOGIES LTD. whos e full post office address is 474 Dovercourt Drive, Winnipeg, Mani toba Canada R3Y 1G4, all my interest in the United States, Canada and in all other countries in and to my US, Canadian, and European applic ations for patents and issued US patent, namely: 1. Issued US Patent 6,033,553. This patent claims the specific use of LiNO 3 and LiBr to enhance the performance of metallized zinc anodes; 2. US Application No. 08/839, 292 filed on April 17, 1997, 3. US Application No. 08/731,248, filed on October 11, 1996 (now abandoned), 4. EPO Application No. 99122342.1, filed November 9, 1999, and 5. Canadian Application No. 2288630, filed Nove mber 8, 1999, any and all divisional applications, cont inuations, and continuations in part together with the entire right, title and in terest in and to said applications,

2008-1170 3any and to all divisional applications , continuations, and continuations in part thereof, the right to claim priori ty therefrom under the International Convention, and any and all Letters Patent which may issue or be reissued for said invention to the fu ll end of the term for which each said Letters Patent may by granted; and her eby authorize the issuance to said assignee of any and all said Letters Patent not already issued as the assignee of entire right, title and intere st in and to the same, for the sole use and benefit of said assignee, it s successors, assigns or legal representatives; and hereby covenant and agree to do all such lawful acts and things and to execute without further consideration such further lawful assignments, documents, assurances, applications, and other instruments as may reasonably be required by said assignee, its successors, assigns or legal representatives, to obtain any and all Letters Patent for said invention and vest the same in said assignee, its successors, assignees or legal representatives. SIGNED AT: Chardon, Ohio, U.S.A. This 20th day of December, 2001 The ’742 patent is a “[c]ontinuation-in-part of applicat ion No. 09/236,731, filed on Jan. 25, 1999, now Pat. No. 6,033,553 . . . .” ’742 patent at [63]. However, the ’742 patent issued on April 17, 2001— before the date of the December 20, 2001 assignment. Id. at [45]. The district court granted Vector’s motion for partial summary judgment. Applying Ohio law, the di strict court reasoned that th e Assignment was unambiguous, that the ’742 patent was a continuation-in-part of U.S. Patent 6, 033,553 (the “’553 patent”), and that “the plain and unambiguous language of t he [Assignment] assigns all rights in the 553 patent and any and all continuations-in-part thereof.” Euclid , slip op. at 6. Because the district court held that the Assignment was unamb iguous, it concluded that it could not consider extrinsic evidence to interpret it. Id. Addressing Count VII of Euclid’s complaint, the district court noted that Euclid did not move for summary judgment on its bona fide purchaser claim, and instead only made arguments concerning its st atus as a bona fide purchaser in a footnote in its brief

2008-1170 4in opposition to Vector’s motion for par tial summary judgment on ownership. Id. at 8. Because of this, the district court found t hat Euclid had “abandoned Count VII of its Complaint.” Id. The district court concluded t hat no remaining claims were pending before the court, and it entered final judgment. Id. at 9. Euclid timely appealed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1). II. DISCUSSION A. Assignment of the ’742 Patent The district court held that the Assignm ent unambiguously transferred ownership of all continuations-in-part of the ’553 patent to Vector, in cluding the ’742 patent, even though the ’742 patent had already issued. Specif ically, the district court relied on the language of the Assignment assigning “Issued US Patent 6,033,553” along with “any and all . . . continuations in par t together with the entire right, title and interest in and to said applications, any and to all divisional a pplications, continuations, and continuations in part thereof . . . and any and all Letters Patent which may issue or be reissued for said invention . . . .” Euclid , slip op. at 6. According to the district court, the “said invention” referred to in the Assignment is the invention of the ’553 patent, and the ’742 patent is unambiguously a continuat ion-in-part of that patent. Id. Euclid argues on appeal that the contract is, at best, ambiguous as to whether already issued patents are encompassed in the assignment. “This court reviews a district c ourt’s grant of summary judgment de novo .” Israel Bio-Engineering Project v. Amgen, Inc. , 475 F.3d 1256, 1263 (Fed. Cir. 2007). “Construction of patent assignm ent agreements is a matter of state contract law.” Mars, Inc. v. Coin Acceptors, Inc. , 527 F.3d 1359, 1370 (Fed. Cir. 2008). Under Ohio law:

