Source: https://www.patentdocs.org/inventorship/
Timestamp: 2019-04-19 10:37:02+00:00

Document:
Inventorship, particularly assertion of proper inventorship, has a unique place in U.S. patent law. This is based in large part on the language of Article I, Section 8, Clause 8 of the U.S. Constitution, which gives Congress the power to grant patents "to Inventors." Ample evidence of the primacy of inventorship can be found in the Supreme Court's decision in Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc., where the Court vitiated the University's interests in an economically important patent (using the polymerase chain reaction, PCR, to detect HIV in patients treated with anti-AIDS drugs to measure the effectiveness of treatment) based on a mistake by a naïve graduate student at the behest of Cetus, the company that developed PCR. Indeed, there was a time when misjoinder of invention (the error of naming a person as an inventor who is not an inventor) or nonjoinder (the error of omitting an inventor) could render a patent invalid. This draconian consequence was ameliorated over time; the standard was changed over 30 years ago to permit correction of inventorship in granted patents provided that there was no deceptive intent in the misjoinder or nonjoinder (35 U.S.C. § 256). Even this requirement was loosened by the America Invents Act, which amended relevant sections of Title 35 to no longer require a lack of deceptive intent (see "The Disappearance of Deceptive Intent in S. 23").
These considerations were the basis for the Federal Circuit's decision last week in CODA Development s.r.o. v. Goodyear Tire & Rubber Co. overruling the District Court's grant of Defendant Goodyear's motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). The case involved Plaintiff CODA development's complaint in pursuit of a direction by the Court for the Patent and Trademark Office to correct the inventorship of U.S. Patent Nos. 8,042,586; 8,235,081; 8,322,036; 8,381,784; 8,550,137; 8,573,270; 8,695,661; 8,944,126; 8,857,484; 8,746,306; 8,381,785; and 8,113,254. The facts set forth in the Federal Circuit opinion are that CODA's CEO, Frantisek Hrabal invented self-inflating tire (SIT) technology and Goodyear approached CODA, expressing an interest in the SIT technology. Several meetings ensued under a nondisclosure agreement (NDA) where "Coda shared novel, proprietary, and confidential information concerning its SIT technology, including the placement of the tire's pump tube, the design of the pressure management system, the efficiency of the leakage compensation system, and the air passageway/interface between the exterior and interior of the tire," but after some time Goodyear apparently lost interest in the technology. As part of one of these meetings, Goodyear representatives took photographs of CODA's tires in breach of the NDA.
Thereafter, CODA and Mr. Hrabal were informed (from a former Goodyear employee) that the company had used CODA's SIT technology to develop its own self-inflating tires and that the company had filed patent applications based on their copying of CODA's technology as disclosed in the meetings. Over a four year period, the patents set forth above were granted to Goodyear inventors and assigned to the company. CODA's complaint sought changing inventorship of the '586 patent to name Mr. Hrabal as inventor and go delete the Goodyear inventors. Regarding the remainder of the patents, CODA asked the Court to add Mr. Hrabal as an inventor. The complaint also contained a claim for misappropriation of trade secrets.
Goodyear filed its motion to dismiss based on an earlier Hrabal filing and for failure to adequately describe the invention purportedly improperly obtained by Goodyear based on CODA's disclosure, and that the trade secret misappropriation claim was barred by the relevant statute of limitations. Goodyear also responded to CODA's opposition to its motion by asserting a Hrabal publication disclosing the invention, which proffer CODA argued the District Court should disregard because it was offered for the first time in Goodyear's reply brief. The District Court denied CODA's motion to strike the reference (denoting the reference as a public disclosure that was within the Court's purview to judicially notice) and granted Goodyear's motion to dismiss. The reasoning for granting the motion to dismiss focused on the Hrabal article, which the Court found disclosed all the elements in the Goodyear patents that CODA alleged were the basis for the change in inventorship claims. In addition, the Court found that Goodyear's failure to communicate with CODA after the initial meetings "undermined the necessary showing of collaboration because it alleged that Goodyear stopped communicating with CODA" after the initial meetings. Finally, the District Court found that CODA's trade secret misappropriation claims were time-barred by the statute of limitations, because the alleged sequence of events triggered a duty to investigate that CODA did not pursue until the statute had run.
Also important to the Federal Circuit's decision on appeal, CODA moved the District Court under Federal Rule of Civil Procedure 59(e) to amend the judgment and leave to file an amended complaint, which the District Court denied. This appeal followed.
The complaint describes Goodyear's prior failures with inflation technology. It also describes two meetings with Goodyear representatives—both arranged at Goodyear's initiative and attended by Mr. Benedict, Goodyear's point-person on SIT technology. Goodyear sought technical information from Coda at both meetings. And in the second meeting, Mr. Benedict requested that he and his team be allowed to spend some time alone with Coda's functional prototype, during which he photographed it without permission. After this second meeting, Goodyear stopped communicating with Coda for a time. When Coda reached out to Mr. Benedict attempting to restart communications, Mr. Benedict responded that a meeting would be premature.
Yet the next month, in preparation for Goodyear's own internal meeting, a Goodyear employee independently contacted Coda to inquire about the status of Coda's SIT technology. Correspondence with that employee revealed that Mr. Benedict responded in an "oddly vague" way when asked whether Goodyear had looked into Coda's invention. Also that month, Goodyear applied for the first in a series of patents covering assemblies and methods concerning self-inflating tires, with claims covering the allegedly novel, proprietary, and confidential information Coda disclosed to Goodyear. Years later, after Coda deemed the Goodyear endeavor a bust, Coda received an unsolicited email from the former Goodyear employee, who said that Goodyear copied Coda's SIT technology.
These facts provided sufficient support for the inferences that Mr. Hrabal had conceived the invention claimed in the '586 patent prior to the named inventors and had made "a more-than-insignificant contribution to the conception" of at least one claim of the Alleged Jointly Invented Patents. The opinion finds error by the District Court in "a procedural error," i.e., considering material (the Hrabal publication) outside the pleadings (citing Sixth Circuit precedent and Fed. R. Civ. Pro. 12(d)), which requires the court to convert a motion to dismiss into a summary judgment motion, in order to give the non-movant "a reasonable opportunity to present all pertinent material." As part of this determination, the panel noted that items taken into consideration under "judicial notice" must "not [be] subject to reasonable dispute," circumstances not present here. "Whether the Hrabal article actually disclosed those alleged novel trade secrets was a reasonably (indeed, hotly) disputed factual issue—one outside any judicial-notice exception to the general rule requiring conversion, and one that should not have been resolved adversely to Plaintiffs on a motion to dismiss," according to the opinion. In addition, in a footnote the panel further noted that reliance on the Hrabal reference "constituted an inference adverse to Plaintiffs when there were other reasonable inferences to draw in their favor."
