Court Opinion

ID: 4551516
Source: CourtListenerOpinion
Date Created: 2020-07-28 16:00:36.032223+00
Date Added: 2024-06-11T09:24:21.614055
License: Public Domain

Case: 19-2016   Document: 56     Page: 1   Filed: 07/28/2020

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

                 GREGORY C. JAMES,
                   Plaintiff-Appellant

                            v.

       J2 CLOUD SERVICES, LLC, ADVANCED
        MESSAGING TECHNOLOGIES, INC.,
               Defendants-Appellees
              ______________________

                       2019-2016
                 ______________________

    Appeal from the United States District Court for the
 Central District of California in No. 2:16-cv-05769-CAS-
 PJW, Senior Judge Christina A. Snyder.
                  ______________________

                 Decided: July 28, 2020
                 ______________________

    OBI ILOPUTAIFE, Cotman IP Law Group, PLC, Pasa-
 dena, CA, for plaintiff-appellant. Also represented by
 DANIEL CHARLES COTMAN.

     GUY RUTTENBERG, Ruttenberg IP Law, PC, Los Ange-
 les, CA, for defendants-appellees. Also represented by
 BASSIL GEORGE MADANAT.
                  ______________________
Case: 19-2016    Document: 56     Page: 2     Filed: 07/28/2020

 2                           JAMES   v. J2 CLOUD SERVICES, LLC

     Before DYK, TARANTO, and HUGHES, Circuit Judges.
 DYK, Circuit Judge.
     U.S. Patent No. 6,208,638 (“the ’638 patent”) is owned
 by Advanced Messaging Technologies, Inc., licensed to J2
 Cloud Services, LLC (collectively, “defendants”), and lists
 Jaye Muller and Jack Rieley as the inventors. Appellant
 Gregory C. James claims to be the sole inventor of the in-
 ventions claimed in the ’638 patent. James sued the de-
 fendants in the United States District Court for the Central
 District of California, seeking correction of inventorship
 under 35 U.S.C § 256 and asserting various state-law
 claims based on his claimed inventorship. The district
 court entered summary judgment in favor of the defend-
 ants and against James. We affirm.
                        BACKGROUND
     The ’638 patent is entitled “Method and Apparatus for
 Transmission and Retrieval of Facsimile and Audio Mes-
 sages Over a Circuit or Packet Switched Network.” J.A. 39.
 The patent is directed to sending messages using telephone
 and facsimile units connected to circuit switched networks
 (such as telephone networks) through a communications
 server connected to a packet switched network (such as in-
 ternet networks) that uses internet protocols. The ’638 pa-
 tent claims methods and systems that are directed to
 receiving an incoming call signal and sending a digital rep-
 resentation of the signal to final destinations using com-
 munication servers. The patent discloses embodiments
 where the communications server digitizes audio messages
 received from a circuit switched network (e.g., voicemails)
 and then sends the digitized messages as an email attach-
 ment to the recipient. It appears that the claims also cover
 converting and sending facsimile messages through
 emails. A representative claim is method claim 13:
     A method comprising:
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 JAMES   v. J2 CLOUD SERVICES, LLC                           3

          receiving a first incoming call signal des-
          tined for a first communications server for
          processing of an audio message into a digi-
          tal representation;
          determining if a first condition has oc-
          curred;
          redirecting the first incoming call signal
          from the first communications server to a
          second communications server based on
          the determining of the first condition,
          wherein the first incoming call signal in-
          cludes a particular inbound address
          uniquely associated with a user account
          and at least one destination address on a
          packet switched network, and wherein the
          particular inbound address remains un-
          changed during the redirecting;

          extracting the particular inbound address;
          determining, based on the particular in-
          bound address, a user account status and
          the at least one destination address on the
          packet switched network; and,
          sending the digital representation to the at
          least one destination address, wherein the
          particular inbound address is uniquely as-
          signed to the user account and the at least
          one destination address comprises at least
          one email address.
 J.A. 54 (alterations omitted). The named inventors are
 Jaye Muller and Jack Rieley. James asserts that he is the
 sole inventor of the inventions claimed in the ’638 patent
 based on a system he developed for Muller and Rieley in
 the mid-1990s.
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 4                            JAMES   v. J2 CLOUD SERVICES, LLC