2008-1170 5When confronted with an issue of c ontractual interpretation, the role of a court is to give effect to the in tent of the parties to the agreement. We examine the [contract] as a whole and presume that the intent of the parties is reflected in the language used in the [contract]. We look to the plain and ordinary meaning of the language used in the [contract] unless another meaning is clearly apparent fr om the contents of the [contract]. When the language of a written contract is cl ear, a court may look no further than the writing itself to find the intent of t he parties. As a matter of law, a contract is unambiguous if it c an be given a definite legal meaning

. On the other hand, where a contract is ambiguous, a court may consider extrinsic evidence to ascertain the parties’ intent. . . . Westfield Ins. Co. v. Galatis , 797 N.E.2d 1256, 1261 (Ohio 2003 ) (citations omitted and emphases added). Put another wa y, “[a]mbiguity exists only where a term cannot be determined from the four co rners of the agreement or w here contract language is susceptible to two or more reasonable interpretations.” Potti v. Duramed Pharms., Inc. , 938 F.2d 641, 647 (6th Cir. 1991) (citing Wells v. Am. Elec. Power Co. , 548 N.E.2d 995 (Ohio Ct. App. 1988)). We disagree with the district court that the Assignment unambiguously transferred ownership of the ’ 742 patent to Vector. The district court was correct that the language of the Assignment purports to convey “US Patent 6,033,553” and “any and all divisional applicati ons, continuations, and cont inuations in part.” Euclid , slip op. at 4. The district court was also correct that the ’742 patent is a conti nuation-in-part of the ’553 patent, as the Related U.S. Application Data on the fa ce of the ’742 patent makes clear. Id. at 6; see also ’742 patent at [63]. The Assignment, however, also includes language that suggests that it was not intended to effect an assignment of the ’ 742 patent. In particular, the Assignment specifically assigns all interest in and to the inventor’s “US, Canadian, and European applications for patents and issued US patent.” Notably, this language refers to

2008-1170 6“applications”—plural—but “issued US patent ”—singular. Had t he assignee intended, through the assignment of “continuat ions in part” to assign other issued U.S. patents, it would be expected that the Assi gnment would have said that the inventor was assigning his “issued US patents”—plural—and even recit ed the patent number of the issued ’742 patent. At bottom, we cannot give the Assi gnment a “definite legal meaning.” Westfield , 797 N.E.2d at 1261. Under one reasonable interpretati on, the Assignment includes the ’742 patent, because it issued from a continuati on-in-part of the ’553 patent. But under another reasonable interpretation, the Assi gnment excludes the ’742 patent, because it was an already issued patent, not an applicati on, at the time of the assignment. We therefore conclude that the Assignment is susceptible to at least two reasonable interpretations and is therefor e ambiguous under Ohio law. See Potti , 938 F.2d at 647. Extrinsic evidence therefore should have been considered to ascertain the parties’ intent. See Westfield , 797 N.E.2d at 1261. In its brief on appeal, Euclid argues that subs tantial extrinsic evidence supports its view that the Assignment did not include t he ’742 patent. Specifically, Euclid points to evidence concerning Vector’s recording of the assignment of t he ’553 patent but not the ’742 patent, the inventor’s payment of maintenance fees and attempted licensing negotiations after the date of the Assign ment, and the subsequent execution of a different assignment by the inventor. Vect or, however, has not yet had the opportunity or the obligation to challenge Euclid’s extrinsic evidence or to bring forward its own evidence of intent. We therefore remand to the district court to allow that court to determine in the first instance—either through a subsequent motion for summary

