Court Opinion

ID: 3006759
Source: CourtListenerOpinion
Date Created: 2015-10-02 16:01:09.092144+00
Date Added: 2024-06-11T11:39:21.855411
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
                ______________________

               ALEXANDER SHUKH,
                 Plaintiff-Appellant

                           v.

 SEAGATE TECHNOLOGY, LLC, A DELAWARE
   LIMITED LIABILITY COMPANY, SEAGATE
      TECHNOLOGY, INC., A DELAWARE
  CORPORATION, SEAGATE TECHNOLOGY, A
HOLDING COMPANY OF THE CAYMAN ISLANDS,
SEAGATE TECHNOLOGY PLC, AN IRISH PUBLIC
            LIMITED COMPANY,
             Defendants-Appellees

      UNKNOWN OWNERS AND ASSIGNEES,
                  Defendant
            ______________________

                      2014-1406
                ______________________

    Appeal from the United States District Court for the
District of Minnesota in No. 0:10-cv-00404-JRT-JJK,
Judge John R. Tunheim.
                ______________________

                Decided: October 2, 2015
                ______________________

    CONSTANTINE JOHN GEKAS, Gekas Law LLP, Chicago,
IL, argued for plaintiff-appellant.
2                      SHUKH   v. SEAGATE TECHNOLOGY, LLC

     CHAD DROWN, Faegre Baker Daniels LLP, Minneap-
olis, MN, argued for defendants-appellees. Also repre-
sented by DAVID J.F. GROSS, ELIZABETH COWAN WRIGHT,
AARON D. VAN OORT, CHARLES FEENEY KNAPP, JEYA PAUL;
CALVIN L. LITSEY, East Palo Alto, CA.
                ______________________

       Before MOORE, WALLACH, and TARANTO, Circuit
                      Judges.
MOORE, Circuit Judge.
    Alexander Shukh appeals from the district court’s
dismissal of some of his claims for failure to state a claim
and its grants of summary judgment on his remaining
claims in favor of the defendants, Seagate Technology,
LLC; Seagate Technology, Inc.; Seagate Technology; and
Seagate Technology PLC (collectively, “Seagate”).
Dr. Shukh also appeals from several of the court’s discov-
ery orders and other ancillary orders. For the reasons
discussed below, we vacate and remand the court’s grant
of summary judgment on Dr. Shukh’s claim for correction
of inventorship under 35 U.S.C. § 256 and affirm its
remaining holdings.
                       BACKGROUND
    Dr. Shukh, a native of Belarus, is a leading scientist
in the field of semiconductor physics, with a Ph.D. in
Condensed Matter Physics and a B.S. and an M.S. in
Electronics and Electronic Engineering. In 1997, Seagate
recruited Dr. Shukh to move to the United States and
work for it. Dr. Shukh was employed at Seagate from
September 1997 until his termination in early 2009.
During his employment, Seagate sponsored Dr. Shukh for
an H-1B work visa, a visa extension, and eventually
permanent residency. At Seagate, Dr. Shukh was named
SHUKH   v. SEAGATE TECHNOLOGY, LLC                           3

as an inventor on 17 patents. 1 He received numerous
awards for his achievement and innovation generally and
on specific products, and was named to the Seagate
Technology Inventor’s Hall of Fame. The district court
found that Dr. Shukh had a reputation as “an extremely
successful innovator in the hard disk drives engineering
community.” Shukh v. Seagate Tech., LLC, No. CIV. 10-
404 JRT/JJK, 2013 WL 1197403, at *3 (D. Minn. Mar. 25,
2013) (“Summary Judgment Order”).
    When he was hired, Dr. Shukh executed Seagate’s
standard At-Will Employment, Confidential Information,
and Invention Assignment Agreement (“Employment
Agreement”), in which Dr. Shukh agreed to “hereby
assign to [Seagate] all [his] right, title, and interest in and
to any inventions” made while at Seagate. J.A. 600.
Seagate policy prohibited Seagate employees from filing
patent applications themselves for their inventions.
Instead, they were required to submit Employee Inven-
tion Disclosure Forms to Seagate’s Intellectual Property
(“IP”) Department. Inventors were responsible for identi-
fying co-inventors of their inventions on these forms. The
IP Department would then forward the form to the inter-
nal Patent Review Board, which would determine wheth-
er, for example, to pursue a patent application for the
invention or to protect it as a trade secret.
    Dr. Shukh’s time at Seagate was undisputedly tumul-
tuous. His performance evaluations indicated that he did
not work well with others due to his confrontational style.
Moreover, Dr. Shukh’s conduct interfered with his
productivity. For example, Dr. Shukh applied a “three-
strikes” rule to interactions with his coworkers, under

