Opinion ID: 2177738
Heading Depth: 1
Heading Rank: 2

Heading: jurisdiction of court to enjoin assignment of patent

Text: It is undisputed that the federal courts have exclusive jurisdiction over claims arising under the patent laws. 28 U.S.C. § 1338 (1988); Becher v. Contoure Laboratories, 279 U.S. 388, 49 S.Ct. 356, 73 L.Ed. 752 (1929). Nevertheless, courts of a state may try questions of title, and may construe and enforce contracts relating to patents. New Marshall Engine Co. v. Marshall Engine Co., 223 U.S. 473, 478, 32 S.Ct. 238, 239, 56 L.Ed. 513, 515 (1912) (citing Wade v. Lawder, 165 U.S. 624, 17 S.Ct. 425, 41 L.Ed. 851 (1897)); accord Jones Cold Store Door Co. v. Jones, 108 Md. 439, 443, 70 A. 88, 90 (1908). See also 9 Deller's Walker on Patents § 808 at 12 (1976). The Supreme Court enunciated the test in Pratt v. Paris Gas Light & Coke Co., 168 U.S. 255, 18 S.Ct. 62, 42 L.Ed. 458 (1897): To constitute such a cause, the plaintiff must set up some right, title, or interest under the patent laws, or, at least, make it appear that some right or privilege will be defeated by one construction, or sustained by the opposite construction of these laws. ... Section [1338] does not deprive the state courts of the power to determine questions arising under the patent laws, but only of assuming jurisdiction of `cases' arising under those laws. There is a clear distinction between a case and a question arising under the patent laws. The former arises when the plaintiff in his opening pleading  be it a bill, complaint, or declaration  sets up a right under the patent laws as ground for a recovery. Of such the state courts have no jurisdiction. The latter may appear in the plea or answer or in the testimony. The determination of such question is not beyond the competency of the state tribunals. (Citations omitted.) Id. at 259, 18 S.Ct. at 64, 42 L.Ed. at 460; accord Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 807-08, 108 S.Ct. 2166, 2173, 100 L.Ed.2d 811, 824 (1988). See also 9 Deller's Walker on Patents § 808; 7 Lipscomb's Walker on Patents § 23:5 (1988). Under this test, there is no claim derived from patent law raised by the pleadings in the instant case that would require exclusive federal jurisdiction. Rather, this is a breach of fiduciary duty case involving equitable title to a patent. Validity of the patent and possible infringement are not implicated in this case, nor are we asked to construe any patent law. The mere fact that the subject of the breach of fiduciary duty was a patent does not place the controversy in the exclusive jurisdiction of the federal courts. Edwards has not raised a claim under the patent laws in any proper sense. See Pratt, 168 U.S. at 259, 18 S.Ct. at 64, 42 L.Ed. at 460. In fact, he raised no patent law issue below and did not contest jurisdiction until this appeal. Finally, Edwards argues that [t]he trial Court apparently determined that the patent should not have been issued to Edwards. If that is the case, he suggests the appropriate remedy would have been to declare the patent void. Since the circuit court had no jurisdiction to declare the patent void, Edwards maintains that the court was without jurisdiction to order him to assign it. To the contrary, there is ample evidence, as previously discussed, from which the jury could find that Edwards breached his fiduciary duty by obtaining the patent in his own name and refusing to assign it to the Corporation. Therefore, the injunctive relief in this case sought to correct Edwards' breach of fiduciary duty and restore legal title to the equitable owner of the patent. See Kennedy v. Wright, 676 F. Supp. 888, 892 (C.D.Ill. 1988), aff'd, 867 F.2d 616 (Fed. Cir.1989) (where the inventor is more than an employee and occupies a special relationship of trust and confidence to the business, courts under certain circumstances have held it inequitable for the individual to retain a title which more properly belongs to the company. In such instances, the fiduciary agent will be compelled to assign the patent); Dowse v. Federal Rubber Co., 254 F. 308, 310 (N.D.Ill. 1918) (He did not expressly contract as a part of his duties to design new tires; but if he did so agree in substance, and was more than a mere employ[ee], having the main responsibility to make the business successful, then he should be compelled to assign the patent). This action was fully within the jurisdiction of the court. The rule is well settled that the State Courts may determine ... in whom the patent is vested.... Jones, 108 Md. at 443, 70 A. at 90; see also Becher, 279 U.S. at 391, 49 S.Ct. at 357, 73 L.Ed. at 753-54. In summary, the verdict of the jury in this case was not inconsistent with the equitable remedy fashioned by the trial judge. Based on the jury's special verdict, the judge properly concluded that the jury found that Edwards breached his fiduciary duty to the Corporation by obtaining the patent in his own name without the consent of the Corporation and by exercising control over the patent inconsistent with the Corporation's interests. The judge then determined that the appropriate remedy was that Edwards (1) assign the patent on the seal to the Corporation, (2) not engage in any activity relating to the patented seal, and (3) turn over the mold used to manufacture the patented seal. The issue of equitable ownership of the patent could be tried in a state court, and the judge below did not err in ordering Edwards to assign the patent to the equitable owner. JUDGMENT OF THE CIRCUIT COURT FOR MONTGOMERY COUNTY AFFIRMED. COSTS TO BE PAID BY APPELLANT.