     We state the facts in James’s favor as this appeal arises
 from a grant of summary judgment. In 1994, Muller and
 Rieley, the named inventors of the ’638 patent, came up
 with the idea to receive voicemails and faxes through
 email. In December 1995, they founded JFAX Communi-
 cations, Inc. (“JFAX”) to commercialize this idea. Also in
 late 1995, Muller and Rieley asked James, who was in Aus-
 tralia, to develop a prototype that sent voicemails and faxes
 (that were addressed by a telephone number) to an email
 address.
     After demonstrating a prototype, James traveled to the
 United States to develop a commercial system for JFAX.
 In February 1996, James, on behalf of GSP Software (a
 partnership he “contemplated” with his friends), entered
 into a Software Development Agreement with JFAX, where
 GSP Software agreed to develop commercially viable “Fax
 to E-Mail,” “E-Mail to Fax,” and “Voice-Mail to Email” sys-
 tems. 1 After completing his work, James returned to

     1  The Software Development Agreement refers to
 the “Fax to E-Mail” system as
     [a] commercially viable system for enabling faxes
     to be received via advanced telecommunications
     equipment located anywhere in the world and then
     transmitted over the Internet to electronic mail ad-
     dresses of JFAX customers[;]
 the “E-Mail to Fax” system as
     [a] commercially viable system for enabling faxes
     to be sent by via JFAX using popular word proces-
     sor, spreadsheet or graphics software programs.
     The outgoing faxes will be sent via the Internet to
     a JFAX Server and forwarded as fax messages to
     any fax number in the world[; and]
 the “Voice-Mail to Email” system as
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 JAMES   v. J2 CLOUD SERVICES, LLC                           5

 Australia in 1996 and was compensated by JFAX stock
 that he later sold.
      The patent application underlying the ’638 patent was
 filed by JFAX on April 1, 1997. The patent issued on
 March 27, 2001, listing Rieley and Muller as the inven-
 tors. 2 The ’638 patent was eventually assigned to defend-
 ant Advanced Messaging Technologies, Inc. and licensed to
 defendant j2 Cloud Services, LLC. By 2016, JFAX changed
 its name several times and ultimately became defendant j2
 Cloud Services, LLC.
     James asserts that the JFAX system is his invention.
 James also claims that the JFAX system is the inventions
 claimed in the ’638 patent and that Muller and Rieley
 wrongfully secured a patent on that system.
     On August 3, 2016, James (having learned of the
 ’638 patent) filed a complaint in the District Court for the
 Central District of California against Advanced Messaging
 Technologies, Inc. and j2 Cloud Services, Inc., 3 asserting
 sole inventorship of claims of the ’638 patent and seeking
 correction of inventorship under section 256. On motion,

    [a] commercially viable system for enabling voice
    mail messages to be received via advanced telecom-
    munications equipment located anywhere in the
    world and then transmitted over the Internet to
    electronic mail addresses of JFAX customers.
 J.A. 104–05.
    2     On December 9, 2008, the United States Patent
 and Trademark Office issued an ex parte reexamination
 certificate for the ’638 patent that amended claims and
 added new claims.
     3    On September 27, 2016, James filed a first
 amended complaint, adding defendant j2 Cloud Services,
 LLC to the action.
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 6                            JAMES   v. J2 CLOUD SERVICES, LLC

 the district court dismissed the complaint for “lack[] [of]
 standing to assert [an] inventorship claim” on the grounds
 that James failed to sufficiently allege that “he ha[d] an
 ownership or financial interest in the ’638 patent.”
 J.A. 1511. On appeal, we reversed because there were fac-
 tual disputes as to whether James had assigned his
 claimed patent rights to the defendants. James v. j2 Cloud
 Servs., LLC, 887 F.3d 1368, 1373–76 (Fed. Cir. 2018).
      On remand, the parties stipulated to limited discovery
 concerning James’s inventorship claim and issues involv-
 ing the statute of limitations. On January 17, 2019, James
 filed the operative (fourth) amended complaint, asserting
 sole inventorship of the claims of the ’638 patent and alleg-
 ing claims for fraudulent concealment, unjust enrichment,
 and conversion. 4
     On defendants’ motion, the district court granted sum-
 mary judgment, holding that the “defendants [we]re enti-
 tled to summary judgment on [James’s] claim for sole
 inventorship of the [’]638 patent.” J.A. 11. The district
 court found that the evidence that James relied on at most
 showed only that “he developed a prototype of a system
 that could convert a voicemail or fax to an email.” J.A. 8.
 It held that there was no clear and convincing evidence
 showing that James’s system practiced the patent claims
 or that James “alone conceived of each element of the
 40 claims of that patent.” Id. There also was no “genuine
 dispute as to whether Muller and Rieley at least shared in

