United States Court of Appeals 

for the Federal Circuit ______________________ 

GREGORY C. JAMES,

Plaintiff-Appellant

v.

J2 CLOUD SERVICES, LLC, ADVANCED 

MESSAGING TECHNOLOGIES, INC.,

Defendants-Appellees

______________________ 

2017-1506

______________________ 

Appeal from the United States District Court for the 

Central District of California in No. 2:16-cv-05769-CASPJW, Judge Christina A. Snyder.

______________________ 

Decided: April 20, 2018 

______________________ 

 KEITH VOGT, Oak Park, IL, argued for plaintiffappellant. Also represented by DANIEL CHARLES COTMAN,

OBI ILOPUTAIFE, Cotman IP Law Group, PLC, Pasadena, 

CA.

 GUY RUTTENBERG, Ruttenberg IP Law, PC, Los Angeles, CA, argued for defendants-appellees. Also represented by BASSIL GEORGE MADANAT. 

______________________ 

Before REYNA, TARANTO, and HUGHES, Circuit Judges.
2 JAMES v. J2 CLOUD SERVICES, LLC

TARANTO, Circuit Judge. 

In this action against j2 Cloud Services, LLC and Advanced Messaging Technologies, Inc. (AMT), Gregory 

James asserts a claim for correction of inventorship under 

35 U.S.C. § 256, as well as various state-law claims. The 

district court dismissed the correction-of-inventorship

claim for lack of jurisdiction and, consequently, dismissed 

the state-law claims. We reverse the jurisdictional dismissal and remand for further proceedings.

I 

Mr. James alleges in his complaint that he is the sole 

inventor of the subject matter claimed in U.S. Patent 

6,208,638, which names Jack Rieley and Jaye Muller as 

the inventors. The ’638 patent, which Messrs. Rieley and 

Muller applied for on April 1, 1997, describes and claims 

systems and methods “for accepting an incoming message 

over a circuit switched network and transmitting it over a 

packet switched network.” ’638 patent, Abstract. More 

particularly, the patent describes the conversion of an 

incoming facsimile or voicemail message into a digital 

representation, which is then forwarded to an email 

address associated with the account holder’s phone number. Id., col. 3, lines 47–61, col. 5, line 66 through col. 6, 

line 54. The application that issued as the ’638 patent 

was originally assigned to JFAX Communications, Inc., 

the company owned by Messrs. Rieley and Muller at the 

time of the invention. At present, the ’638 patent is 

assigned to AMT, and j2 has an exclusive license to it. 

The patent expired on April 1, 2017. 

Mr. James alleges that in November 1995 he was introduced to JFAX’s Mr. Rieley, who asked Mr. James to

develop software that would provide JFAX with three 

functionalities—“Fax-to-Email, Email-to-Fax, and 

Voicemail-to-Email.” J.A. 37. At that time, Mr. James 

alleges, he agreed to “create and develop original software 

solutions and systems” and began working, and “[n]obody 
JAMES v. J2 CLOUD SERVICES, LLC 3

at JFAX provided input about how” the work was to be 

done. Id. According to the complaint, Mr. James successfully tested a Fax-to-Email system on December 25, 1995, 

and the next month he traveled to New York to install it. 

J.A. 38.

On February 11, 1996, Mr. James and Mr. Rieley, as 

representatives, signed a contract between their principals detailing the work to be done. J.A. 53–57. The 

agreement was between JFAX, for which Mr. Rieley 

signed, and GSP Software, “a partnership of professional 

software developers and independent contractors,” for 

which Mr. James signed. J.A. 53, 57. The parties and the 

district court refer to this contract as the “Software Development Agreement” (SDA)—whose preamble states 

that it reflects the parties’ “Agreement on the terms by 

which” GSP “will develop software solutions for the exclusive use of JFAX.” Id. The SDA (which states that it is 

governed by Delaware law) does not mention patent 

rights, whereas it expressly requires the assignment to 

JFAX of “all copyright interests” in the developed “code 

and compiled software.” J.A. 55. 