The Federal Circuit also held the District Court erred in dismissing CODA's trade secret misappropriation claim for being time-barred. Stating that the inquiry involved in the "discovered or by the exercise of reasonable diligence should have discovered" their claim was "fact specific," the panel faulted as deficient Goodyear for "ask[ing] us to infer, from the complaint itself, that Plaintiffs should have begun investigating in 2009 and that, had they done so, they would have discovered the application leading to the '586 patent as of its publication date eighteen months later," and that "the only reasonable inference to be drawn is against Plaintiffs" (emphasis in opinion). The Federal Circuit held that CODA could have reasonably inferred that Goodyear had just lost interest in the technology, on the other hand, and that Goodyear would honor the NDA. Also, because pleading statute of limitations is an affirmative defense, the District Court further erred because CODA was not obliged to plead a "lack" of an affirmative defense in order to state a claim.
Finally, the panel held that the District Court erred in not permitting CODA to file its amended complaint. The opinion cites Foman v. Davis, 371 U.S. 178, 181–82 (1962), for the principle that "in the absence of any apparent reason (e.g., undue delay, bad faith or dilatory motive, repeated failure to cure deficiencies by previously allowed amendments, undue prejudice to the opposing party, futility), leave to amend should be freely given, as Rule 15 requires."
And the relevance of the change in the law referenced in the prelude to the discussion of the decision herein? Clearly there is no possibility for the named inventors to aver that their inventorship was without deceptive intent under the facts as set forth in this opinion. This outcome illustrates the consequence of Congress deciding that having the properly named inventors is of utmost importance under U.S. patent law.
Last week, in Pappalardo v. Stevins, the Federal Circuit affirmed-in-part, vacated-in-part, and remanded a decision by the U.S. District Court for the Middle District of Florida granting a motion to dismiss filed by Defendant-Appellee Samantha Stevins, in which Ms. Stevins sought to dismiss an amended complaint filed by Plaintiff-Appellant Michael Pappalardo for lack of subject matter jurisdiction. Mr. Pappalardo had filed suit against Ms. Stevins asserting state law claims of fraud and negligent representation and seeking a declaratory judgment naming him as sole inventor of U.S. Patent Application No. 15/275,597.
As alleged in Mr. Pappalardo's complaint, he met Ms. Stevins at a pharmaceutical products trade show, where he disclosed to her a product related to liquid and solid cannabis delivery systems. As also alleged in the complaint, Ms. Stevins indicated that she had access to funding from a network of investors for the product, and the two entered into a business relationship to commercialize the product. The complaint further alleges that Ms. Stevins recommended filing the '597 application, which names Ms. Stevins as a joint inventor. Mr. Pappalardo's complaint further alleges that Ms. Stevins attempted to independently exploit his technology, and he responded by filing suit against her asserting claims of fraud and negligent representation and seeking declaratory judgment of sole inventorship. The District Court dismissed the declaratory judgment claim on the grounds that it lacked jurisdiction to hear claims for correction of inventorship for a pending patent application, and dismissed the state law claims on the grounds that they were contingent on the U.S. Patent and Trademark Office's determination on the '597 application.
On appeal, Mr. Pappalardo argued that the District Court erred in dismissing his claims because the District Court had both federal question and diversity jurisdiction over all three claims, and all three claims were pleaded with requisite specificity. With respect to Mr. Pappalardo's declaratory judgment claim, the Federal Circuit agreed with the District Court that the claim should be dismissed, albeit on different grounds. Rather than dismissing the declaratory judgment claim for lack of subject matter jurisdiction, as the District Court had done, the Federal Circuit determined that the claim should have been dismissed with prejudice for failure to state a claim for plausible relief pursuant to Rule 12(b)(6).
The Federal Circuit explained that although Mr. Pappalardo pleaded the request for declaratory judgment under Florida state law, asserting that Ms. Stevins falsely filed a declaration with the USPTO that she was a joint inventor on the '597 application and that he should be declared the sole inventor, "the 'true nature' of Mr. Pappalardo's inventorship claim is for relief pursuant to federal law, specifically 35 U.S.C. § 256." The Court therefore accepted that Mr. Pappalardo pleaded an action for correction of inventorship, and determined that "the District Court had subject matter jurisdiction over this claim '[b]ecause inventorship is a unique question of patent law,'" citing HIF Bio, Inc. v. Yung Shin Pharm. Indus. Co., 600 F.3d 1347, 1353 (Fed. Cir. 2010). Nevertheless, the Federal Circuit agreed with the District Court's dismissal of the declaratory judgment claim because the claim failed to allege a cause of action upon which relief can be granted. More specifically, the Federal Circuit noted that a § 256 claim for correction of inventorship does not accrue until the patent issues, and that there are no other private causes of action available to a litigant to challenge inventorship of a pending patent application. The Federal Circuit also noted that "[s]hould a patent issue from the '597 application, nothing prevents Mr. Pappalardo from seeking declaratory judgment relief on a correction of inventorship claim at that time," explaining, however, that "[a]t this time . . . Mr. Pappalardo's claim must be dismissed with prejudice pursuant to Rule 12(b)(6)." The Federal Circuit therefore vacated-in-part and remanded with instructions for the District Court to dismiss the declaratory judgment claim with prejudice.
As for Mr. Pappalardo's state law claims, the Federal Circuit noted that the District Court had determined that Mr. Pappalardo's assertion that his damages exceeded $75,000, based on the loss of his exclusive right to his invention, hinged on whether the USPTO issues the patent with Ms. Stevins as a named inventor, and the alleged damages were "speculative at best and contingent on a matter for which the [District] Court lacks the authority to consider." The Federal Circuit found no error in that conclusion.
The District Court had also determined that it lacked diversity jurisdiction over Mr. Pappalardo's state law claims. The Federal Circuit noted, however, that because the District Court had original jurisdiction over a federal question in the declaratory judgment claim, it could have exercised supplemental jurisdiction to hear the state law claims because they were so related to claims in the action that they formed part of the same case or controversy. The Federal Circuit also noted that because that authority is generally discouraged where a court has dismissed all claims over which it has original jurisdiction, and because the District Court stated that it was "hard-pressed to find that [Mr.] Pappalardo has adequately plead[ed] damages and causation—both elements needed to state an actionable claim for fraud and negligent misrepresentation—with the requisite particularity," the Federal Circuit would interpret that statement as a decision declining to exercise supplemental jurisdiction over the state law claims. The Federal Circuit therefore affirmed the District Court's dismissal of the state law claims.
After reflecting upon the events of the past twelve months, Patent Docs presents its tenth annual list of top patent stories. For 2016, we identified twenty stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants. Today, we count down stories #20 to #16, and then in the coming week, we will work our way towards the top stories of 2016. As with our other lists (2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look. As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know. In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2016" on January 18, 2017 from 10:00 am to 11:15 am (CT). Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.