     4    James also asserted a claim for violation of Califor-
 nia’s unfair competition law. The district court dismissed
 this claim for failure to state a claim. James does not chal-
 lenge this dismissal on appeal.
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 JAMES   v. J2 CLOUD SERVICES, LLC                            7

 the conception of some of the subject matter of the claimed
 invention.” 5 J.A. 11.
       As to the state-law claims, the district court held that
 the three-year “statute of limitations on [James’s] state law
 claims started to run in 2001 (at the latest) and that each
 of [his] state law claims [we]re barred by the applicable
 statute of limitations” because he had “possessed infor-
 mation that put him on notice of his claims as early as 2001
 . . . [but] was not diligent” in pursuing the claims. J.A. 21–
 22.
     James now appeals. We have jurisdiction pursuant to
 28 U.S.C. § 1295(a)(1). We review grant of summary judg-
 ment de novo.
                          DISCUSSION
                   I. Sole Inventorship Claim
    James argues that the district court erred in granting
 summary judgment against him on his inventorship claim.
     “Determining ‘inventorship’ is nothing more than de-
 termining who conceived the subject matter at issue[] . . . .”
 Sewall v. Walters, 21 F.3d 411, 415 (Fed. Cir. 1994). “It is
 settled that in establishing conception a party must show
 possession of every feature recited in the count, and that
 every limitation of the count must have been known to the
 inventor at the time of the alleged conception.” Coleman v.
 Dines, 754 F.2d 353, 359 (Fed. Cir. 1985). “[I]nventorship
 is determined on a claim-by-claim basis.” Gemstar-TV

     5   The district court also concluded that the inventor-
 ship claim was barred by the doctrine of laches because
 James “had enough information to place upon him a duty
 of inquiry and thus a reasonable person in his position
 should have known that the [’]639 Patent issued in 2001”
 but delayed for 15 years in filing suit. J.A. 15. In light of
 our disposition, we do not reach the issue of laches.
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 8                            JAMES   v. J2 CLOUD SERVICES, LLC

 Guide Int’l, Inc. v. Int’l Trade Comm’n, 383 F.3d 1352, 1381
 (Fed. Cir. 2004). “The inventors as named in an issued pa-
 tent are presumed to be correct.” Hess v. Advanced Cardi-
 ovascular Sys., Inc., 106 F.3d 976, 980 (Fed. Cir. 1997)
 (quoting Amax Fly Ash Corp. v. United States, 514 F.2d
1041, 1047 (Ct. Cl. 1975)).
     We conclude that the district court did not err in grant-
 ing summary judgment against James on the inventorship
 claim.
     Here, the evidence that James points to does not sup-
 port his claim that he conceived the inventions in the
 ’638 patent. James testified that (1) he believed he was the
 “sole inventor of the technology claimed in the ’638 patent,”
 J.A. 340, and (2) when he looked at the patent he realized
 “that’s exactly what [he] invented,” J.A. 377. Such conclu-
 sory and self-serving testimony is insufficient to survive a
 motion for summary judgment. Sitrick v. Dreamworks,
 LLC, 516 F.3d 993, 1001 (Fed. Cir. 2008) (“Conclusory . . .
 assertions [of a witness] cannot raise triable issues of ma-
 terial fact on summary judgment.”); Invitrogen Corp. v.
 Clontech Labs., Inc., 429 F.3d 1052, 1068 (Fed. Cir. 2005)
 (holding that a witness’s conclusory assertion that the evi-
 dence demonstrated “conception, diligence[,] and reduction
 to practice” did not carry a party’s burden on summary
 judgment); see also Tech. Dev. Corp. v. United States, 597
F.2d 733, 747 (Ct. Cl. 1979) (“The proof of conception and/or
 reduction to practice is a heavy one for either party and
 requires more than self-serving testimony or uncorrobo-
 rated records and documents.”).
     James also asserts that the fact that he was paid JFAX
 stock gives rise to an inference that he delivered “the later-
 patented JFAX system.” Appellant Br. 15. He also claims
 that “JFAX’s allegedly-2001 press release” admits that his
 prototype implemented the same functions of the “later-
 claimed JFAX system” because the press release states
 that the ’638 patent’s technology “allow[ed] both faxes and
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 JAMES   v. J2 CLOUD SERVICES, LLC                           9