    1   Dr. Shukh was also awarded fifteen patents by
the former Soviet Union and a number of U.S. patents for
inventions not at Seagate.
4                      SHUKH   v. SEAGATE TECHNOLOGY, LLC

which he would stop communicating with coworkers who
had engaged three times in behavior he considered dis-
honest. Dr. Shukh also frequently accused others of
stealing his work, and his managers criticized him for his
insistence on receiving credit for his work. To avoid
accusations of plagiarism, some Seagate employees re-
fused to attend presentations by Dr. Shukh.
    In 2009, Seagate terminated Dr. Shukh and 178 other
employees. Although he has submitted many job applica-
tions to other potential employers, Dr. Shukh has not yet
secured employment. Dr. Shukh claims that the hiring
manager of Hitachi, a company to which he applied,
contacted a Seagate employee to discuss rumors the
Hitachi manager had heard about Dr. Shukh. Moreover,
a Hitachi engineer told Dr. Shukh during his interview
that he would never find employment at Hitachi with his
reputation.
    This lawsuit stems, in part, from Dr. Shukh’s allega-
tions that Seagate has not properly credited him for his
inventions. Specifically, Dr. Shukh alleges that during
his tenure at Seagate, Seagate wrongfully omitted him as
an inventor from six patents (U.S. Patent Nos. 7,233,457;
7,684,150; 6,525,902; 6,548,114; 6,738,236; and 7,983,002)
and four pending patent applications, all relating to
semiconductor technologies. He also claims that Seagate
discriminated against him and wrongfully terminated
him both on the basis of his national origin and in retalia-
tion for complaining about the discrimination.
    In his original complaint, Dr. Shukh asserted thirteen
claims against Seagate, including claims for correction of
inventorship of the disputed patents pursuant to
35 U.S.C. § 256, rescission of his Employment Agreement,
breach of contract, fraud, breach of fiduciary duty, unjust
enrichment, and federal and state retaliation and nation-
al origin discrimination claims. He also sought a declara-
SHUKH   v. SEAGATE TECHNOLOGY, LLC                         5

tory judgment that certain provisions of his Employment
Agreement were unenforceable.
    Seagate moved to dismiss Dr. Shukh’s § 256 claim for
lack of standing. Dr. Shukh alleged three distinct inter-
ests in the patents: an ownership interest, a financial
interest, and a reputational interest. At the motion to
dismiss stage, the district court held that Dr. Shukh had
no ownership or financial interest in the patents because
he automatically assigned all of his inventions to Seagate
in his Employment Agreement. The court left open the
possibility that Dr. Shukh had standing to sue based on
reputational harm caused by his omission from the dis-
puted patents. The district court also dismissed for
failure to state a claim Dr. Shukh’s claims for rescission of
his Employment Agreement, breach of contract, breach of
fiduciary duty, unjust enrichment, and declaratory judg-
ment.
    Two years later, Seagate moved for summary judg-
ment on Dr. Shukh’s § 256 claim. The court granted
Seagate’s motion, holding that there was no genuine
dispute of material fact as to whether Dr. Shukh suffered
reputational harm from not being named an inventor on
the patents. Summary Judgment Order at *13. It also
granted Seagate’s motion for summary judgment on Dr.
Shukh’s fraud claim. One week later, the district court
granted Seagate’s motion for summary judgment on Dr.
Shukh’s federal and state retaliation and national origin
discrimination claims. Throughout the course of the case,
the district court made rulings on discovery and other
ancillary issues. Dr. Shukh has appealed many of the
district court’s decisions. Because the district court had
jurisdiction over this case pursuant to 28 U.S.C.
§§ 1338(a) and 1367, we have jurisdiction over this appeal
under 28 U.S.C. § 1295(a)(1).
6                      SHUKH   v. SEAGATE TECHNOLOGY, LLC