In February, the Federal Circuit affirmed the finding by the District Court for the Eastern District of Virginia that the U.S. Patent and Trademark Office properly calculated the Patent Term Adjustment of Pfizer's U.S. Patent No. 8,153,768. In calculating the PTA, the USPTO denied Pfizer 197 days between the time the Examiner issued a first restriction requirement and then, after the applicant noted that the Examiner had omitted claims 75, 76, and 103-106, issued a corrected restriction requirement. Noting that the applicant "could have taken direction for the classification [of the six omitted claims] from the fact that their respective independent claims were each included in the initial restriction requirement," the panel majority sided with the District Court and USPTO. Writing in dissent, Judge Newman countered that "[t]he panel majority erroneously holds that term adjustment is not available because the applicant, not the PTO, spotted the PTO's error," stating that "[w]hether the examiner's actions 'were outside the normal 'give-and-take process' of patent prosecution,' should not turn on who recognized the error."
In 2015, the U.S. Patent and Trademark Office announced the launch of a comprehensive and enhanced patent quality initiative, indicating that its efforts would be aimed at improving patent operations and procedures, enhancing the customer experience, and improving existing quality metrics. In 2016, the Office continued its efforts to improve patent quality through the Office's Enhanced Patent Quality Initiative. In response to an invitation to stakeholders to submit patent quality-related topics that could be used as case studies, the Office selected six topics for the case study pilot program in May. In April, the Office announced that it was in the process of designing new patent quality metrics for use in FY2017 and requested comments from stakeholders regarding the new metrics. The Office also held a Patent Quality Community Symposium at its headquarters in Alexandria, VA in April, and offered several webinars in its patent quality chat webinar series. In November, the Office issued a request for public feedback regarding its reevaluation of examination time goals, and announced that it would be holding five roundtables on examination time goals (the last of which will be held on January 11 in San Jose, CA).
CRISPR (an acronym for Clustered Regularly lnterspaced Short Palindromic Repeats), which is part of a system for altering chromosomal sequences in situ in a cell in combination with a bacterially derived protein called Cas9, was hailed as a "Breakthrough of the Year" for 2015. CRISPR provides a mechanism for inserting or deleting specific DNA sequences using CRISPR-associate targeting RNAs and the Cas9 RNA-guided DNA endonuclease enzyme. Given the commercial potential of this method, patenting is an obvious concern and, as it turned out, more than one group of inventors has filed patent applications on the reagents, methods, and cells produced or used to produce CRISPR modifications. Because these applications were filed prior to March 16, 2013, the dispute regarding who was the first to invent will be resolved in an interference. On January 11, 2016, the USPTO declared Interference No. 106,048, naming Feng Zhang and his colleagues, the named inventor of the Broad Institute/MIT's patents, as the Junior Party, and Jennifer Doudna and her colleagues at UC/Berkeley as Senior Party. Oral argument in the interference was held last month, so the dispute could reach a resolution in 2017 and make a return trip to our list of top stories next year.
Earlier this year, we noted that Amgen has been the reference product sponsor for many biosimilar applications, and as a result has been the Plaintiff in many of the litigations that have been based on the provisions of the Biosimilar Price Competition and Innovation Act ("BPCIA"). It was therefore noteworthy that Amgen once again became involved in a BPCIA litigation -- but this time as the aBLA filer. In August, AbbVie sued Amgen pursuant to the BPCIA and 35 U.S.C. § 271(e)(2)(C) because Amgen submitted an application to the FDA to market a biosimilar version of adalimumab, AbbVie's anti-TNFα therapeutic antibody, HUMIRA®. Prior to the filing of AbbVie's complaint, it was not known whether the parties had been engaging in the BPCIA's "patent dance," because the process consists of various disclosures and exchanges, none of which are meant to be publicly available. In September, the FDA approved Amgen's application to market Amjevita (adalimumab-atto) -- which marked the fourth biosimilar approved by the FDA pursuant to the BPCIA. Notwithstanding the approval, Amgen indicated in its counterclaims and answer to AbbVie's complaint that it would not begin commercial marketing of its biosimilar before at least one of the patents identified by AbbVie had expired on December 31, 2016.
In May, President Obama signed the Defend Trade Secrets Act of 2016 ("DTSA") into law, creating a new Federal cause of action for misappropriation of trade secrets. The new law is a significant expansion of Federal intellectual property law, and brings with it significant benefits -- but also new responsibilities -- for intellectual property owners and employers. And in this era of narrowed subject matter eligibility for patenting, the DTSA may provide enough of an incentive for intellectual property owners to keep more information as trade secrets. Prior to the enactment of the DTSA, trade secret owners could protect their rights under state law or a patchwork of Federal laws that provided criminal and civil sanctions for interstate trade secret misappropriation or misuse of computerized data, such as the Economic Espionage Act ("EEA") and the Computer Fraud and Abuse Act ("CFAA"). The DTSA includes three key provisions that intellectual property owners should know about: (1) the Federal civil cause of action for misappropriation of trade secrets; (2) an ex parte seizure provision that can be invoked in extraordinary circumstances; and (3) whistleblower protections that preempt criminal and civil liability under either Federal or state law, and place certain new obligations upon employers.
In a nonprecedential opinion issued earlier today, the Federal Circuit invalidated claims under 35 U.S.C. § 101 that had survived the District Court in LendingTree, LLC, v. Zillow, Inc., Nextag, Inc., & Adchemy, Inc. This case is eerily similar both in terms of subject matter and outcome as the Federal Circuit's recent decision in Mortg. Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314, 1318 (Fed. Cir. 2016). Both cases involved loan application software patents, and both had claims held invalid under 35 U.S.C. § 101. The Federal Circuit's analysis here, by comparing claims-in-suit being challenged under section 101 to prior claims held invalid, continues to be the strongest evidence considered by the Court when analyzing patentable subject matter.
LendingTree filed suit against Zillow and other defendants in the U.S. District Court for the Western District of North Carolina, asserting claims of U.S. Patent Nos. 6,385,594 and 6,611,816 (the '816 patent is a continuation of the '594 patent, and thus, the patents in suit share a common specification). Zillow moved for summary judgment of invalidity under 35 U.S.C. § 101 with respect to the asserted claims of both patents, but the District Court delayed ruling on the motion until after trial, at which point the Court orally denied it from the bench. Following trial, the jury returned a verdict finding that Zillow and the other defendants did not infringe the asserted claims of the patents in suit and that all claims of the patents in suit were invalid for improper inventorship. All of these issues were appealed, respectively.
The only substantive issue with respect to the claims that the Federal Circuit resolved on appeal was the patentability under 35 U.S.C. § 101. This rendered other issues moot.
The patents in suit relate to a process for coordinating loans on a loan processing computer over the Internet. According to the '594 patent, which was filed in May 1998, traditional methods of applying for a loan were tedious and time consuming because there was no way to apply without physically going to or calling each lender and filling out an application or credit qualification form. The inventors sought to combine the vast resources and speed of the Internet with additional knowledge of various lending institution's selection criteria to create a simple mechanism whereby an Internet user can submit a single credit application to a plurality of lending institutions who then make offers to the customer via the Internet. The loan coordination process of the '594 patent includes ten general stages. Independent claim 1 of the '594 patent is representative of the claimed subject matter, and is reproduced below.
k) transmitting the at least one Internet user's decision to at least one lending institution corresponding with a positive credit decision so that said Internet user can obtain credit or a loan from one of said lending institutions associated with a match of said credit data, whereby said lending institutions associated with a match of said credit data compete with each other for business with the Internet user.