 voice messages to be received without the end user needing
 either a fax machine or a voice-mail system.” Id. (quoting
 J.A. 424). 6 We are unpersuaded by James’s arguments
 that his evidence supports conception.
     We conclude that James failed to provide evidence from
 which a reasonable juror could conclude that he conceived
 and “possess[ed] . . . every feature recited in the c[laims]”
 of the ’638 patent. Davis v. Reddy, 620 F.2d 885, 889
 (C.C.P.A. 1980). The district court properly granted sum-
 mary judgment on James’s sole inventorship claim in favor
 of the defendants.
                     II. State-Law Claims
     The district court granted summary judgment against
 James on his state-law claims for fraudulent concealment,
 unjust enrichment, and conversion because they were
 barred by the three-year statute of limitations. The basic
 theory underlying these claims is that James developed the
 system for JFAX in the mid-1990s, and that the defendants
 wrongfully secured the ’638 patent based on “the inventive
 systems and methods [he] created.” Appellant’s Reply
 Br. 18. Although James’s allegations concern his work for
 Muller and Rieley in the mid-1990s and the ’638 patent
 that issued in 2001, James filed this action in 2016.
     James does not dispute that his state-law claims were
 subject to statute of limitations of at most three years

     6   James also argues that “Muller admit[ted] [that]
 James’s system and the ’638 patent are the same,” citing to
 an excerpt of Muller’s deposition transcript. Appellant
 Br. 14. However, that excerpt does not appear to have been
 made part of the record before the district court. In any
 case, the testimony James points to makes no statement
 that the system he developed corresponded to all claims of
 the ’638 patent.
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 10                           JAMES   v. J2 CLOUD SERVICES, LLC

 under California law. 7 Under California’s discovery rule,
 the statute of limitations begins to run when a plaintiff sus-
 pects or should suspect that his injury was caused by some-
 one’s wrongdoing, i.e., when he has “notice or information
 of circumstances to put a reasonable person on inquiry.”
 Jolly v. Eli Lilly & Co., 751 P.2d 923, 927–28 (Cal. 1988)
 (emphasis omitted). The district court here held that the
 state-law claims were barred by the applicable statute of
 limitations because the evidence established only one legit-
 imate inference that James “possessed information that
 put him on notice of his claims as early as 2001 and that he
 was not diligent.” J.A. 21.
     James claims that the defendants wrongfully concealed
 the filing of the application that lead to the ’638 patent de-
 spite their duty to inform him of the application under this
 court’s decision in University of Colorado Foundation, Inc.
 v. American Cyanamid Co., 196 F.3d 1366, 1373 (Fed. Cir.
 1999) (holding that there was “an equitable duty to disclose
 the patent application to the true inventors”). James also
 alleges that the Software Development Agreement re-
 quired the defendants to inform him if they no longer
 treated the developed software as a secret and that the fil-
 ing of the ’638 patent’s application without such a commu-
 nication breached this duty. James contends that he had
 no reason to have learned about the ’638 patent in 2001
 when it issued because he left JFAX in late 1996 and sold
 his JFAX shares by early 2000.

      7    In California, fraudulent concealment and conver-
 sion claims are subject to a three-year statute of limita-
 tions. Platt Elec. Supply, Inc. v. EOFF Elec., Inc., 522 F.3d
1049, 1054, 1060 (9th Cir. 2008); Daly v. Pearl Spirits, Inc.,
 438 F. App’x 644, 645 (9th Cir. 2011). An unjust enrich-
 ment claim is subject to a three-year statute of limitations
 if it is based on fraud or mistake. Fed. Deposit Ins. Corp.
 v. Dintino, 84 Cal. Rptr. 3d 38, 50 (Ct. App. 2008).
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 JAMES   v. J2 CLOUD SERVICES, LLC                             11