2008-1170 7judgment, or at trial—whether t he Assignment, interpreted in light of relevant extrinsic evidence, transferred ownership of the ’742 patent to Vector. B. Euclid’s Bona Fide Purchaser Claim The district court found that Euclid had abandoned Count VII of its complaint, which alleged that Euclid was a bona fide purchaser for value of the ’742 patent. Euclid , slip op. at 8. In making this finding, the district court noted that Euclid did not move for summary judgment on its bona fide purchaser clai m, and that the only arguments that it had presented to support that claim were made in an “educational footno te” in its brief in opposition to Vector’s motion for summary j udgment on the issue of ownership based on the Assignment. Id. In its briefing on appeal, Vector argues that the district court’s finding was proper, because Vector had mov ed for summary judgment on the issue of ownership under the Assignment, and Euclid fa iled to meet its burden under Federal Rule of Civil Procedure 56(e)(2) to “set out specific facts showing a genuine issue for trial.” In essence, Vector treats the district court’s findi ng of abandonment as a grant of summary judgment in Vector’s favor. Euc lid responds that Vector never moved for summary judgment on Euclid’s bona fide purchas er claim, and that Euclid was therefore under no obligation to come forward with ev idence until trial. Euclid therefore characterizes the district court’s action not as a grant of summary judgment, but rather as a dismissal of its claim fo r failure to prosecute. We agree with Euclid that the district court’s findi ng that it had abandoned its bona fide purchaser claim was effectively a dism issal for failure to prosecute, rather than a grant of summary judgment. Euclid ’s complaint presented two separate counts related to the ’742 patent: Count VI sought a declaratory judgment that the Assignment did not transfer any rights in the ’742 pa tent to Vector, while Count VII sought a

2008-1170 8declaratory judgment that Euclid was a bona fide purchaser for value of the ’742 patent. Vector moved for partial summary judgment on its claim of title pursuant to the Assignment, but it has identifi ed no part of its motion for pa rtial summary judgment that makes any mention of Euclid’s bona fide purchas er for value claim. A party’s obligation to “set out specific facts showing a genuine issue for trial” is triggered only when “a motion for summary judgment is properly m ade and supported.” Fed. R. Civ. P. 56(e)(2). Here, Vector did not move for summary judgment on Euclid’s bona fide purchaser claim, and the district court therefore could not properly have entered summary judgment against Euclid under Rule 56(e)(2). We therefore construe the district c ourt’s judgment that Euclid abandoned its bona fide purchaser claim as a dismissal for fa ilure to prosecute. Pursuant to Federal Rule of Civil Procedure 41(b), “[i]f the plaintiff fails to prosecute . . . a defendant may move to dismiss the action or any claim agai nst it.” Regional circuit law governs our standard of review of dismissals for failure to prosecute, Mitutoyo Corp. v. Cent. Purchasing, LLC , 499 F.3d 1284, 1290 (Fed. Cir. 2007), and the Sixth Circuit reviews such dismissals for abuse of discretion, Wu v. T.W. Wang, Inc. , 420 F.3d 641, 643 (6th Cir. 2005). In this case, the district court relied on two facts to conclude that Euclid had abandoned its bona fide pur chaser claim: (1) Euclid “did not move for summary judgment on this claim”; and (2) Euclid’s “a rguments on [its] stat us as a [bona fide purchaser] were limited to a footnote in its Brief in Opposition to Defendants’ Motion for Partial Summary Judgment and in its list of extrinsic evidence it asked the Court to consider when determining ow nership of the 742 patent.” Euclid , slip op. at 8. Neither

