Court Opinion

ID: 618057
Source: CourtListenerOpinion
Date Created: 2011-11-30 16:37:00+00
Date Added: 2024-06-11T17:50:43.075980
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
              __________________________

TOBI GELLMAN, AS TRUSTEE OF THE MAYER MICHAEL
              LEBOWITZ TRUST,
             Plaintiff-Appellant,
                           v.
             TELULAR CORPORATION,
                Defendant-Appellee,
                         and
        NAPCO SECURITY SYSTEMS, INC.,
               Defendant-Appellee,
                         and
                   VISONIC INC.,
                  Defendant-Appellee.
              __________________________

                      2011-1196
              __________________________

    Appeal from the United States District Court for the
Eastern District of Texas in case no. 07-CV-0282, Magis-
trate Judge Charles Everingham, IV.
               __________________________

              Decided: November 30, 2011
              __________________________
GELLMAN   v. TELULAR CORP                               2

    CORBY R. VOWELL, Goldstein & Vowell, LLP, of Hous-
ton, Texas, for plaintiff-appellant. With him on the brief
was EDWARD W. GOLDSTEIN.

    JULIANNE M. HARTZELL, Marshall, Gerstein & Borun,
LLP, of Chicago, Illinois, argued for all defendants-
appellees. With her on the brief were THOMAS I. ROSS and
BENJAMIN T. HORTON, for Visonic, Inc; JAMES P. HANRATH
and MARVIN N. BENN, Much Shelist Denenberg, Ament &
Rubenstein, P.C., of Chicago, Illinois; JENNIFER A.
HALTON. DOAN and MORGAN D. VAUGHN, Haltom and
Doan, of Texarkana, Texas for defendant-appellee, Telu-
lar Corporation; JOHN R. MUGNO, Law Offices of John R.
Mugno, of New York, New York and AMANDA A. ABRAHAM,
Law Office of Carl R. Roth, of Marshall, Texas, for defen-
dant-appellee, Napco Security Technologies, Inc.
               __________________________

 Before BRYSON, CLEVENGER, and PROST, Circuit Judges.
CLEVENGER, Circuit Judge.
    Plaintiff Tobi Gellman brought this action for in-
fringement of a patent on which her late husband, Mayer
Michael Lebowitz, is a named co-inventor. Ms. Gellman
is a Trustee of the Mayer Michael Lebowitz Trust (“the
Lebowitz Trust”), which Ms. Gellman claimed was the
sole legal owner of the patent. Because it held that the
Lebowitz Trust was at best a joint legal owner, and be-
cause the co-owner was not a party, the district court
dismissed without prejudice for lack of standing. Gellman
v. Telular Corp., No. 2:07-cv-282, 2010 WL 5173213 (E.D.
Tex. Dec. 14, 2010). We affirm.
                            I
   At issue is U.S. Patent No. 6,075,451 (filed Jul. 15,
1996) (“the ’451 patent”). Mr. Lebowitz was one named
3                                  GELLMAN   v. TELULAR CORP

inventor. The other was the late James Seivert. ’451
patent at [76]. As co-inventors Messrs. Lebowitz and
Seivert (and, subsequently, any heirs or assignees) are
presumptive joint legal owners. 35 U.S.C. §§ 116, 262
(2006).
    It is well-established that a patent infringement case
cannot proceed without the participation of all legal
owners. Crown Die & Tool Co. v. Nye Tool & Mach.
Works, 261 U.S. 24, 40–41 (1923). Mr. Seivert’s heirs are
not parties here, and it was on this basis that the district
court dismissed the case. It rejected Ms. Gellman’s vari-
ous attempts to show that Mr. Seivert’s ownership inter-
est had been legally transferred to Mr. Lebowitz (and, by
extension, to the Lebowitz Trust) as lacking in eviden-
tiary support and misapplying the law. We have jurisdic-
tion to review this final judgment of a district court in a
case arising under the patent laws.             28 U.S.C.
§§ 1295(a)(1), 1338(a) (2006).
                             II
    A dismissal for lack of subject matter jurisdiction is a
procedural question not unique to patent law, and so this
court follows the law of the regional circuit, here the Fifth
Circuit. Madey v. Duke Univ., 307 F.3d 1351, 1358 (Fed.
Cir. 2002). Interpretation of contract terms is typically
reviewed under regional circuit law. DePuy Spine, Inc. v.
Medtronic Sofamor Danek, Inc., 469 F.3d 1005, 1013 (Fed.
Cir. 2006). The question of whether contractual language
effects a present assignment of patent rights, or an
agreement to assign rights in the future, however, is
resolved by the law of this court. DDB Techs., L.L.C. v.
MLB Advanced Media, L.P., 517 F.3d 1284, 1290 (Fed.
Cir. 2008).
   On a motion attacking subject matter jurisdiction as a
matter of fact (i.e., based on evidence beyond the plead-
GELLMAN   v. TELULAR CORP                                  4