Abstract Idea—Zillow contended that the patents in suit are directed to the idea of "comparing credit information to lending criteria" (i.e., a "credit application clearinghouse"). In Zillow's view, that idea represents a fundamental economic practice not meaningfully different from practices previously found by the Supreme Court to be abstract and is thus ineligible for patenting under § 101.
The Federal Circuit found that on its face, claim 1 is directed to an abstract idea; namely, a loan-application clearinghouse or, more simply, coordinating loans. The Federal Circuit found similarities of these concepts to those of risk hedging in Bilski, and intermediated settlement in Alice since each is something long prevalent in our financial system. The Federal Circuit found that the patents in suit use a computer program on a loan-processing computer to organize the process to be of no consequence because the use of a third-party intermediary (or clearing house) is also a building block of the modern economy.
The Federal Circuit noted that within Mortg. Grader, similar claims were also held to be directed toward abstract ideas (finding claims directed to the idea of "anonymous loan shopping" to be abstract).
Inventive Concept—The Federal Circuit next held that claim 1 does not recite any elements that individually, or as an ordered combination, transform the abstract idea of coordinating loans into a patent-eligible application of that idea. The Federal Circuit thought, at best, claim 1 describes the automation of a fundamental economic concept through the use of generic-computer functions.
LendingTree contended that the particular limitation relating to "simultaneous competition" amounts to an inventive concept sufficient to render the claims patent eligible. But the Federal Circuit noted that similar claims with similar limitations have been addressed and found to lack an inventive concept.
In Mortg. Grader, the representative claim of the patents at issue required a computer system that was configured to enable a borrower "to search [a] database to identify a set of loan packages" from a plurality of lenders and "to compare the loan packages within the set," and that also was configured "to display to the borrower an indication of a total cost of each loan package in the set." This was summarized as multiple lenders competing simultaneously for the potential borrower's business. In Mortg. Grader, the claims were found to not include an inventive concept.
Similarly, here, the Federal Circuit found that using a generic computer to display a "plurality of positive credit decisions," as recited in claim 1 of the '594 patent, is not meaningfully different from using a generic computer to display competing loan packages or to issue instructions. Consequently, the Federal Circuit stated that, like the claims in Mortg. Grader and Alice, claim 1 is patent ineligible because it does nothing more than facilitate the claimed loan-application process using generic technology.
In addition to comparing the claims to those previously held invalid under section 101, the Federal Circuit searched for and did not find any technological problem solved by the claims. Rather, the claims were found to merely provide a generic, technological environment (i.e., computers and the Internet) in which to carry out the abstract idea of coordinating loans. Likewise, the Federal Circuit further noted that the claims are not directed to improvements in computer-related technology (as in Enfish). Simply speeding up the loan-application process by enabling borrowers to avoid physically going to or calling each lender and filling out an application was an insufficient technological improvement, in the eyes of the Federal Circuit, so as to satisfy the "inventive concept" requirement of the section 101 analysis.
Accordingly, the Federal Circuit found that the asserted claims of the patents in suit are directed to an abstract idea and do not present an "inventive concept," and thus, are directed to ineligible subject matter under 35 U.S.C. § 101. The District Court's denial of Zillow's motion for summary judgment was reversed.
At trial, the jury found all claims of the patents in suit invalid for improper inventorship. The conclusion on the § 101 issue -- that some claims of the '594 patent and the '816 patent are invalid -- still leaves a number of claims intact, and so the Federal Circuit evaluated the inventorship issue.
During trial, LendingTree moved to correct inventorship of the patents in suit pursuant to 35 U.S.C. § 256. The PTO issued Certificates of Correction (adding James F. Bennett, Jr. as a named inventor) for the patents in suit. In LendingTree's view, the PTO's actions rendered moot the inventorship dispute.
The Federal Circuit agreed, and remanded to permit LendingTree, if it chooses to do so, to file a motion under Fed. R. Civ. P. 60(b) to vacate the judgment of invalidity for improper inventorship with respect to the remaining claims of the patents in suit.
The Federal Circuit, in a split decision, affirmed denial of motions to dismiss on jurisdictional grounds and Federal Court joinder rules in University of Utah v. Max-Planck-Gesellschaft zur Forderung der Wiessenschaften e.V et al., a decision likely to be reviewed by the Supreme Court (if only because the case implicates the Court's original jurisdiction over disputes between the states under Article III of the Constitution).
The case arose as an inventorship dispute over the "Tuschl" patents, U.S. Patent Nos. 7,056,704 and 7,078,196. The University of Utah ("UUtah") was plaintiff, and defendants included the assignees and licensees of the patents, including the Max-Planck-Gesellschaft zur Forderung der Wiessenschaften e.V., Max-Planck-Innovation GmbH, Whitehead Institute for Biomedical Research, Massachusetts Institute of Technology, Alnylum Pharmaceuticals, Inc., and the University of Massachusetts ("UMass"). As set forth in the Federal Circuit's majority opinion, Dr. Thomas Tuschl, from the University of Massachusetts, filed for and obtained the patents-in-suit. Dr. Brenda Bass, of the University of Utah, claimed that she disclosed the inventions claimed in the Tuschl patents at professional conferences attended by Dr. Tuschl. UUtah alleges in the suit that Dr. Bass is the sole or at least a joint inventor and, after the defendants declined to correct inventorship by agreement UUtah filed suit under 35 U.S.C. 256 (as well as various state law claims).
Defendant U Mass argued in a motion to dismiss that the Supreme Court has original jurisdiction because the dispute was between two States (through their Universities), citing Article III, § 2, cl. 2 of the Constitution: "In all Cases . . . in which a State shall be Party, the [S]upreme Court shall have original Jurisdiction." In response, UUtah substituted four officials for UMass to avoid the original jurisdiction issue. UMass then argued the case should be barred by sovereign immunity, and that UMass was an indispensible party (as an assignee).
District Court Judge Patti Saris denied defendants' motions to dismiss and defendants appealed. The court based its denial of UUtah's original jurisdiction argument under Connecticut ex rel. Blumenthal v. Cahill, 217 F.3d 93, 98 (2d Cir. 2000) because, first, UUtah had amended its complaint to recite university officials rather than Massachusetts, and that correction of inventorship was not a "core sovereign interest" that rose to a dispute between the States. The District Court also dismissed the argument that UUtah had failed to name UMass as an indispensible party because "neither UMass nor Defendants would be prejudiced by a judgment rendered in UMass's absence because UMass's interests would be adequately represented by the existing defendants, including the Named Officials" and that the remedy -- ordering the U.S. Patent and Trademark Office to correct inventorship -- would provide "adequate relief" with or without UMass.