2008-1170 9of these facts support the district court’s conclusion that Euclid abandoned its bona fide purchaser claim. As to Euclid’s failure to move for summary judgment, it is clear that the failure to move for summa ry judgment on a claim does not indicate an intent to abandon that claim. See, e.g. , Mitutoyo , 499 F.3d at 1290-91 (holding that district court “abused its discretion by dismi ssing [a] claim for failure to prosecute under Rule 41(b)” when the court “relied heavily on the fact that [the plainti ff] did not move for summary judgment,” because “failure to so move likely indicates [the plaintiff’s] sense that issues of material fact exist, not an in tent to abandon its . . . claim.”). Likewise, Euclid’s failure to address its bona fide purchaser argument in detail in its oppos ition to Vector’s motion for summary judgment cannot support dismissal for failure to prosecute. As discussed above, Euclid was not obligated to come fo rward with any argument concerning its bona fide purchaser claim when Vector did not mo ve for summary judgment on that claim. Moreover, Euclid asserted its bona fide purchas er argument—albeit in what the district court characterized as an “educational foot note”—in response to Vector’s separate summary judgment motion on the issue of ownership under the Assignment. Euclid , slip op. at 8. In these circumstances, we conclude that the dist rict court abused its discretion by dismissing Euclid ’s bona fide purchaser claim. III. CONCLUSION For the foregoing reasons, we conclude that the Assignment was ambiguous and that the district court shou ld have considered extrinsic evidence to determine whether the Assignment transferred owne rship of the ’742 patent. We further conclude that the district court abused its discretion by dismissi ng Euclid’s bona fide purchaser claim. We therefore vacate the judgment of the distri ct court and remand fo r further proceedings consistent with this opinion.

2008-1170 102008-1170 11 VACATED AND REMANDED COSTS Each party shall bear its own costs.

## United States Court of Appeals for the Federal Circuit

2008-1170

THE EUCLID CHEMICAL COMPANY,

Plaintiff/Counterclaim Defendant- Appellant, v. VECTOR CORROSION TECHNOLOGIES, INC., Defendant-Appellee, and DAVID WHITMORE, Defendant/Counterclaimant-Appellee, and VECTOR CORROSION TECHNOLOGIES, LTD., Counterclaimant-Appellee.

Appeal from the United States District Court for the Northern District of Ohio in Case No. 1:05-CV-080, Judge Christopher A. Boyko.

NEWMAN, Circuit Judge , concurring in part, dissenting in part. I agree that the district court erred in its grant of summary judgment, but I must, with all respect to my colleagues, dissent from their decision that the issue of contractual intent requires trial. T he agreements transferring the Bennett patent property to Vector are clear t hat the only issued patent included in the transfer is U.S. Patent No. 6,033,553 (“the ’553 patent”). The rules of contract and patent law do notpermit the interpretation that another patent on a different invention, a patent fully known to Vector, was nonetheless silently c onveyed by these agreements. Since as a matter of law only one conclusion is reasonable, there is no need for prolongation of this litigation with its costs, delays, and burdens on parties and courts. The three contracts for the ’553 patent and four patent applicationsIt has long been known that metals such as zinc, when deployed in steelreinforced concrete, can reduce corrosion of t he steel by “galvanic cathodic protection.” 1 Relevant to this dispute are two forms of this technology. In the first form, called “metallized” or “distributed” zinc anode technology , the zinc anode is distributed over the surface of the steel-reinforced concrete. This technology, as enhanced by use of lithium nitrate and lithium bromi de, is the subject of the ’553 patent, issued on March 7, 2000 to Jack Bennett. The second form is called “embedded” or “discrete” zinc anode technology, wherein discrete anodes are embedded in the steel-reinforced concrete. This technology, with lithium nitrate and lithium br omide enhancement, is the subject of U.S. Patent No. 6,217,742 (“the ’742 patent”), iss ued on April 17, 2001 to Jack Bennett. The ’742 patent is identif ied as a continuation-in-part of the ’553 patent, and contains new matter describing and claiming the lit hium-enhanced embedded zinc anode technology. On December 20, 2001 Mr. Bennett ent ered into three agreements with the Vector companies. Mr. Bennett is described as “a leader in the field of galvanic protection” and “an independe nt contractor of substantial r eputation.” Euclid App. Br. at