      We disagree. Even if the defendants breached their
 duty to James by failing to advise him of the filing of the
 ’638 patent’s application, he would still have had notice of
 the issuance of the ’638 patent in 2001. Although the ap-
 plication was not public, by the time the patent issued,
 James would have learned patent applications had been
 filed by the defendants’ predecessors.
     It is undisputed that James received documents con-
 cerning JFAX’s IPO in June 1999. 8 He received the “Un-
 derwriting Agreement,” which states that JFAX filed “a
 registration statement on Form S-1” with the Securities
 and Exchange Commission (“SEC”), J.A. 617, and that
 “[JFAX] and its subsidiary own[ed] or ha[d] sufficient
 rights to use all patents, patent rights . . . currently em-
 ployed by them in connection with the business . . . oper-
 ated by them[] . . . ,” J.A. 629. James in June 1999 also
 received JFAX’s “Selling Stockholders’ Irrevocable Power
 of Attorney” (“Power of Attorney”) and signed this docu-
 ment acknowledging “receipt of a copy of the Amendment
 No. 1 to the Registration Statement on Form S-1 . . . (the
 ‘Registration Statement’)” and his “review[] [of] the Regis-
 tration Statement.” 9       J.A. 1339.   The Registration

     8    JFAX Communications, Inc. changed its name to
 JFAX.COM, Inc. on April 15, 1999, prior to its IPO. We
 refer to both names as “JFAX” in this opinion.
     9    The Power of Attorney also states:
     The undersigned [(i.e., James)] has no knowledge
     of any material fact or condition that is not set forth
     in the Registration Statement . . . .
     The undersigned will furnish any and all infor-
     mation which [JFAX] . . . deems necessary or desir-
     able in connection with the preparation and filing
     of all amendments, post-effective amendments and
     supplements to the Registration Statement[] . . . .
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 12                           JAMES   v. J2 CLOUD SERVICES, LLC

 Statement, filed with the SEC on May 26, 1999, makes
 clear that “[JFAX had] multiple pending U.S. patent appli-
 cations . . . for proprietary aspects of the major components
 of [its] technology, but [JFAX had] no issued patents.”
 J.A. 1335.
     A reasonable person who received the Underwriting
 Agreement and Power of Attorney would have reviewed the
 Registration Statement and thus should have known that
 JFAX had pending patent applications covering “proprie-
 tary aspects of the major components of [its] technology”
 that James alleges to have developed. J.A. 1335. James
 also testified that he went to JFAX’s website “to see what
 they’re doing” after he completed his work, J.A. 373, and
 that he was familiar with searching patents. James was
 on notice that the defendants had a patent application that
 likely would issue and a reasonable person would have con-
 ducted a search for the issued patent.
     In any case, the ’638 patent issued on March 27, 2001,
 and on May 17, 2001, j2 Global Communications, Inc. 10 is-
 sued a press release, announcing the issuance of the
 ’638 patent with Muller and Rieley as the inventors and
 stating that the patent’s technology “allow[ed] both faxes
 and voice messages to be received without the end user
 needing either a fax machine or a voice-mail system.”
 J.A. 424. Indeed, James testified that he was “aware that
 j2 had patents” “all along.” 11 J.A. 1029. Given these un-
 disputed facts, the district court did not err in concluding
 that a reasonable person in James’s position would have

 J.A. 1342.
     10  j2 Global Communications, Inc. is one of the previ-
 ous names used by defendant j2 Cloud Services, LLC.
     11  James contends that he knew “j2” rather than
 “JFAX” had patents. Appellant’s Reply Br. 2. However,
 there is no factual dispute that the later “j2” entities
 changed their corporate name from JFAX.
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 JAMES   v. J2 CLOUD SERVICES, LLC                          13

 known that JFAX and its successors had secured the
 ’638 patent in 2001 and the nature of that patent.
     We conclude that James had sufficient “notice or infor-
 mation of circumstances to put a reasonable person on in-
 quiry” regarding his state-law claims concerning the
 ’638 patent by 2001. Jolly, 751 P.2d at 927–28. Here, “the
 uncontradicted facts . . . are susceptible of only one legiti-
 mate inference, [and thus] summary judgment [wa]s
 proper.” Id. at 928–29.
                          CONCLUSION
     We affirm the district court’s grant of summary judg-
 ment against James on his sole inventorship claim and
 state-law claims.
                         AFFIRMED