                       DISCUSSION
    We review a district court’s grant of summary judg-
ment under the law of the regional circuit. Grober v.
Mako Prods., Inc., 686 F.3d 1335, 1344 (Fed. Cir. 2012).
The Eighth Circuit reviews a grant of summary judgment
de novo. Wilson v. Spain, 209 F.3d 713, 716 (8th Cir.
2000). Summary judgment is appropriate if “the movant
shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). “The evidence of the non-
movant is to be believed, and all justifiable inferences are
to be drawn in his favor.” Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 255 (1986).
    We review standing de novo. Rack Room Shoes v.
United States, 718 F.3d 1370, 1374 (Fed. Cir. 2013). To
establish standing, a plaintiff must demonstrate that he
suffered an injury-in-fact, that the injury is traceable to
the conduct complained of, and that the injury is redress-
able by a favorable decision. Chou v. Univ. of Chi., 254
F.3d 1347, 1357 (Fed. Cir. 2001). The alleged harm must
be concrete and particularized. Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560 (1992).
     Dr. Shukh challenges the district court’s decision that
he lacked standing to pursue his § 256 claim on two
grounds. First, he argues that we should overrule our
holding in Filmtec Corp. v. Allied-Signal, Inc., 939 F.2d
1568 (Fed. Cir. 1991). Under Filmtec, Dr. Shukh’s as-
signment in the Employment Agreement of his ownership
and financial interests in his inventions conveyed legal
title in those inventions to Seagate. Id. at 1573. Because
of this conveyance, the district court found that Dr. Shukh
has no ownership interest or financial interest in the
patents that would give him standing to pursue his § 256
claim. See DDB Tech., L.L.C. v. MLB Advanced Media,
L.P., 517 F.3d 1284, 1290 (Fed. Cir. 2008). As a panel, we
SHUKH   v. SEAGATE TECHNOLOGY, LLC                        7

are bound by Filmtec; we cannot overrule that holding
without en banc action.
    Dr. Shukh also argues that the district court erred in
granting summary judgment to Seagate on his § 256
claim for lack of standing. He argues that a trier of fact
could conclude that his reputation was damaged because
he was not recognized as the inventor of the patents. In
the past, we have declined to decide whether reputational
injury, standing alone, may satisfy the constitutional
standing requirements for a § 256 claim. Chou, 254 F.3d
at 1359 (declining to consider whether reputational injury
could satisfy Article III standing requirements because
the claimed inventor had alleged a concrete financial
interest in the patent); Larson v. Correct Craft, Inc., 569
F.3d 1319, 1327–28 (Fed. Cir. 2009) (declining to decide
whether reputational injury could satisfy Article III
standing requirements because the claimed inventor had
not alleged any reputational injury).
    Today, we hold that concrete and particularized repu-
tational injury can give rise to Article III standing. As we
noted in Chou, “being considered an inventor of important
subject matter is a mark of success in one’s field, compa-
rable to being an author of an important scientific paper.”
254 F.3d at 1359. We reasoned that “[p]ecuniary conse-
quences may well flow from being designated as an inven-
tor.” Id. This is particularly true when the claimed
inventor is employed or seeks to be employed in the field
of his or her claimed invention. For example, if the
claimed inventor can show that being named as an inven-
tor on a patent would affect his employment, the alleged
reputational injury likely has an economic component
sufficient to demonstrate Article III standing.
    We find that there is a question of material fact as to
whether Dr. Shukh’s omission as a named inventor on the
disputed patents caused him reputational injury.
8                     SHUKH   v. SEAGATE TECHNOLOGY, LLC