1 This principle is attributed to Sir Humphrey Davy, who in 1824 attached chunks of iron to the hulls of copper-clad sh ips of the British Navy, and dramatically reduced corrosion of the copper. Euclid Br. at 12 (citing John P. Broomfield, Corrosion of Steel in Concrete: Understan ding, Investigation and Repair (Taylor & Francis, 1997)).
2008-1170 22. He has had busine ss dealings with both Euclid and Vector. Each of the three agreements lists the ’553 patent and four patent applications, and describes the transferred subject matter as “the specific use of LiNO 3 and LiBr to enhance the performance of metallized zinc anodes.” T he ’742 patent excludes metallized zinc anodes from the scope of its claims. The first agreement between Mr. Bennett and Vector, entitled “Patent Transfer Agreement,” states the transaction as follows: TRANSFER OF PATENTS AND PAT ENT APPLICATIONS APPOINTMENT 2. The Transferor hereby sells, transfers and assigns to the company all of his interest in the following patents and patent app lications (all of which, and all rights, title and intere sts thereto, being collectively referred to in the Agreement as the “Patents”): 1. Issued US Patent 6,033,553. Th is patent claims the specific use of LiNO 3 and LiBr to enhance the performance of metallized zinc anodes; 2. US Application No. 08/839, 292 filed on April 17, 1997, 3. US Application No. 08/731,248, filed on October 11, 1996 (now abandoned), 4. EPO Application No. 99122342. 1, filed November 9, 1999, and 5. Canadian Application No. 2288630, filed November 8, 1999. The only issued patent on this list is the ’553 patent. There is no mention of the ’742 patent which had issued eight months before the contract was executed, no mention of embedded zinc anodes, and no end-clause referring to conti nuing applications, as in the third agreement. The second agreement, entitled “Consulting Agreement,” lists the same “issued US patent 6,033,553,” again describes it as relating to “metallized zinc anodes,” and

2008-1170 3provides for consulting services for “the s ubject technology.” T he agreement states in relevant part: SERVICES 2. The Consultant agrees that the services to be provided under this consulting agreement will be provi ded personally by JACK BENNETT. The Consultant further agrees that he will provide consultation to the Company relating to the applicati on of the technology as described in the US, Canadian and European applic ations for patents and issued US patent as follows: 1. Issued US Patent 6,033,553. Th is patent claims the specific use of LiNO 3 and LiBr to enhance the performance of metallized zinc anodes; 2. US Application No. 08/839, 292 filed on April 17, 1997, 3. US Application No. 08/731,248, filed on October 11, 1996 (now abandoned), 4. EPO Application No. 99122342. 1, filed November 9, 1999, and 5. Canadian Application No. 2288630, filed Nove mber 8, 1999. Services shall include transfer of technology, assistance with marketing and data, training, assistance with field applications, and any other questions relating to the subject tec hnology that falls within the expertise and knowledge of the Consultant as of the date of execution of this Agreement. Again, no mention is made of Bennett’s separately patented process for lithiumenhanced embedded anodes, the subjec t of the ’742 patent, and there is no end-clause as appears in the third agreement, entitled “Pat ent Assignment,” followin g in its entirety: PATENT ASSIGNMENT I, JACK BENNETT, [address], in consideration for $25,000.00 and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged do hereby sell and assign to VECTOR CORROSION TECHNOLOGIES LTD. [addr ess] all my interest in the United States, Canada and in all other countries in and to my US, Canadian, and European app lications for patents and issued US patent, namely:

2008-1170 41. Issued US Patent 6,033,553. Th is patent claims the specific use of LiNO 3 and LiBr to enhance the performance of metallized zinc anodes; 2. US Application No. 08/839, 292 filed on April 17, 1997, 3. US Application No. 08/731, 248, filed on October 11, 1996 (now abandoned), 4. EPO Application No. 99122342. 1, filed November 9, 1999, and 5. Canadian Application No. 2288630, filed Nove mber 8, 1999, any and all divisional applications, cont inuations, and continuations in part together with the entire right, title and in terest in and to said applications, and to all divisional applications, c ontinuations, and continuations in part thereof, the right to cl aim priority therefrom under the International Convention, and any and all Letters Patent which may issue or be reissued for said invention to the fu ll end of the term for which each said Letters Patent may be granted; and hereby authorize the issuance to said assignee of any and all said Letters Patent not already issued as the assignee of entire right, title and intere st in and to the same, for the sole use and benefit of said assignee, it s successors, assigns or legal representatives; and hereby covenant and agree to do all such lawful acts and things and to execute without further consideration such further lawful assignments, documents, assurances, applications, and other instruments as may reasonably be required by said assignee, its successors, assigns or legal representatives, to obtain any and all Letters Patent for said invention and vest the same in said assignee, its successors, assignees or legal representatives. The district court accepted Vector’s argument that the reference in this end-clause to “continuations in part” assigned the ’742 patent to Vector, and declined to consider the evidence of contractual intent that Euclid proffered to show that this reading was incorrect. Although my colleagues, in an abundance of caution, remand for trial of contractual intent, it is qui te clear that the only reas onable construction of these agreements is that they assigned the specifically listed ’553 pa tent and four applications directed to metallized anode technology, and continuing or reissu e applications and patents “for said invention,” but did not assign the previous ly issued yet unlisted ’742 patent for a different invention.

2008-1170 5None of the three agreement s mentions the ’742 pa tent or embedded anode technology. This catch-all reference to continuing and reissue applications cannot be interpreted as assigning a patent that had issued eight months earlier on a different invention and whose exist ence was known to Vector. 2 The reference to “continuations in part” in the end-clause is directed to “sai d invention,” the subject of the transfer and defined for the ’553 patent as “enhanc[ing] the performance of metallized zinc anodes.” The ’742 patent is not for “said invention.” The distinct subject matter of the ’553 and the ’742 patents is stressed in the patents themselves. The ’553 specification and claims are directed to metallized distributed anodes, while the ’742 specification and claims ar e directed to embedded distinct anodes. The ’742 sp ecification describes the in vention as for “embedded anodes comprised of individua l elements that are spaced apart from one another, as opposed to distributed anodes that essentially cover the entire concrete structure surface.” ’742 patent, col. 3, lines 30-33. The claims of the ’ 742 patent are founded on new matter that is not present in the ’553 specification, and the ’742 patent drew the explicit distinction from the meta llized anode technology of the ’553 patent. Although my colleagues sugges t that the reference to “c ontinuations in part” in the end-clause of the third agr eement introduced an ambiguity that warrants trial of contractual intent, that claus e is not reasonably construed as assigning Bennett’s ’742 patent to Vector. Such a clause is not unusual in technology contracts, when the

2 Mr. Whitmore, President of Vector Corrosion Technologies, Inc. and a defendant herein, testified that he knew of the ’742 patent in “maybe June or July” following its issuance in April 2001. Whitmore Dep. at 124:18 (Dec. 13, 2006), filed with this court with Letter from Vect or’s Counsel (Aug. 6, 2008) to correct a misstatement at oral argument of this appeal.
2008-1170 6parties agree that their deal in cludes future developments of “said invention,” including patents that “may issue or be reissued.” Such a prospective provision does not remove the obligation of contracting par ties to identify the existing patent properties that are being assigned. It is a truism of patent practice that trans fers of patent property require specificity as to the property transferred. See, e.g. , Estate of Paxton v. Comm’r , 44 T.C.M. (CCH) 771 (T.C. 1982) (“During all times herein, it was a well-established trade practice for patent lawyers to describe and identify inventions with spec ificity in legal instruments licensing the right to exploit, assigning or otherwise affecting property rights in the invention.”); Poole v. Comm’r , 46 T.C. 392, 406 (1966) (“We have examined the Revolvex-Poole agreement of Ma rch 1, 1956, and find that it did not obligate Poole to assign the patent applications for the hing ed bay window. The 1956 contract clearly identified by number the patent applications included in th e contract and bound Poole to assign the patents on those applic ations only. The contract did not mention the hinged bay window.”). The practice requiring specificity of i dentification of trans ferred patents is so entrenched, that it would sm ack of misfeasance to have omitted the known ’742 patent from the list of assigned proper ties, if the parties had intended that it be assigned. The now-asserted assignment to Vect or of the ’742 patent was never recorded in the Patent and Trademark Office, as authorized by 35 U.S.C. §261, although the assignment of the ’553 patent was recorded within a few wee ks after execution of the 2001 agreements. Vector also promptly recorded the assignment of the patent that issued in 2003 on U.S. Application No. 08/839,292, whic h is item No. 2 listed in t he three contracts. Vector