According to the complaint, from February to August 

1996, Mr. James, while in New York, developed and 

deployed all three JFAX systems, which included software 

and hardware components covered by the ’638 patent.1 

J.A. 38–42. “The technical aspects of the code, functionality and operation of the system[s] were all conceived and 

implemented by [Mr.] James,” he contends, and the only 

input provided by JFAX “was that JFAX needed a system.” J.A. 37, 40–41. 

1 Mr. James alleges that the initial development of 

the Fax-to-Email system occurred in November and 

December 1995 while he was in Australia. The system 

was completed soon afterward in New York.

 
4 JAMES v. J2 CLOUD SERVICES, LLC

Mr. James alleges that on August 30, 1996, he assigned all copyrights in code and compiled software to 

JFAX, but he “did not assign any patent ownership or 

inventorship rights.” J.A. 42. He adds that he was not 

aware of the ’638 patent until “November 2013 when he 

was contacted by attorneys representing one of the defendants” in a suit brought by JFAX (or perhaps a successor) alleging infringement of the ’638 patent. J.A. 43. 

On August 3, 2016, Mr. James brought the present 

action. The operative (first amended) complaint asserts a 

claim for correction of inventorship under 35 U.S.C. § 256, 

along with state-law claims for unjust enrichment, conversion, misappropriation, and unfair competition. In 

October 2016, j2 and AMT filed a motion requesting, 

among other things, that the case be dismissed on the 

ground that the court lacks jurisdiction because Mr. 

James has no Article III standing to bring the action.2

On December 19, 2016, the district court agreed with 

the Article III standing argument and granted the motion 

under Rule 12(b)(1) of the Federal Rules of Civil Procedure. It concluded that Mr. James lacks a stake in the 

controversy because he “fail[ed] to allege facts sufficient to 

show that he has an ownership or financial interest in the 

’638 patent.” James v. j2 Cloud Servs. Inc., No. 2:16-cv05769, 2016 WL 9450470, at *5 (C.D. Cal. Dec. 19, 2016). 

Accordingly, the court also dismissed the state-law claims. 

Id. The dismissal was entered on December 22, 2016.

2 By the time the motion was filed, the only defendants left in the case were j2 and AMT. An additional j2 

entity, also named as a defendant, was dismissed before 

the motion was filed. In addition to the standing-based 

jurisdictional argument, the motion advanced at least 

seven additional arguments for either dismissal or summary judgment.

 
JAMES v. J2 CLOUD SERVICES, LLC 5

Mr. James timely appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(1).

II

We review without deference the ruling before us: the 

district court’s Rule 12(b)(1) dismissal for lack of standing. See Chou v. Univ. of Chicago, 254 F.3d 1347, 1357 

(Fed. Cir. 2001); Cedars-Sinai Medical Ctr. v. Watkins, 11 

F.3d 1573, 1580 (Fed. Cir. 1993) (citing Love v. United 

States, 915 F.2d 1242, 1245 (9th Cir. 1989)). 

The district court stated the standard it was applying:

“When deciding a Rule 12(b)(1) motion, the court construes all factual disputes in favor of the non-moving 

party.” James, 2016 WL 9450470, at *3 (citing Dreier v. 

United States, 106 F.3d 844, 847 (9th Cir. 1996)). We 

apply the same standard. “[A]t the pleading stage, the 

plaintiff must clearly . . . allege facts demonstrating each 

element” required for standing, Spokeo, Inc. v. Robins, 

136 S. Ct. 1540, 1547 (2016), as revised (May 24, 2016) 

(internal quotation marks omitted), but “general factual 

allegations of injury resulting from the defendant’s conduct may suffice, for on a motion to dismiss we presume 

that general allegations embrace those specific facts that 

are necessary to support the claim,” Lujan v. Defenders of 

Wildlife, 504 U.S. 555, 560 (1992) (internal quotation 

marks and alterations omitted). “For purposes of ruling 

on a motion to dismiss for want of standing, both the trial 

and reviewing courts must accept as true all material 

allegations of the complaint, and must construe the 

complaint in favor of the complaining party.” Warth v. 