Dr. Shukh presented evidence such that a trier of fact
could conclude that this omission injured his reputation in
at least two ways: first, it harmed his reputation as an
inventor in the field of semiconductor physics, and second,
it contributed to his reputation for poor teamwork due in
part to his accusations that others were stealing his work.
Moreover, Dr. Shukh presented evidence from which a
trier of fact could conclude that these reputational harms
had economic consequences—namely, that Dr. Shukh was
unable to find employment after he was terminated from
Seagate. We address these three issues in turn.
      I.     Dr. Shukh’s Reputation as an Inventor
    First, a genuine dispute exists as to whether
Dr. Shukh’s omission as a named inventor on the disput-
ed patents harmed his reputation as an inventor.
Dr. Shukh presented evidence supporting his contention
that a scientist’s professional reputation is influenced by
the number of patents on which that scientist is named.
He provided an expert report explaining that being
named on a patent means that the inventor’s “standing
and reputation in the related technology community has
been enhanced, including among their employers or
potential employers.” J.A. 8817. The expert also wrote
that “inventors take great pride in their inventorship
abilities and accomplishments” and that named inventors’
contributions on patents are “considered positively when
a technology professional is being considered for a promo-
tion.” J.A. 8816; see also J.A. 5592 (expert report stating
that adding the disputed patents to Dr. Shukh’s portfolio
would have “significantly strengthened” his claim to the
Immigration and Naturalization Service that he was an
“outstanding professor or researcher” and therefore
merited permanent residency).
   Dr. Shukh also showed that Seagate itself valued the
number of patents its employees were named on. For
SHUKH   v. SEAGATE TECHNOLOGY, LLC                      9

example, Seagate gave financial rewards, J.A. 5215, and
enrolled employees in its Inventor’s Hall of Fame, J.A.
5214, based on an employee’s number of named patents.
Dr. Shukh’s Fiscal Year 2007 Performance Evaluation
further reinforces this conclusion. In the performance
evaluation, Dr. Shukh’s manager wrote that Dr. Shukh
“has a significant patent portfolio; however, I am con-
cerned that the number of patent applications has been
reduced over the last two years—albeit, partially due to
issues with the [Seagate Patent Review Board] and
Seagate policy.” J.A. 5222. He concluded that he would
“like to see [Dr. Shukh] increase his patent portfolio in
[Fiscal Year 2008].” 2 Id.
    The district court acknowledged this evidence, but
nonetheless concluded that Dr. Shukh did not raise a
genuine issue of material fact with respect to his reputa-
tion as an inventor. In doing so, it relied on undisputed
testimony from Dr. Shukh and his former manager and
coworkers that Dr. Shukh had a reputation as a leading
scientist in his field. Summary Judgment Order at *10.
The court also noted that Dr. Shukh testified that his
reputation for “honesty, good organization, openness and

   2    The district court discounted this evidence be-
cause the manager “clarified in his deposition testimony
that he was concerned with the decrease in the number of
invention disclosures that [Dr.] Shukh made to Seagate,
and not concerned with the decrease in the total number
of patent applications filed with the USTPO that listed
[Dr.] Shukh as an inventor.” Summary Judgment Order
at *12. In doing so, the district court improperly made a
factual finding on summary judgment. Cf. Anderson, 477
U.S. at 249–50. Moreover, this interpretation contradicts
the plain language of the evaluation. The district court
erred when it discounted Dr. Shukh’s performance evalu-
ation at this stage.
10                    SHUKH   v. SEAGATE TECHNOLOGY, LLC

straightforwardness and communications, good technical
abilities, innovation and extreme competitiveness did not
change from 2002 until 2012.” Id. (quoting J.A. 8962–64)
(alteration omitted).     Finally, the court wrote that
Dr. Shukh’s former co-workers testified that their impres-
sion of Dr. Shukh as an “excellent inventor with good
technical skills” would not change based on the number of
patents he was named on. Id. at *12. From all this, the
district court concluded that Dr. Shukh’s professional
reputation had not been harmed by his omission from the
disputed patents.
    In coming to this conclusion, the district court im-
properly made findings of fact on summary judgment and
did not make all factual inferences in Dr. Shukh’s favor.
A trier of fact could conclude that Dr. Shukh’s omission
from the disputed patents had a concrete impact on his
reputation in his field. There is significant evidence that
the number of patents an inventor is named on influences
his reputation in the field of the patents. Dr. Shukh’s
professional reputation is based on his work in semicon-
ductor physics—the same field as the disputed patents.
Moreover, Dr. Shukh is named as an inventor on seven-
teen issued patents for work done at Seagate; he argues
here that he should be named as an inventor on an addi-
tional six issued patents and four pending applications.
The disputed patents would therefore form a significant
portion of the patents granted to Dr. Shukh during his
tenure at Seagate.
    True, it is undisputed that Dr. Shukh had a reputa-
tion as an excellent inventor, and that this reputation did
not decrease while he was at Seagate. However, this does
not mean that Dr. Shukh’s omission from the patents did
not harm his reputation. The evidence supports the
conclusion that Dr. Shukh’s reputation as an inventor
would have been higher had he been named on the pa-
tents. Likewise, the testimony of Dr. Shukh’s coworkers
SHUKH    v. SEAGATE TECHNOLOGY, LLC                        11