The Federal Circuit affirmed, in a decision by Judge Reyna joined by Judge Wallach, and a dissent by Judge Moore. The majority addressed the issues squarely: whether inventorship disputes involving state university-assigned patents could properly be brought in federal court (instead of the Supreme Court) and whether the suit should be barred under sovereign immunity. In affirming the District Court, the Federal Circuit majority almost ensured that the Supreme Court will have another opportunity to correct Federal Circuit patent jurisprudence. Additionally, the majority held that the District Court did not grant defendants' motion to dismiss for failure to join an indispensible party because UMass was not indispensible in the action.
The majority begins its opinion recognizing the distinction between private assignees and the state, which "typically enjoys sovereign immunity." This immunity does not extend to suits brought by one state against another, however, and States can sue individual citizens of other States without raising sovereign immunity issues with the State in which an individual defendant resides. This is not the typical case, according to the Court, because there are States in both sides of the dispute.
The defendants raised three issues. The first is jurisdictional: according to defendants, the District Court did not have jurisdiction because a dispute between the States implicates the Supreme Court's original (and as noted by the majority, exclusive (28 U.S.C. § 1251(a)) jurisdiction. This question the majority considers under the law of the regional (here, First) Circuit, which reviews decisions on motions to dismiss de novo. Second, defendants argue that UMass is entitled to sovereign immunity as an "arm" of the State. The question of whether Massachusetts has waived its immunity is a question of Federal Circuit law according to the majority, citing Regents of the Univ. of N.M. v. Knight, 321 F.3d 1111, 1124 (Fed. Cir. 2003), which review is also de novo. Finally, defendants argued that UMass is an indispensible party and UUtah could not bring suit against the four University officials under Fed. R. Civ. Pro. 19(b), a question that the Court says is a matter to regional circuit law that in the First Circuit is decided under an abuse of discretion standard.
Having explicated the procedural niceties, the majority turned to the merits. On the issue of original jurisdiction, the Court affirmed based on its determination that UMass is not a real party in interest. Thus, the question for the majority was whether UUtah's suit is against the State of Massachusetts or individuals residing in Massachusetts (where the Supreme Court does not have original or exclusive jurisdiction under § 1251(b)(3)). Having made this distinction based on the identity of the parties, the majority somewhat incongruously shifts to a discussion on the weight of the merits of the case before them: "[w]hether original jurisdiction is appropriate depends upon 'the seriousness and dignity of the claim,' whether the 'named parties' have another forum 'where appropriate relief may be had,' and whether the case raises 'serious and important, federalism concerns," citing Illinois v. City of Milwaukee, Wis., 406 U.S. 91, 93-94 (1972); Wyoming v. Oklahoma, 502 U.S. 437, 451 (1992) and Mississippi v. Louisiana, 506 U.S. 73, 77 (1992). The majority also relies on the Illinois case for the proposition that it is appropriate for them to "look behind the named parties and determine the real party in interest" in making their ruling. The Supreme Court jurisdictional standard is that the state is "the real, substantial party in interest" wherein judgment in the matter would "operate against" the State and thus "adequate relie[f] cannot be granted without it," citing Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89 (1984); Dugan v. Rank, 372 U.S. 609, 620 (1963); Cunningham v. Macon & Brunswick R. R. Co., 109 U.S. 446, 457 (1883); as well as Illinois. The opinion also refers to cases where the State has been an indispensible party, not surprisingly under circumstances not before the Court here, as well as cases where the State was not an indispensible party (Illinois again).
Nevertheless, the majority applied the rubrics from Cahill in deciding that Massachusetts was not a real party in interest here and thus that the case did not fall under the Supreme Court's original and exclusive jurisdiction under Article III § 2, cl. 2, because even if "the alleged injury was caused by actions specifically authorized by State law," the inventorship issue did not implicate a "core sovereign interest" because the state officials are only defendants under Counts in the complaint directed solely to correcting inventorship. The majority's reasoning was based on the inventorship issue being personal to the inventors, and because "States cannot be inventors," any question of inventorship is not a "core sovereign interest." Additionally, the majority asserted that the defendants (and Judge Moore in dissent) "confuse the issue" by implicating ownership into the dispute. While ownership and inventorship are "closely related," the majority refused to equate (without explanation) State ownership of patent rights with, for example, water rights or other property rights that do implicate "serious and important concerns of federalism" which would implicate a State's "core sovereign interests." The majority also distinguished the Cahill dissent's reasoning on the grounds that the relief here, correction of inventorship by the PTO, will not compel Massachusetts to act (or not to act); inventorship can be corrected by the PTO without any participation by Massachusetts. The majority conceded that Massachusetts would be a "proper" party if named but refused to acknowledge that it is an indispensible party because "[w]hile certain of UMass' interests may be 'more or less affected by the decision'" the majority apparently did not think they would be affected enough (applying an unenunciated standard).
The majority rejected the second issue, sovereign immunity, almost summarily: because this is not a suit "by citizens against a State" there was no sovereign immunity issue according to the majority, and thus no basis to reverse the District Court's refusal to dismiss.
(4) whether the plaintiff would have an adequate remedy if the action were dismissed for non-joinder.
These factors must be considered because there is "no per se rule that patent owners are automatically indispensable parties -- there is no patent-specific exception to Rule 19(b)" (a position that should garner approval from the Supreme Court if it considers the matter). The majority held that the District Court did not abuse its discretion in ruling against defendants motion to dismiss, despite the fact that the lower court relied on precedent not from the First but from the Federal Circuit relying on Ninth Circuit law (Dainippon Screen Mfg. Co. v. CFMT, Inc., 142 F.3d 1266 (Fed. Cir. 1998)) because in the majority's view the reasoning in the Dainippon case was consistent with First Circuit law. In Dainippon, a suit against a wholly owned subsidiary of a named party that was created as a holding company for the patent was permissible without joining the patent-owning subsidiary (over which the court did not have personal jurisdiction) because the subsidiary's interests were adequately represented by the named party. Here, the majority held that UMass's interests were adequately represented by the other defendants, who had even more to lose (i.e., their exclusive ownership interests in the Tuschl patents) by an adverse judgment than the State. Also, UMass had "handed sole and exclusive control of this suit over to Alnylam," a named party, so there was little or no prejudice to UMass or Massachusetts. The prospective judgment, a change of inventorship by the USPTO, could be adequately rendered in the State's absence, and the alternative remedy (the Supreme Court exercising original jurisdiction) is not certain (and according to the majority unlikely). In the face of these distinctions, the majority held that the District Court did not abuse its discretion in denying defendants' motion to dismiss for failure to join an indispensible party (albeit admonishing the District Court to resolve "fact intensive" questions regarding joinder under the circumstances that prevail when the base returns to the lower court for trial or further proceedings).