Seldin, 422 U.S. 490, 501 (1975); see Ritchie v. Simpson, 

170 F.3d 1092, 1097 (Fed. Cir. 1999).

A 

To have Article III standing, the “plaintiff must have 

(1) suffered an injury in fact, (2) that is fairly traceable to 

the challenged conduct of the defendant, and (3) that is 
6 JAMES v. J2 CLOUD SERVICES, LLC

likely to be redressed by a favorable judicial decision.” 

Spokeo, 136 S. Ct. at 1547 (citing Defenders of Wildlife, 

504 U.S. at 560–61); see Chou, 254 F.3d at 1357. “The 

benefit of the suit to the plaintiff must relate to the alleged injury.” Huster v. j2 Cloud Servs., Inc., 682 F. App’x 

910, 914 (Fed. Cir. 2017) (citing Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 

765, 772–73 (2000)). In conducting the standing analysis, 

we “assume[] the merits of a litigant’s claim and determine[] whether even though the claim may be correct the 

litigant advancing it is not properly situated to be entitled 

to its judicial determination.” Rocky Mountain Helium, 

LLC v. United States, 841 F.3d 1320, 1325 (Fed. Cir. 

2016) (internal quotation marks omitted); see 13A Charles 

Alan Wright & Arthur R. Miller, Federal Practice and 

Procedure §§ 3531, 3531.4 (3d ed. 2008 & Supp. 2016). 

In this case, Mr. James alleges that he is the sole inventor of the inventions claimed in the ’638 patent, that 

sole inventorship entails sole ownership, and that 35 

U.S.C. § 256 gives him a cause of action to establish sole 

inventorship and therefore sole ownership. Subject to an 

important qualification, if Mr. James were to prevail on 

those allegations in this case, he would stand to gain 

concretely, whether through securing an entitlement to 

seek damages for past acts of infringement or otherwise. 

Such a gain would be directly related to the merits of the 

claim and would redress the asserted injury of being 

deprived of allegedly rightful ownership. In the absence 

of other facts, that is enough to give Mr. James Article III 

standing.

The district court did not conclude otherwise. Nor did 

it depart from the longstanding “basic principle, codified 

in the Patent Act, that an inventor owns the rights to his 

invention.” Bd. of Trustees of Leland Stanford Junior 

Univ. v. Roche Molecular Sys., Inc., 563 U.S. 776, 790 

(2011); see Teets v. Chromalloy Gas Turbine Corp., 83 

F.3d 403, 407 (Fed. Cir. 1996) (“Ownership springs from 
JAMES v. J2 CLOUD SERVICES, LLC 7

invention.”). Rather, the court found the straightforward 

standing logic recited above to be inapplicable in this 

matter because of the important qualification that 

“[w]hen the owner of a patent assigns away all rights to 

the patent, neither he nor his later assignee has a ‘concrete financial interest in the patent’ that would support 

standing in a correction of inventorship action.” Trireme 

Medical, LLC v. AngioScore, Inc., 812 F.3d 1050, 1053 

(Fed. Cir. 2016) (quoting Chou, 254 F.3d at 1359). 

According to the district court, the facts indisputably 

show Mr. James to have done just that—i.e., to have 

assigned away, or entered into an enforceable agreement 

to assign away, any ownership rights he may have had in 

the patent. The correctness of that ruling is the sole issue 

before us. If the district court was right, then Mr. James 

lacks standing for want of any concrete interest in securing recognition as the sole inventor of the patent.3

The district court held specifically that, even if Mr. 