ings), a district court in the Fifth Circuit determines the
necessary facts under a preponderance standard and from
that determines if jurisdiction exists. See McNutt v. Gen.
Motors Acceptance Corp. of Ind., 298 U.S. 178, 189 (1936);
New Orleans & Gulf Ry. Co. v. Barrois, 533 F.3d 321, 327
(5th Cir. 2008). The Fifth Circuit reviews district court
jurisdictional findings of fact for clear error. Krim v.
pcOrder.com, Inc., 402 F.3d 489, 494 (5th Cir. 2005). The
Fifth Circuit reviews a district court’s contract interpreta-
tion de novo. Bayou Steel Corp. v. Nat’l Union Fire Ins.
Co., 642 F.3d 506, 509 (5th Cir. 2011). The Fifth Circuit
also reviews a dismissal for lack of subject matter juris-
diction de novo. Krim, 402 F.3d at 494.
                             III
    Ms. Gellman contends that Mr. Seivert was Mr. Le-
bowitz’s employee, and that the terms of his employment
included full transfer of rights to any resulting inventions.
    The evidentiary record, however, is thin and unsup-
portive. Ms. Gellman has been unable to produce any
signed writing describing the terms of this employment.
Instead, she offers a document bearing the title
“AGREEMENT FOR CONSULTING SERVICES,” un-
signed but purporting to set up Mr. Seivert as a consult-
ant to a company that Mr. Lebowitz operated called
Cellular Alarm Systems, Inc. (“Cellular Alarm”). Un-
signed Agrmt., J.A. 244. Ms. Gellman also offers several
canceled checks, signed by either Mr. Lebowitz or herself,
made out to various companies that she says were associ-
ated with Mr. Seivert. From this circumstantial evidence
Ms. Gellman argues for the existence of a contract be-
tween Cellular Alarm and Mr. Seivert along the lines of
the Unsigned Agreement. The statute of frauds is no
obstacle, she contends, because Texas law incorporates a
“partial performance” exception by which a contract can
5                                 GELLMAN   v. TELULAR CORP

exist in certain circumstances even absent a signed writ-
ing.
    Ms. Gellman then claims that the Unsigned Agree-
ment transferred away any and all of Mr. Seivert’s legal
claims to the ’451 patent. The Unsigned Agreement
states:
    [A]ny and all ideas, discoveries, inventions, [etc.]
    . . . developed, prepared, conceived, made, discov-
    ered or suggested by [Mr. Seivert] when perform-
    ing services pursuant to this Agreement . . . shall
    be and remain the exclusive property of Cellular
    Alarm. [Mr. Seivert] agrees to execute any and all
    assignments or other transfer documents which
    are necessary, in the sole opinion of Cellular
    Alarm, to vest in Cellular Alarm all right, title,
    and interest in such Work Products.
Unsigned Agrmt. ¶ 8, J.A. at 245–46.
    These efforts to demonstrate standing, however, fail
as a matter of law. At the outset we note that the lack of
a signed instrument, while troubling, is not fully disposi-
tive. The Patent Act requires that all assignments of
patent interests be in writing. 35 U.S.C. § 261 (2006).
But there are means of transferring patent ownership
beyond assignment, and not all of them require a writing.
Sky Techs. LLC v. SAP AG, 576 F.3d 1374, 1381 (Fed. Cir.
2009). Neither the district court nor the parties expressly
addressed whether the contract here (if one were held to
exist) would be an assignment subject to the requirements
of section 261. Because we conclude that Ms. Gellman’s
argument fails for other reasons, we need not reach this
issue. Even assuming that the Unsigned Agreement’s
language were enforceable as a contract, and that section
261 was no bar—and we refrain from either holding—
neither the cited language nor anything else in the Un-
GELLMAN   v. TELULAR CORP                                   6