Judge Moore filed a vigorous dissent, based on her perception of error in the majority's determination that an inventorship dispute involving patents owned by state universities is not a "controversy between two or more States" and further for failing to hold a patent owner to be an indispensible party. As to the first question, Judge Moore argued that the District Court lacked jurisdiction in what is at root a dispute between Utah and Massachusetts through their respective administrative arms in their state universities. Judge Moore disagreed with the majority on the merits but her concerns are more importantly directed to institutional integrity. Specifically, the question of whether the issues at stake in the litigation are sufficient for the Supreme Court to decide to exercise its original and exclusive jurisdiction is a different question of whether that jurisdiction exists, which to Judge Moore is a question whose answer comes directly from the plain language of the statute (28 U.S.C. § 1251(a)). Even more important, however, is that whether the Court will exercise its jurisdiction is the prerogative of the Court, and lower courts cannot and should not act as gatekeepers in deciding which questions the Court will be able to consider based on the lower court's perception of whether the question involved a "core sovereign interest." And the fact that UUtah and Dr. Bass had alternative avenues (such as filing their own application(s) and provoking an interference) is not a sufficient "perceived injustice" to permit the Federal Circuit or any lower court to usurp the Supreme Court's prerogatives regarding the exercise of its original jurisdiction.
Judge Moore also rejected the majority's view that UMass is not an indispensible party, and discredited the majority's conclusion that a change in inventorship for the Tuschl patents would not affect the State's interests. In her view, the majority erred in straying from the Court's established precedent that patent owners are indispensible parties, and she disagreed with the majority's view that the other defendants can adequately represent the university's interests. After all, she noted, UMass like many other universities garner considerable revenues from licensing their patents, and a decision by the other parties, for example, to settle by permitting Dr. Bass to be named as a co-inventor (or with even more dire consequences to UMass's interest, as a sole inventor) would negatively impact UMass's ability or opportunity to benefit from patent ownership (at least as against UUtah and its licensees if Dr. Bass is a co-inventor, and as against all its present licensees if Dr. Bass were to be found to be the sole inventor).
Whether the Federal Circuit erred in holding that lower courts are responsible in the first instance for deciding whether the Supreme Court has original and exclusive jurisdiction in disputes between two or more States acting through their state universities.
In view of the Court's history with reviewing Federal Circuit decisions over the past decade, it does not take a Supreme Court scholar to compute the likelihood of the Court granting such a certiorari petition.
On March 28, the Federal Circuit in Rubin v. General Hospital Corp. affirmed judgment by the District Court for the District of Massachusetts dismissing the suit brought by Drs. Berish Rubin and Sylvia Anderson against The General Hospital Corporation requesting correction of U.S. Patent Nos. 7,388,093 and 7,407,756, which are assigned to General Hospital. The '093 and '756 patents are directed to genetic mutations that cause the inherited disease Familial Dysautonomia (FD), also known as Riley-Day Syndrome, and methods for detecting FD.
Drs. Rubin and Anderson at the Department of Biological Sciences of Fordham University, and Drs. Slaugenhaupt and Gusella at Massachusetts General Hospital, had been independently conducting research to determine the genetic mutations disclosed in the '093 and '756 patents. Drs. Rubin and Anderson identified two mutations in the gene encoding IkB kinase complex-associated protein that cause FD, and on December 20, 2000, submitted a paper describing these mutations to the American Journal of Human Genetics. When submitting the paper, Dr. Rubin asked the Editor of the journal to not send the paper to Dr. Gusella and his colleagues at Mass General for peer-review. On December 22, 2000, the Editor sent the abstract for the paper to Dr. Gusella. Dr. Gusella declined to review the full paper, and on December 28, 2000, Drs. Gusella and Slaugenhaupt submitted their own paper identifying the same two mutations to the same journal (as of October 2000, Dr. Gusella had noted that his group had identified 184 candidate mutations, and as of December 12, 2000, further noted that the responsible mutations had not yet been identified). Both papers were published in the January 22, 2001 issue of the journal.
On January 6, 2001, Drs. Gusella and Slaugenhaupt filed a provisional application describing the two mutations and claiming their diagnostic use. On January 17, 2001, Drs. Rubin and Anderson filed their own provisional application describing the two mutations and claiming their diagnostic use. The application filed by Drs. Gusella and Slaugenhaupt eventually resulted in the issuance of the '093 and '756 patents. During prosecution of their application, Drs. Rubin and Anderson decided not to initiate an interference in the U.S. Patent and Trademark Office, despite the examiner's suggestion that they do so.
Rather than initiate an interference, Drs. Rubin and Anderson filed suit against Mass General seeking correction of inventorship of the '093 and '756 patents under 35 U.S.C. § 256. They argued that Dr. Gusella's receipt of their abstract permitted Dr. Gusella's group to select and confirm the identity of the FD mutations and file their provisional patent application, and Drs. Rubin and Anderson asked to be substituted as the inventors of the '093 and '756 patents, or added as joint inventors. Granting Mas General's motion for summary judgment, the District Court held that the inventorship could not be changed under § 256 because there was no "collaboration" between the two teams of scientists, and that Drs. Rubin and Anderson could not be added as joint inventors because they did not meet the requirements of § 116 for joint invention. With respect to the correction of inventorship, the District Court also held that the complete substitution of inventorship is not a matter for § 256, but rather, is a claim for priority of invention of the subject matter, and priority should be resolved in an interference, not under § 256.
We agree with the district court that, whatever actions were taken after the Rubin/Anderson Abstract appeared uninvited on Dr. Gusella's desk, ultimately the dispute is of priority of invention; that is, which team was the first to conclusively identify the operative mutations. The district court recognized that even if Drs. Gusella and Slaugenhaupt had completed this identification before they saw the Rubin/Anderson identification, it would still be necessary to determine priority of invention in order to resolve the patent rights.
The panel, therefore, concluded that the District Court acted within its authority in directing the parties to the USPTO to determine priority of invention, and affirmed the District Court's judgment of dismissal.
On March 25, the Federal Circuit in Dawson v. Dawson affirmed a determination by the Board of Patent Appeals and Interferences that the University of California, San Francisco (UCSF) failed to establish sole conception by Dr. Chandler Dawson of the claimed inventions in two patents assigned to InSite Vision Inc. The case involved an interference between two patents, U.S. Patent Nos. 6,239,113 and 6,569,443, which name Dr. Dawson and Dr. Lyle Bowman as inventors and which are assigned to InSite, and an application which names Dr. Dawson as the sole inventor and which is assigned to UCSF. The patents and application ay issue are directed to a method for topically treating and preventing infections of the eye.
In 1997, at a meeting of the World Health Organization Alliance for the Elimination of Trachoma, Dr. Dawson, who was employed by UCSF, gave a presentation on the topical use of an antibiotic called azithromycin (at right) to control trachoma (a bacterial infection of the eye). A report of the meeting ("WHO Report") was subsequently released, which included a discussion of Dr. Dawson's presentation. A second document ("WHO document"), which may have been an outline of Dr. Dawson's presentation, provided a similar discussion of the presentation.
