Opinion ID: 203621
Heading Depth: 3
Heading Rank: 2

Heading: Patent Application/Inventorship Dispute

Text: QLT also challenges the jury's finding of unjust enrichment based on the patent application theory. QLT's primary quarrel with this theory relates to its legal underpinnings. We considered and rejected most of these arguments in our prior opinion, and QLT's new arguments fare no better. The patent application theory centers on the joinder of the MEEI-only '473 patent application with the combined '591 application. MEEI claimed that QLT, by promising compensation commensurate with sole-ownership, induced MEEI's cession of the '473 application, in which its researchers were the only listed co-inventors, in favor of the '591 application, which included coinventors from MGH and QLT. At its heart, this claim represents a straightforward request for compensation for a benefit conferred and appreciated in a non-gratuitous context. But the benefit at issue in this case falls near the penumbra of federal patent law. Consequently, the parties have partially succumbed to the gravitational pull of patent law and have raised several arguments that directly implicate patent law. As a consequence, we review at the outset those issues that we left open in our prior opinion and which were therefore available for exploration at trial. Doing so will serve to sharpen our focus on the parties' contentions deserving closer attention. We previously noted that although the proper inventorship of the patent applications at issue is a non-negotiable question of federal patent law, the question of which application to prosecute was a choice available to the parties. MEEI-II, 412 F.3d at 232. Consequently, we explained that if QLT induced MEEI to abandon a more limited claim (embodied in the '473 application or a similar MEEI-only application that did not raise prior art issues) in favor of the broader '591 claim by promising compensation, and then did not pay such compensation, QLT would be unjustly enriched. Id. at 234 n. 7. In reaching this conclusion, we explicitly rejected QLT's invitation to find that it had not been enriched because MEEI retained the right to obtain (and in fact did obtain) an MEEI-only patent in its own name. Id. Rather we emphasized that the proper inquiry was whether, as a result of unjust conduct (i.e., making a promise and then failing to keep it), QLT retained royalties that it would have had to forgo had it not committed such unjust conduct. [18] Id. The parties have vigorously disagreed as to how to interpret our mandate. The trial court found that MEEI had to prove two key points: (1) the existence of an agreement whereby MEEI would abandon prosecution of the '473 application in exchange for fair compensation; and (2) that QLT's failure to honor this agreement resulted in unjust enrichment. QLT objects to this framework. Instead, QLT strenuously argues that our prior decision and other precedent required MEEI to prove that it specifically conferred a patent benefit. The authority that QLT advances to support this proposition is Incase, Inc. v. Timex, Corp., 488 F.3d 46 (1st Cir.2007). Incase, however, merely held that a party claiming unjust enrichment in Massachusetts must present evidence as to the amount of the unjust enrichment. Id. at 54-55. [19] We did not there state that some benefits were compensable and others were not. Rather, Incase largely involved consideration of the proof of the amount of unjust enrichment, without commenting on the nature of the benefit supporting a claim. Indeed, the fact that a patent application is the breeding ground of an unjust enrichment claim, such as the present one, does not require proof of a patent benefit. See Thompson v. Microsoft, Corp., 471 F.3d 1288, 1291-92 (Fed.Cir.2006)(finding that state law claim of unjust enrichment did not present a question of patent law). [20] Accordingly, we reject QLT's contention that MEEI was required to prove a patent benefit. QLT's next prong of attack relies on the fact that the summary judgment posture of our prior decision obliged us to assume that both the '473 and '591 applications were valid. MEEI-II, 412 F.3d at 233 n. 5. QLT argues that after a trial on the merits, this presumption should fall away. Additionally, QLT argues that the evidence at trial cannot support a conclusion that any MEEI-only patent was in fact valid. Even if QLT's position potentially has merit, it is beside the point. The central thrust of our prior decision was that it was possible that QLT benefited from MEEI's assent to the amendment of the '473 application regardless of the validity of any MEEI-only application. The trial court found that MEEI had presented overwhelming evidence that MEEI agreed to drop prosecution of the '473 application in exchange for fair compensation. MEEI-III, 495 F.Supp.2d at 213. The jury and the trial court credited the evidence that QLT