signed Agreement is sufficient to confer standing in this
case.
     To proceed without the participation of Mr. Seivert’s
heirs, Ms. Gellman has the burden to prove sole legal
ownership. An equitable claim to title alone will not
suffice. Arachnid, Inc. v. Merit Indus., Inc., 939 F.2d
1574, 1579–80 (Fed. Cir. 1991). Aware of this law, Ms.
Gellman argues that the Unsigned Agreement conveyed
full legal title to Mr. Lebowitz for any invention by Mr.
Seivert because such an invention “shall be and remain
the property of Cellular Alarm.” Unsigned Agrmt. ¶ 8,
J.A. at 245–46. According to Ms. Gellman, in order for
the invention to “remain” it necessarily had to have been
fully conveyed previously. We think the language is not
necessarily so clear. In context, the word “remain” indi-
cates that Mr. Seivert’s contributions to inventions “re-
mained” in equitable status until such a time as Mr.
Seivert “execute[d] any and all assignments or other
transfer documents which are necessary . . . to vest in
Cellular Alarm all right, title and interest” in such inven-
tions. Otherwise, the “execute any and all assignments”
language in the contract is surplusage without relevant
meaning. The most the Unsigned Agreement could do is
create an obligation for Mr. Seivert to assign to Cellular
Alarm. Cellular Alarm (and by extension Mr. Lebowitz)
might therefore have an equitable claim to title. This
claim could be converted to legal title if and when Mr.
Seivert actually assigns or, if necessary, through legal
action. But it did not, and will not, confer legal title
automatically.
     While it is possible for an employee to assign any and
all of his rights to future inventions, this court has consis-
tently required that present assignments of future rights
expressly undertake the assigning act at the time of the
agreement, and not leave it to some future date. See Bd.
7                                 GELLMAN   v. TELULAR CORP

of Trustees of the Leland Stanford Junior Univ. v. Roche
Molecular Sys., Inc., 583 F.3d 832, 841–42 (Fed. Cir.
2009) (finding present assignment in the language “I will
assign and do hereby assign”), aff’d, 131 S. Ct. 2188
(2011); DDB Techs., 517 F.3d at 1290 (same, for language
“agrees to and does hereby grant and assign”); Speedplay,
Inc. v. Bebop, Inc., 211 F.3d 1245, 1253 (Fed. Cir. 2000)
(“hereby conveys, transfers, and assigns”); FilmTec Corp.
v. Allied-Signal Inc., 939 F.2d 1568, 1573 (Fed. Cir. 1991)
(“agrees to grant and does hereby grant”). By that meas-
ure, the language of the Unsigned Agreement is lacking.
Rather than expressly undertake assignment at signing,
it expressly delays assignment to some future date, when
Mr. Seivert would “execute any and all assignments or
other transfer documents” necessary to convey his rights
to Cellular Alarm. The district court was therefore cor-
rect in its conclusion that the Unsigned Agreement, if
enforceable as a contract, could do no more than create an
equitable claim for the Lebowitz Trust. And as already
mentioned equitable claims do not themselves confer
standing.
    The same logic applies to Ms. Gellman’s claim that
the “hired to invent” doctrine can save her standing.
Courts have in some cases held that the inventions of an
employee hired to make that invention fairly belong to the
employer. See, e.g., Solomons v. United States, 137 U.S.
342, 346 (1890). But this doctrine is expressly equitable,
and creates only an obligation for the employee to assign
to his employer. Melin v. United States, 478 F.2d 1210,
1213 (Ct. Cl. 1973); see also Banks v. Unisys Corp., 228
F.3d 1357, 1359 (Fed. Cir. 2000). It cannot save Ms.
Gellman’s case.
    Ms. Gellman also argues that the district court should
have granted her additional discovery before dismissing
her case. But we see no error there. Ms. Gellman had
GELLMAN   v. TELULAR CORP                                  8

several months in which to conduct discovery before
either the motion to dismiss or the dismissal order. Her
brief opposing dismissal made no mention of a need for
further discovery. And the district court’s dismissal was
without prejudice. We understand that Ms. Gellman has
initiated proceedings to further pursue her claim, and we
see no reason she cannot take discovery there. When and
if her claim to legal title is confirmed, she can re-initiate
this infringement action and begin anew.
    For the foregoing reasons, the district court did not
err in dismissing without prejudice Ms. Gellman’s case for
lack of standing. We reject appellees’ contention that the
dismissal should have been with prejudice.
    Because Ms. Gellman’s appeal was not frivolous, we
deny Appellees’ motion for damages and single or double
costs. Fed. R. App. P. 38.
                       AFFIRMED