James was an inventor (even the sole inventor), he had 

assigned, or obligated himself to assign, his patent rights 

to JFAX. James, 2016 WL 9450470, at *3–5. The court 

relied on two related sources for that conclusion: (1) the 

SDA; and (2) the “hired-to-invent doctrine.” Neither 

source, we conclude, properly supports the conclusion of 

3 We have recognized that, in some circumstances, 

interests other than ownership may support Article III 

standing. See Shukh v. Seagate Tech., LLC, 803 F.3d 659, 

663 (Fed. Cir. 2015) (recognizing a “concrete and particularized reputational injury” apart from ownership); Chou, 

254 F.3d at 1359 (recognizing a “concrete financial interest” apart from ownership). But Mr. James has not 

alleged any benefit he would receive from being named as 

an inventor, or even as the sole inventor, separate from 

his claim to be the true owner of the ’638 patent. His 

standing therefore depends on his retention of ownership.

 
8 JAMES v. J2 CLOUD SERVICES, LLC

assignment or obligation to assign at this stage of the 

proceedings. 

B 

The district court concluded that “the SDA necessarily 

precludes plaintiff from retaining ownership of the patent 

rights.” James, 2016 WL 9450470, at *5. We disagree. 

Under the standards appropriate at this stage of the 

proceedings, which require that “the court construe[] all 

factual disputes in favor of” Mr. James, id. at *3, we 

cannot conclude that the SDA precludes Mr. James from 

retaining ownership rights in patents on his inventions—

either as itself an assignment or as a contract to assign. 

The Patent Act provides that patents and patent applications are “assignable in law by an instrument in 

writing.” 35 U.S.C. § 261. “Although state law governs 

the interpretation of contracts generally,” whether a 

contract “creates an automatic assignment or merely an 

obligation to assign” is a matter of federal law. DDB 

Techs., L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 

1284, 1290 (Fed. Cir. 2008); see Abraxis Bioscience, Inc. v. 

Navinta LLC, 625 F.3d 1359, 1364 (Fed. Cir. 2010); 

Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245, 1253 (Fed.

Cir. 2000). On the automatic-assignment side of the line 

is a “contract [that] expressly conveys rights in future 

inventions.” Abraxis, 625 F.3d at 1364. On the other side 

of the line is a “mere promise to assign rights in the

future.” Id. at 1365. “In construing the substance of [an 

alleged] assignment, a court must carefully consider the 

intention of the parties and the language of the grant.” 

Israel Bio-Eng’g Project v. Amgen, Inc., 475 F.3d 1256, 

1265 (Fed. Cir. 2007) (citing Vaupel Textilmaschinen KG 

v. Meccanica Euro Italia SPA, 944 F.2d 870, 874 (Fed. 

Cir. 1991)).

The SDA is amenable to the construction that it does 

not assign, or promise to assign, patent rights that would 

otherwise accrue to Mr. James as an inventor. The dis-
JAMES v. J2 CLOUD SERVICES, LLC 9

trict court relied in its ultimate analysis on the SDA’s 

preamble, which states that the contract set the terms on 

which GSP “will develop software solutions for the exclusive use of JFAX Communications.” J.A. 53; see James, 

2016 WL 9450470, at *5 (rejecting Mr. James’s position 

because it “would, for example, enable plaintiff to license 

the rights in contravention of JFAX’s exclusive use”). But 

that language is not itself a conveyance of any rights and, 

in any event, does not clearly go beyond GSP-developed 

specific software products to encompass also any underlying patentable methods embodied in the specific code. It 

can be read as indicating that it is only the specific code 

that will be for JFAX’s exclusive use.