2008-1170 7obviously knew the rules of recordation, but did not plac e the asserted assignment of the ’742 patent into position for reco rdation. PTO regulations state: An assignment relating to a patent mu st identify the patent by the patent number. An assignment relating to a national patent application must identify the national patent applic ation by the application number (consisting of the series code and serial number, e.g., 07/123,456). 37 C.F.R. §3.21. Euclid also points out that Vector did not pay the maintenance fee that was due in 2004 for the ’742 patent; Mr. B ennett paid the fee. These are not factual issues that require remand; they are undisputed matters of public record. See 37 C.F.R. §3.12 (assignment records are open to public inspection). These actions are an unequivocal negation of contractual intent to assign the ’742 patent to Vector in a 2001 agreement. It is not reasonab le to conclude that the end-clause mentioning continuations “for sa id invention” was intended to assign a different, existing patent on a different inv ention. Even if the Patent Assignment agreement were remotely “susceptible” to th is construction, it is not “rational and probable.” See Graham v. Drydock Coal Co. , 667 N.E.2d 949, 954 (Ohio 1996) (“Where the language of a contract . . . is susceptible of two constructions, one of which makes it fair, customary, and such as prudent men would naturally execute, while the other makes it inequitable, unusual, or such as reasonable men would not be likely to enter into, the interpretation which makes a rational and probable agreement must be preferred.”). In summary, the ’742 patent is not mention ed in any of the three concurrent 2001 agreements although the ’742 pa tent was issued a nd was known to Vector when these agreements were executed. T he ’742 patent was not a pe nding continuation-in-part application, but had issued eight months before the patent tr ansfer contract was entered

2008-1170 8into. The three agreements specifically list the ’553 patent and four United States and foreign applications and describe the tec hnology as metallized zinc anodes. No agreement mentions embedded anode technology, the subject matter of the ’742 patent. The specification and claims of t he ’742 patent carefully distinguish the embedded anode technology of the ’742 patent from the metallized distributed anode technology of the ’553 patent, leaving no ambigu ity as to the distinct inventions covered by these patents. It woul d not have been reasonable to lis t only the ’553 patent if the Patent Assignment were intended to include the ’742 patent. No reasonable construction of these contract s can include assignment of t he ’742 patent by silence. The Ohio law of contracts views contract interpretation as a matter of law. Potti v. Duramed Pharms., Inc. , 938 F.2d 641, 647 (6th Cir. 1991) (citing Uebelacker v. Cincom Systems, Inc. , 549 N.E.2d 1210 (Ohio Ct. App. 1988)) (“Under Ohio law, interpretation of written contract terms is a matter of law for initial determination by the court.”). While ambiguous co ntract terms warrant evidence of contractual intent, ambiguity exists “only where a term cannot be determined from the four corners of the agreement or where contract language is susceptible to two or more reasonable interpretations.” Id. (citing Wells v. Am. Elec. Power Co. , 548 N.E.2d 995 (Ohio Ct. App. 1988)); see also Graham , 667 N.E.2d at 954. Here, how ever, the only reasonable interpretation is that no contract assigned the ’742 patent to Vector. See Hercules Inc. v. United States , 292 F.3d 1378, 1381 (Fed. Cir. 2002) (“[A] contract must be construed to effectuate its spirit and purpose giving reasonable meaning to all parts of the contract.”). There is accordingly no need fo r fact finding on the question of contractual intent, because the intent of the cont racts is clear as a matter of law.

2008-1170 92008-1170 10 Applying the summary judgment standard of Anderson v. Liberty Lobby , 477 U.S. 242, 247 (1986), I would hold th at the ’742 patent was not assigned, for no reasonable jury could return a contrary verdict. I would not prolong this litigation.