initially softened its position regarding inventorship and eventually agreed to compensate MEEI for its consent to broaden the patent application. See id. at 214. We see no reason to disturb these findings. Moreover, QLT misses the legal significance of these findings. MEEI's cooperation in the patent application provided an important benefit at a vital time. Without MEEI's consent to the broadened '591 application, QLT would have faced significant challenges regarding its ownership of essential rights at a time when its relationship with CIBA was in its nascent stages. [21] Had MEEI declined to consent to the comingling of claims 7 and 14 of the '591 application, QLT and/or MGH would have had to engage in elaborate and lengthy proceedings to establish their co-inventorship rights, if in fact they had rights that could be vindicated. To challenge inventorship without MEEI's consent, QLT would have had to file its own, separate patent application covering the same claims, which would result in the Patent and Trademark Office declaring and adjudicating an interference proceeding, or issuing a separate patent. See Sagoma Plastics, Inc. v. Gelardi, 366 F.Supp.2d 185, 188 & n. 1 (D.Me.2005)(noting that 35 U.S.C. § 116 permits the Patent and Trademark Office to correct inventorship in a patent application only with the consent of all parties)( citing 37 C.F.R. § 1.48); 35 U.S.C. § 256 (permitting the Patent and Trademark Office to correct inventorship of an issued patent with the consent of all parties); 35 U.S.C. § 135 (describing interference proceedings). Had QLT provoked an interference, as the junior applicant, it would have borne the burden of proving that its claimed inventors met the standard of inventorship (or its earlier invention of the patent) by a preponderance of the evidence. See Environ Products, Inc. v. Furon, Co., 215 F.3d 1261, 1265 (Fed.Cir.2000). Alternatively, QLT could have waited until MEEI's patent issued, and pursued a legal challenge against the patent in an infringement suit, or pursuant to 35 U.S.C. § 256, which permits the courts to hear actions for correction of inventorship. See, e.g., Eli Lilly & Co. v. Aradigm Corp., 376 F.3d 1352, 1356 n. 1, (Fed.Cir.2004) (noting that § 256 creates a cause of action to correct inventorship). But if QLT had proceeded along this path, it would have faced the decidedly difficult challenge of proving non-joinder of inventors by clear and convincing evidence. Id. at 1364-65 ( citing Hess v. Advanced Cardiovascular Sys., Inc., 106 F.3d 976, 980 (Fed.Cir. 1997)). Thus, MEEI's joinder of its claims into a single patent application spared QLT what would have, or at least could have, otherwise been an arduous task of seeking the joinder of its favored inventors. This was a cognizable benefit, and we see no reason why QLT should be able to avoid paying compensation for this benefit. In fact, even QLT recognized that this was a valuable benefit. QLT's patent attorney advised QLT that MEEI could unilaterally file a divisional application [from the joint '591 application] based on the parent or (CIP) containing claims to neovasculature and naming MEEI inventors. A finder of fact could conclude that this was undoubtedly one more reason that QLT postponed discussion of licensing and avoided getting into a pissing match with Dr. Miller. Moreover, given the fact that QLT's relationship with CIBA Vision was in its nascent stages and the fact that Visudyne's potential in the marketplace was subject to great uncertainty, the patent application benefit could likely support a substantial valuation. In fact, the jury and the trial court appear to have credited QLT's promises to compensate MEEI as though it was the sole inventor of the claims at issue. In light of the foregoing, we believe QLT may have used more business sense in making this offer than the trial court has suggested. See MEEI-III, 495 F.Supp.2d at 214. Ultimately, however, the wisdom of QLT's promises is also beside the point; there was sufficient evidence that MEEI's cooperation in the patent application process constituted a detriment to MEEI and conferred a benefit on QLT in a non-gratuitous context. In light of QLT's vast profits and repeated promises, it would be manifestly unjust to permit QLT to retain such benefits. Against this backdrop, QLT's remaining challenges to the finding of a patent benefit are easily dismissed. Since QLT received a benefit immediately upon the broadening of the patent application, we need not analyze the impact of MEEI's later patent application or its conferral of any patent benefits during the trial. Similarly, since QLT had already benefited from the broadening of the patent application, we need not join the parties' vigorous debate as to whether QLT actually received freedom from a blocking patent. [22] The only matter remaining in the unjust enrichment claim is the propriety of the damage award.