Court Opinion

ID: 16763
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:57:37+00
Date Added: 2024-06-11T16:46:39.281852
License: Public Domain

Revised January 26, 1999

                    UNITED STATES COURT OF APPEALS
                         For the Fifth Circuit
              __________________________________________

                             No. 98-50572
                           Summary Calendar
              _________________________________________

                           JAMES E. WRIGHT

                Plaintiff-Counter Defendant-Appellant,

                                VERSUS

            UNITED STATES OF AMERICA, and its Agency,
                   the Department of Agriculture;
          WILLARD J. PHELPS, Technology Transfer Officer
                 of the United States Department of
         Agriculture; SECRETARY UNITED STATES DEPARTMENT
            OF AGRICULTURE; DANIEL GLICKMAN, Secretary
              United States Department of Agriculture

                         Defendant-Appellees,

                                 and

                    TROY BIOSCIENCES, INCORPORATED

        Intervenor Defendant-Counter Plaintiff-Appellee.

              __________________________________________

          Appeal from the United States District Court
                for the Western District of Texas
           __________________________________________
                         January 19, 1999

Before REYNALDO G. GARZA, JOLLY, and, WIENER Circuit Judges.

PER CURIAM:

                 I. FACTUAL AND PROCEDURAL BACKGROUND

     Dr. James Wright (“Wright”), while working for United States

Department of Agriculture (“USDA”), isolated a specific strain of
BB fungus that was effective against boll weevils and other crop

damaging insects such as leafhoppers and whiteflies.   Combined

with an attractant and a food source, the strain would infect the

insect either by ingestion or physical contact and provide an

effective means for controlling these pests.   This particular

strain of fungus was deposited and stored as ATCC No. 74040.

     Wright petitioned the government to grant him the ownership

rights to the invention.   On February 24, 1997, the Office of the

General Counsel of the USDA issued a formal determination stating

that the domestic patent rights in the invention belonged to the

Government.   Wright appealed this decision to the Department of

Commerce.

     On October 10, 1997, following an administrative hearing,

the Department of Commerce affirmed the USDA’s ownership rights

to the invention.   On November 13, 1997, it denied Wright’s

request for reconsideration.

     A suit in district court followed and each party filed a

motion for partial summary judgment.   The motions by the

defendants-appellees: United States; Willard J. Phelps,

Technology Transfer Officer of the United States Department of

Agriculture; and Daniel Glickman, Secretary United States

Department of Agriculture, addressed whether the final

determination of the United States Commerce Department in favor

of the USDA was arbitrary and capricious.

     Wright raised a second issue in district court: whether the

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USDA has the right to grant an exclusive license to Troy

Biosciences, Incorporated (“TBI”).    Since, the district court

found that the government owned the entire right, title and

interest in the invention, the second issue was not addressed.

                          II. STANDARD OF REVIEW

     In making its determination of the issues, this Court may

only set aside an agency’s decision if that decision is found to

be “arbitrary, capricious, an abuse of discretion, or otherwise

not in accordance with law.”    5 U.S.C. § 706.    The agency’s

decision does not have to be ideal so long as the agency gave at

least minimal consideration to relevant facts contained in the

record.    Harris v. United States, 19 F.3d 1090, 1096 (5th Cir.

1994).    As long as a rational basis for the agency’s decision

exists, it is not considered an abuse of discretion.      Id.

                           III. DISCUSSION

     The issue presented is whether pursuant to Commerce

Department Regulation, 37 C.F.R. § 501 et seq., the invention

belongs to the Government under § 501.6(a)(1) of the regulation,

or if Wright has a valid ownership claim under § 501.6(a)(2).

The relevant parts of § 501.6 read as follows:

     (a) The following rules shall be applied in determining

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     the respective rights of the Government and of the
     inventor in and to any invention that is subject to the
     provisions of this part:
     (1) The Government shall obtain, except as herein
     otherwise provided, the entire right, title and
     interest in and to any invention made by any Government
     employee.

                               * * *

     (2) In any case where the contribution of the
     Government, as measured by any one or more of the
     criteria set forth in paragraph (a)(1) of this section,
     to the invention is insufficient equitably to justify a
     requirement of assignment to the Government of the
     entire right, title and interest in and to such
     invention, or in any case where the Government has
     insufficient interest in an invention to obtain the
     entire right, title and interest therein (although the
     Government could obtain same under paragraph (a)(1) of
     this section), the Government agency concerned shall
     leave title to such invention in the employee, subject
     however to the reservation to the Government of a
     nonexclusive, irrevocable, royalty-free license in the
     invention with power to grant licenses for all
     governmental purposes.

     (Emphasis added).

     It is undisputed that Wright made the invention during

working hours as a government employee, that government funds

were used for the discovery and that the discovery was directly

related to the duties of Wright’s employment.

     Wright asserts that the government was only interested in

publishing his invention and did not initially file an

application for a patent.   This, he asserts, impliedly granted

him the right to patent the invention under § 501.6(a)(2).

     The USDA argues, as stated in the Department of Commerce’s

                                 4
opinion, “An agency’s desire to publish an invention, does not

necessarily mean that it is not interested in the invention.”

Therefore, the fact that the government wanted to publish the

invention did not constitute an “insufficient interest in the

invention” under § 501.6(a)(2).   The Department of Commerce held

that Wright did not have a valid claim to the invention under §

501.6(a)(2) because the government’s rights remained solely

within the purview of § 501(a)(1).

     In determining what constitutes “insufficient interest” for

purposes of § 501(a)(2), this Court relies upon the Supreme

Court’s holding in Thomas Jefferson Univ. v. Shalala, 512 U.S.
504, 512(1994), where the Court discusses an agency’s right to

interpret its own rules.   In Shalala, the Court held that an

agency’s interpretation of its own rules must be given

controlling weight unless it is plainly erroneous or inconsistent

with the regulation.   Id. at 512.

     Upon review of the lengthy record provided in this appeal

and a review of the district court’ holding, this Court concludes

that there was no abuse of discretion in determining that the

USDA has the right of ownership over this invention.   This Court

grants great deference to the USDA’s interpretation of the words

“insufficient interest” in § 501.6(a)(2).   We do not find any

language in this section which would lead us to believe that the

district court’s holding is blatantly inconsistent with § 501 and

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its relevant sub-parts.   Moreover, since the government

rightfully possesses ownership to this invention, we need not

address the issue of whether the USDA has the right to grant an

exclusive license to Troy Biosciences, Incorporated.

                             IV. CONCLUSION

     Accordingly, we AFFIRM the district court’s holding.

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