Shortly after the meeting, Dr. Dawson asked Dr. Kenneth Chern to enlist the assistance of Dr. Bowman, an employee at InSite (a company involved in the research and development of ophthalmic products), in creating a suitable ophthalmic medication with azithromycin that could be applied topically to the eye. Dr. Chern sent 100 mg of azithromycin to Dr. Bowman for formulating as a topical preparation. Three weeks later, after not hearing back from Dr. Bowman, Dr. Chern sent azithromycin to Dr. Charles Leiter, a pharmacist associated with the same foundation as Dr. Chern, to formulate as an ointment or suspension. Dr. Leiter prepared an ointment using a mineral oil and petrolatum carrier and containing 0.5% azithromycin by weight. Upon receipt, Dr. Chern applied some of the ointment to his own eye to determine whether it could be well-tolerated, and informed Dr. Dawson of the results of his experiment. Dr. Dawson subsequently left UCSF to work at InSite, and after joining InSite, was named with Dr. Bowman on a patent application that led to the issuance of the '113 and '443 patents.
0.1 to 10% of a polymeric suspending agent which is a water-swellable water-insoluble cross-linked carboxy-vinyl polymer which comprises at least 90% acrylic acid monomers and 0.1% to 5% crosslinking agent.
topically applying an azalide antibiotic to an eye in an amount effective to treat infection in a tissue of the eye, wherein said topically applying comprises supplying a depot of a composition containing said azalide antibiotic on the eye.
On the issue of conception, the Board determined that UCSF had failed to prove sole conception by Dr. Dawson, finding that that Dr. Dawson did not fully appreciate how his idea was to be implemented in actual practice, and that it was only after Dr. Bowman became involved that "'something' significant happened," leading to the March 1999 filing of Dr. Dawson's and Dr. Bowman's application. UCSF appealed the Board's decision, contending the Board erred in finding that Dr. Dawson did not conceive of the claimed inventions by himself prior to his collaboration with Dr. Bowman.
The WHO document is entitled "Potential Use of Topical Azithromycin in Trachoma Control Programmes," and the WHO Report describes Dr. Dawson's presentation as a "preliminary report on the possibility of developing a topical application of azithromycin," while "recommend[ing] that [Dr.] Dawson continue to work with [others] to develop a topical application and report back at the next meeting." A "preliminary" statement about a "possibility" or "potential use," alongside a recommendation for continued work and a "report back" in the future, falls short of a "'definite and permanent idea of the complete and operative invention, as it is hereafter to be applied in practice.'"
Stating that "[t]he inadequacy of UCSF's showing is equally clear in the context of the specific interference counts," the Court noted that UCSF's evidence failed to establish conception of the specific concentrations in the '719 count, and further, that UCSF failed to establish that Dr. Dawson on his own determined "an amount effective to treat infection in a tissue of the eye" as recited in the '729 count.
The Court also noted that the ointment prepared by Dr. Leiter for Dr. Chern did not establish that Dr. Dawson alone conceived of the subject matter of the counts because "[t]here is no evidence that Dr. Dawson instructed Dr. Chern to contact Dr. Leiter or otherwise had any direct connection to the preparation of the ointment."
On appeal, UCSF argued that the Board's decision on conception was infected by several errors in claim construction and admission of evidence. In response to UCSF's argument that the preamble of the '719 count should not have been read as limiting, and that treatment can be proactive and can thus occur absent an active infection, the Court countered that "[t]he proper meaning and scope of the preamble . . . is irrelevant to our conclusion that UCSF failed to prove sole conception by Dr. Dawson." In response to UCSF's argument that the Board erred in considering statements from the specifications of the '113 and '443 patents on the ground that those statements were inadmissible hearsay, the Court noted that "UCSF adopted the words in the '113 and '443 patents as its own when it 'copied' those words into the patent application that provoked these interferences." In response to USCF's argument that the Board erred by failing to consider statements made by InSite in an opposition to a European patent application concerning the topical use of azithromycin (InSite had stated in opposition proceedings that the WHO document "disclos[es] . . . why topical azithromycin preparations for eye treatment are highly desirable" and provides "a concrete disclosure [of] how such preparations can be obtained" and "suggestions [on] how [they] could be made"), the Court determined that the Board did not abuse its discretion by following its general rule against giving controlling weight to documents from foreign patent proceedings. The Court also pointed out that the Board had properly noted that the instant case involved the issues of conception and reduction to practice and not lack of novelty or inventive step, the latter of which were at issue in the opposition.
The record before us demonstrates that Dr. Dawson possessed a definite and permanent idea of his complete and operative invention when, in the summer of 1997, he delivered a related presentation at a conference of the World Health Organization ("WHO"). At that time, Dr. Dawson was employed by UCSF, not InSite. Consequently, I find that Dr. Dawson, through UCSF, satisfied his burden of demonstrating prior conception.
The dissent continued by asserting that the WHO Report and WHO document teach each of the limitations of the '729 count, and establish that he had possession of each recited feature. In particular, the WHO references disclose (1) treating an eye, (2) topically applying an azalide antibiotic (i.e., azithromycin) (3) an effective dose ("Dr. Dawson suggested that his azithromycin formulation would use the same dosage known for erythromycin," and the dose "0.5% by weight is used throughout Dr. Dawson's patent as a preferred formulation), (4) supplying a depot containing the azalide antibiotic ("[b]oth references contain the same table listing five alternative delivery depots, one of which is [InSite's] Durasite"). The dissent concluded that "Dr. Dawson's WHO presentation and the accompanying report disclose each element of at least the '729 count, and as such, the two WHO references are sufficient to demonstrate Dr. Dawson's prior conception."
In the interference proceeding, the Board considered whether Dr. Chern's experiment showed reduction to practice before the critical date. The Board held that Dr. Chern's experiment could not be reduction to practice because Chern had not applied the ointment to an actual infection. The Board based its determination on its construction of "treating" an eye, which it construed as "retarding or suppressing infection in a tissue of" an eye. Because Dr. Chern had not applied the ointment to treat an actual infection, the Board held that Dr. Chern did not reduce Dr. Dawson's invention to practice. The Board erred in two fundamental aspects. First, the term "treating an eye" in the preamble of the count is not limiting. Second, "treating an eye" does not require an actual infection.
The question is: because Dr. Dawson's WHO presentation demonstrated conception and Dr. Chern's experiment demonstrated reduction to practice, what is left to establish inventorship? The majority opinion leaves open for interpretation whether commercialization is required for full conception.
But conception does not require commercialization, nor does commercialization establish initial invention. On the contrary, the record shows that Dr. Dawson conceived his invention at UCSF. He turned to Dr. Bowman at InSite only for assistance in commercializing his invention.