that additional patents would not change their impression
of Dr. Shukh’s technical abilities does not speak to wheth-
er additional patents would improve Dr. Shukh’s reputa-
tion in the eyes of potential employers. Dr. Shukh’s
coworkers had years of experience working directly with
Dr. Shukh, unlike potential employers, who likely lack
that first-hand knowledge and are therefore more likely to
rely on their knowledge of Dr. Shukh’s reputation in
evaluating their impression of him. Considering all of the
evidence, we find there is a genuine dispute of material
fact as to whether Dr. Shukh’s reputation as an inventor
was harmed by his omission from the disputed patents.
   II.     Dr. Shukh’s Reputation for Seeking Credit for
                         His Inventions
    There is also a genuine dispute of material fact as to
whether Dr. Shukh’s omission from the disputed patents
worsened his reputation as an employee, and whether his
reputation would improve if he prevailed in this lawsuit.
The record shows that Dr. Shukh had a negative reputa-
tion at Seagate, in part because he aggressively sought
credit for his inventions. In his Fiscal Year 2007 Perfor-
mance Evaluation, Dr. Shukh’s manager wrote:
    [Dr. Shukh’s] insistence on getting appropriate
    credit for all design ideas and implementations
    stifles open discussion and adoption of his ideas.
    Since this issue has become more important to
    [Dr. Shukh] as time goes on, and since he believes
    he has not been fairly recognized for his past con-
    tributions, it’s an emotional issue. Most unfortu-
    nately, it appears to others that [Dr. Shukh] is
    more interested in being right and in getting cred-
    it than in ensuring that Seagate wins.
    [Dr. Shukh] will become more effective, and his
    contributions will increase significantly, if he can
    find ways to let others see that he truly is inter-
12                     SHUKH   v. SEAGATE TECHNOLOGY, LLC

     ested primarily in Seagate’s success, rather than
     in his own advancement or preventing theirs.
J.A. 5222. Dr. Shukh’s manager also indicated that
Dr. Shukh demonstrated “unsatisfactory” teamwork
skills, explaining that he “is often insistent on getting
appropriate or complete credit for his work” and that he
“repeatedly accused” Seagate workers of “stealing his
work.” J.A. 5223; see also Summary Judgment Order
at *4. Dr. Shukh argues that if he is named an inventor
on the disputed patents, it may rehabilitate his reputa-
tion for seeking credit for his ideas.
    On summary judgment, the district court held that
Dr. Shukh’s “reputation for being antagonistic toward his
employer and coworkers regarding ownership of pa-
tents . . . is too attenuated to confer standing.” Summary
Judgment Order at *11. It found that this harm was not
traceable to Seagate’s omission of Dr. Shukh as an inven-
tor because Dr. Shukh first developed this reputation in
2005, before he learned of his omission from the disputed
patents. Id. at *11. Moreover, it reasoned that this harm
was not redressable by a § 256 claim because adding
Dr. Shukh’s name to the disputed patents would not
“dispel [Dr.] Shukh’s reputation for accusing others of
stealing his work in a manner that disrupts effective
collaboration.” Id. at *11 n.13.
    We disagree with the district court’s conclusions.
First, we find there is a genuine dispute of material fact
as to whether Dr. Shukh’s negative reputation for seeking
credit for his inventions is traceable to Seagate’s omission
of Dr. Shukh as an inventor from the disputed patents. In
deciding that the harm was not traceable, the district
court relied on the fact that “[Dr.] Shukh’s reputation for
accusing others of stealing his work and insisting on
credit for all of his ideas was established well before the
disputed patents became an issue between [Dr.] Shukh
SHUKH   v. SEAGATE TECHNOLOGY, LLC                      13