The key SDA Section 3 is open to the same interpretation. It provides: “JFAX shall become the sole owner of all 

code and compiled software solutions as described in this 

Agreement as soon as it is developed, and GSP shall 

assign to JFAX all copyright interests in such code and 

compiled software.” J.A. 55. It refers to “code,” i.e., sets 

of instructions, and “compiled software solutions,” i.e., the 

machine-readable (“compiled”) translation of the source 

code that was written in a computer language. See, e.g., 

Blueport Co., LLC v. United States, 533 F.3d 1374, 1377 

n.1 (Fed. Cir. 2008) (explaining terminology of “source 

code” being “compiled” into “object code”); Syntek Semiconductor Co., Ltd. v. Microchip Technology Inc., 307 F.3d 

775, 779 (9th Cir. 2002) (same). Indeed, the “compiled 

software solutions” language suggests that “software 

solutions”—the term in the SDA preamble—itself refers 

to the actual code, not underlying patentable methods. It 

is standard usage to speak of compiling the former, 

whereas we have been shown nothing to suggest a common, or even acceptable, usage of “compiling a method.” 

The same conclusion applies to SDA Section 2, which 

provides: “You agree to develop original software solutions, write original software routines, carry out testing 

and otherwise provide technological solutions for the 
10 JAMES v. J2 CLOUD SERVICES, LLC

JFAX system, and be responsible for the creation, execution and delivery to JFAX of a series of aspects of those 

solutions.” J.A. 54. That language can be understood as 

referring only to the actual software and hardware delivered to JFAX, not to ownership rights in any patentable 

methods or systems invented in creating such products. 

Further support for Mr. James’s view of the SDA is 

found in the SDA’s express reference to copyrights and 

complete silence about patents. As already noted, SDA 

Section 3, after stating that JFAX will become the owner 

of “all code and compiled software solutions,” adds that 

“GSP shall assign to JFAX all copyright interests in such 

code and compiled software.” Copyright extends only to 

the expression in source code or its compiled version, i.e., 

object code, not to the underlying (potentially patentable) 

methods. See, e.g., Oracle America, Inc. v. Google Inc., 

750 F.3d 1339, 1354–55 (Fed. Cir. 2014); Sony Computer 

Entertainment, Inc. v. Connectix Corp., 203 F.3d 596, 599, 

602, 605 (9th Cir. 2000); Atari Games Corp. v. Nintendo of 

Am. Inc., 975 F.2d 832, 839–40 (Fed. Cir. 1992). Moreover, the operative complaint alleges, with support from 

documents attached to the complaint, that Mr. James 

actually executed assignments of copyrights in the specific 

software for the three systems furnished to JFAX. There 

is nothing comparable for patents, which are not mentioned at all in the SDA. 

We have discussed SDA provisions that either the district court addressed or about which the parties have 

made substantial arguments concerning the SDA’s express contract terms. On that basis, we conclude that the 

SDA can, and therefore at the present stage of this case 

must, be construed in Mr. James’s favor. So construed, 

the SDA does not deprive Mr. James of constitutional 

standing. 
JAMES v. J2 CLOUD SERVICES, LLC 11

C 

The district court’s second basis for its decision, which 

is related to the first, likewise does not support the Rule 

12(b)(1) dismissal for lack of standing. The court invoked 

the “hired to invent” doctrine of United States v. Dubilier 

Condenser Corp., 289 U.S. 178, 187 (1933), and Standard 

Parts Co. v. Peck, 264 U.S. 52, 59–60 (1924). In accordance with those decisions, we have summarized the 

doctrine as recognizing that an employer may “claim an 

employee’s inventive work where the employer specifically 

hires or directs the employee to exercise inventive faculties.” Teets, 83 F.3d at 407 (citing Dubilier, 289 U.S. at 

187, and Standard Parts, 264 U.S. at 59–60). In certain 

circumstances involving employment, we have explained, 

“the employee has received full compensation for his or 

her inventive work.” Id. 