Last month, in Vanderbilt Univ v. ICOS Corp., the Federal Circuit affirmed a decision of the District Court for the District of Delaware finding that Plaintiff-Appellant Vanderbilt University had failed to prove that Vanderbilt scientists Drs. Jackie Corbin, Sharron Francis, and Sekhar Konjeti were joint inventors of U.S. Patent Nos. 5,859,006 and 6,140,329. The '006 and '329 patents are directed to compounds and methods for treating erectile dysfunction, including the compound tadalafil, a PDE5 inhibitor and the active ingredient in the drug Cialis®.
Drs. Corbin and Francis were among the first to discover PDE5, which is a phosphodiesterase enzyme that binds to and hydrolyzes cGMP. In 1989, Glaxo Inc. entered into an agreement with Dr. Corbin to underwrite his research of cGMP analogs. In 1990, Dr. Corbin sent an abstract to Glaxo Group Ltd. (a U.K.-based subsidiary of Glaxo Inc.) disclosing his discovery that the potency of cGMP analogs is enhanced by adding a phenyl ring at the 8-position. Building upon their research on cGMP analogs, the Vanderbilt scientists modified a PDE inhibitor in 1991 by attaching a phenyl ring to the 8-position of the compound and an electron-donating hydroxyl group at the 4 position of the phenyl ring, thus creating a PDE inhibitor that was 160 times more potent at inhibiting PDE5 than the original compound. In a letter to Vanderbilt's general counsel, Dr. Corbin disclosed possible therapeutic uses for the new PDE inhibitor, including the treatment of male impotence.
At the end of 1991, Dr. Corbin mentioned his work on PDE5 inhibitors to Dr. Barry Ross, a scientist at Glaxo Group Ltd., and in January of 1992, he sent a research proposal to Glaxo Group Ltd. outlining his test results. In February, Drs. Corbin and Francis discussed the proposal with Dr. Ross, and later that month, Dr. Corbin sent a more detailed research proposal to Dr. Ross. In March, Glaxo's research facility in France tested 26 compounds for PDE5 inhibition, and in early April, Dr. Ross forwarded copies of Dr. Corbin's detailed research proposal to certain Glaxo scientists at the French facility. In late April, Glaxo scientists at the French facility tested another 29 compounds for PDE inhibition. That testing led to the identification of a lead compound. Dr. Alain Claude-Marie Daugan, the named inventor on the '006 and '329 patents, discovered tadalafil (at left) after modifying that lead compound. Prior to the discovery of tadalafil, Glaxo assigned its interest in the compounds to Defendant-Appellee ICOS Corp.
In 2005, Vanderbilt brought suit against ICOS, seeking to correct inventorship of the '006 and '329 patents under 35 U.S.C. § 256 by adding Drs. Corbin, Francis, and Konjeti as joint inventors. According to Vanderbilt, the identification of the lead compound by Glaxo scientists at the French facility could not have been accomplished without the use of Dr. Corbin's detailed research proposal, and tadalafil could not have been identified from that lead compound without relying on the Vanderbilt scientists' work. The District Court, however, found for ICOS, determining that the Vanderbilt Scientists could not be co-inventors because they never "conceived the specific chemical structure of the compound claimed [i.e., tadalafil] or the compound with all of its components." In support of its decision, the District Court cited Bd. of Educ. ex rel. Bd. of Trustees of Fla. State Univ. v. Am. BioScience Inc., 333 F.3d 1330 (Fed. Cir. 2003), which the Court said "precludes the result plaintiff seeks: namely, that the contribution of a molecular scaffold in the context of one molecule . . . renders the disclosing party or parties inventors of a different family of molecules containing the same scaffold." Notwithstanding this finding, the District Court noted that "[t]his is not to say that Corbin, Francis, and Konjeti did not make contributions to Daugan's inventive process; only that, under the applicable law, these contributions fall more into the category of 'prosaic' contributions because they did not conceive the invention as claimed."
On appeal, Vanderbilt argued that Dr Corbin's disclosure of his detailed research proposal to Glaxo Group Ltd. led to the identification by Glaxo scientists at the French facility of a lead compound incorporating the same molecular scaffold as Vanderbilt's PDE5 inhibitors. At trial, ICOS initially argued that Glaxo scientists at the French facility independently discovered the compounds that were tested for PDE5 inhibition through their knowledge of the vasorelaxation effect of beta-carbolines, which was allegedly gleaned in part from a May 1992 paper. However, Glaxo's internal records indicated that the compounds were first tested in April 1992, before that paper was published. ICOS then "backed away" from this story and instead argued that the lead compound was identified in the April 1992 search by looking to the structure of a compound identified in Glaxo's earlier March 1992 search. This second story was supported by the testimony of Glaxo's scientists at the French facility, who testified that they did not have any knowledge about the Vanderbilt scientists' research until June 1993, long after the April 1992 search had been performed. In response, Vanderbilt argued that in view of its changing story, Glaxo lacked credibility, and Vanderbilt suggested that Glaxo's scientists used the detailed research proposal to guide their structure searches in April 1992. In addition, Vanderbilt argued that the key modification to the lead compound that yielded tadalafil was the addition of an electron-donating substituent on the phenyl ring based upon the work of the Vanderbilt scientists.
[T]he district court, however, did not rest its opinion solely on this interpretation of our case law. The district court correctly noted that conception requires identification of the specific chemical structure of the compound. The parties agree that Dr. Daugan was the first to conceive of tadalafil. After a careful review of the evidence, the district court concluded that the parties' respective stories about whether the Vanderbilt Scientists contributed to the identification of [Glaxo's lead compound] were "equally plausible" and that Vanderbilt failed to produce any evidence of joint invention of tadalafil. For Vanderbilt to succeed in its inventorship claim, it must carry its burden of proof of demonstrating that the Vanderbilt Scientists contributed to the claimed invention with clear and convincing evidence. See Hess v. Advanced Cardiovascular Sys., Inc., 106 F.3d 976, 980 (Fed. Cir. 1997). The district court's findings demonstrate that under the correct legal test, Vanderbilt did not carry its burden. Thus, any erroneous interpretations of our case law were harmless error.
There are two possible ways to interpret the district court's findings, either of which requires a remand. The first is that the district court's findings are directly contradictory. The court could not have properly found that the Vanderbilt scientists made a contribution to the identification of [Glaxo's lead compound] if it were "equally plausible" that they did not make a contribution. . . . The alternative is that the district court found that Vanderbilt did not establish by clear and convincing evidence that the Vanderbilt scientists' contributions were sufficient to make them joint inventors. The problem with this interpretation of the finding is that it is obviously tainted by the district court's view that in order to be joint inventors, the Vanderbilt scientists must have "conceived the 'specific chemical structure of the compound' claimed or 'the compound with all of its components,' or communicated that compound to Glaxo."
Stating that "the district court found that the Vanderbilt scientists made some contribution, [but] has not told us exactly what that contribution was or why that contribution was not enough to make the Vanderbilt scientists joint inventors under the correct standard," Judge Dyk believed that the District Court's decision should have been vacated and remanded.

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