and Seagate.” Id. It is true that Dr. Shukh did not know
of the disputed patents before his reputation for seeking
credit for his inventions began to develop. However, his
disputes with Seagate over his omission from the patents
and this subsequent lawsuit have likely significantly
worsened Dr. Shukh’s reputation on this front. Moreover,
the fact that Dr. Shukh did not know of his omission did
not mean he was not responding (directly or indirectly) to
Seagate’s actions in not crediting him as an inventor.
There is evidence that Dr. Shukh’s accusations of plagia-
rism and insistence on receiving credit for his ideas
stemmed from his concerns about not receiving proper
credit for his inventions—concerns acknowledged by
Dr. Shukh’s manager as valid. See J.A. 5223 (“I have
come to see over the past 6 months that [Dr. Shukh]
sometimes doesn’t receive proper credit for work he has
done in the past.”). And Dr. Shukh’s omission from the
disputed patents occurred before he developed this repu-
tation—five of them were filed before 2005. Certainly, the
record suggests that an element of Dr. Shukh’s reputation
arises from his own combative personality. But there is a
genuine dispute of material fact as to whether
Dr. Shukh’s negative reputation is traceable to Seagate’s
actions. In deciding to the contrary, the district court
improperly made factual inferences in Seagate’s favor.
    There is also a genuine dispute of material fact as to
whether finding for Dr. Shukh on his § 256 claim would
rehabilitate his reputation for accusing others of stealing
his work. If Dr. Shukh prevails in this lawsuit, outsiders
may conclude that Dr. Shukh’s reputation on this point
stemmed from Seagate’s failure to properly credit him.
His reputation could change from an inventor with a
“reputation for accusing others of stealing his work in a
manner that disrupts effective collaboration,” Summary
Judgment Order at *11 n.13, to that of an inventor
wronged by his employer, properly seeking credit for his
14                    SHUKH   v. SEAGATE TECHNOLOGY, LLC

own work. Here, the district court improperly made
factual findings on summary judgment and made factual
inferences in Seagate’s favor when it found this harm was
not redressable.
            III.   Dr. Shukh’s Unemployment
     Finally, Dr. Shukh presented evidence that his al-
leged reputational harm had an economic component.
Dr. Shukh has been unemployed since 2009, and he seeks
a job in the field of technology covered by the disputed
patents. A trier of fact could infer that the stronger
Dr. Shukh’s reputation as an inventor, the more likely he
is to be hired. This is particularly true in light of his
difficult personality. Furthermore, there is evidence tying
Dr. Shukh’s negative reputation at Seagate—including,
one presumes, his reputation for seeking credit for his
own inventions—to his unemployment. Summary Judg-
ment Order at *5 (writing that an engineer at a company
Dr. Shukh interviewed with allegedly told Dr. Shukh that
he would never get a job there because of his reputation
at Seagate). Thus, a trier of fact could conclude that Dr.
Shukh’s employment prospects have been harmed by the
impact of his alleged omission from the disputed patents
on his reputation as an inventor and his reputation for
seeking credit for his own ideas. Moreover, a trier of fact
could infer that Dr. Shukh’s employment prospects would
improve if the inventorship of the disputed patents was
corrected. Dr. Shukh’s inability to obtain employment is
a concrete and particularized financial harm that suffices
to create Article III standing.
    To be sure, we sympathize with the district court. It
issued a number of thoughtful and thorough orders in
what must have been a very difficult case. All things
considered, the district court has done an admirable job
dealing with the many issues raised below. We have
considered Dr. Shukh’s remaining arguments, and find no
SHUKH   v. SEAGATE TECHNOLOGY, LLC                       15

merit in them. We therefore vacate and remand this case
only with respect to the court’s ruling on reputational
injury, and affirm the rest of the district court’s holdings
challenged on appeal.
                       CONCLUSION
    We vacate and remand the district court’s grant of
summary judgment on Dr. Shukh’s claim for correction of
inventorship under 35 U.S.C. § 256 and affirm its remain-
ing holdings.
VACATED AND REMANDED IN PART, AFFIRMED
               IN PART
                          COSTS
   No costs.