Because this “hired-to-invent” rule is “firmly grounded in the principles of contract law,” Banks v. Unisys 

Corp., 228 F.3d 1357, 1359 (Fed. Cir. 2000), its applicability depends on the particular relationship between the 

“employee” and “employer” in a given case where the rule 

is invoked. We have said that “[t]o apply this contract 

principle, a court must examine the employment relationship at the time of the inventive work to determine if the 

parties entered an implied-in-fact contract to assign 

patent rights.” Teets, 83 F.3d at 407; see also Gellman v. 

Telular Corp., 449 F. App’x 941, 945 (Fed. Cir. 2011) 

(explaining that the hired-to-invent “doctrine is expressly 

equitable, and creates only an obligation for the employee 

to assign to his employer”) (citing Melin v. United States, 

478 F.2d 1210, 1213 (Ct. Cl. 1973)). And we have added 

that, “[a]s a matter of common law, after the Supreme 

Court’s decision in Erie Railroad v. Tompkins, 304 U.S. 64

(1938), state contract principles provide the rules for 

identifying and enforcing implied-in-fact contracts.” 

Teets, 83 F.3d at 407 (applying Florida law).
12 JAMES v. J2 CLOUD SERVICES, LLC

Whether the doctrine is viewed as a matter of federal 

law or a matter of the state law of implied-in-fact contracts, its applicability in a given case depends on the 

terms of the contractual relationship of the parties. See 

Dubilier, 289 U.S. at 187 (explaining that the implied 

assignment of or promise to assign ownership rights

“spring[s] from the contract of employment”). Here, there 

is no dispute that the asserted “employment” is based on 

the SDA. That contract governed the terms of JFAX’s 

acquisition of the software-development services at issue.

This case involves a distinctive fact not present in the 

authorities j2 and AMT cite in support of their hired-toinvent argument. Specifically, we have been directed to 

no decision applying the hired-to-invent principle where 

the underlying agreement for engagement of services was 

between two artificial legal entities and to which the 

inventor was not personally a party. Here, it was the 

partnership GSP, not alleged inventor Mr. James, that 

was engaged by JFAX through the SDA. As the case is 

presented to us, although the operative complaint does 

not carefully attend to the distinction between Mr. James 

and GSP, it appears from the SDA, on which j2 and AMT 

rely, that Mr. James was not himself an “employee” of 

JFAX or personally hired by JFAX.

Regardless, the SDA does not support a hired-toinvent inference so as to deny standing here. j2 and AMT 

rely on the terms of the SDA to argue that GSP was 

engaged, and thus Mr. James was hired, to invent, creating an implied contract to assign resulting inventions. 

The problem with this argument is essentially the same 

as the problem we have already identified as defeating 

the SDA-contract argument for Rule 12(b)(1) dismissal. 

Based on the provisions and arguments presented to us, 

the SDA is readily capable of being read not to assign or 

to promise to assign the patent rights at issue. Because 

the SDA largely or even wholly defines the terms of 

JFAX’s alleged “hiring” of Mr. James (actually of GSP), 
JAMES v. J2 CLOUD SERVICES, LLC 13

there is at least a factual dispute about any implied

assignment or promise to assign. And that conclusion, 

though sufficient on its own case-specific terms, may be 

further supported by cases recognizing a general legal 

principle that tightly limits the finding of an implied-infact contract where an express contract governs the 

parties’ relationship. See Atlas Corp. v. United States, 

895 F.2d 745, 754 (Fed. Cir. 1990); Chase Manhattan 

Bank v. Iridium Afr. Corp., 239 F. Supp. 2d 402, 409 (D. 

Del. 2002) (citing Atlas, 895 F.2d at 754). Accordingly, it 

was improper to dismiss the case under Rule 12(b)(1) for 

lack of standing based on the hired-to-invent principle.

III

For the foregoing reasons, we reverse the district 

court’s order dismissing Mr. James’s claims for lack of 

jurisdiction. We remand the case for further proceedings.

Costs awarded to appellant. 

REVERSED AND REMANDED