INTENSE FOCUS. EXCEPTIONAL OUTCOMES.
35 U.S.C. § 256 Actions in District Court for Correction of Inventorship of Patents
Broadly speaking, 35 U.S.C. § 256 actions are brought in federal district court to correct the inventorship listed on a U.S. patent. Specifically, if a patent lists somebody as an inventor who is not actually an inventor, or where an inventor has been left off the patent entirely, 35 U.S.C. § 256 authorizes federal district courts to issue an order directing the patent be corrected to properly reflect inventorship.
Whether or not inventors are properly listed on a patent can have important ramifications in enforcing it. Specifically, if a patent does not properly list all inventors, then the claims can be held invalid, the patent rendered unenforceable, or litigation related to enforcement of the patent dismissed based on failure to properly join all inventors.
These risks of failing to properly include all inventors on a patent stem from the United States Constitution. Specifically, the Constitution provides
The Congress shall have power . . . To promote the progress of science and useful arts by, securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.
See U.S. Const. art. I, § 8, cl. 8. Since the Constitution requires that patent rights are to be granted to “inventors,” this means that those rights can only be granted to individuals and cannot be granted to business entities. See Manual of Patent Examination Procedure (“MPEP”) § 2137.07. That is, since corporations and business entities have no ability to take actions without people acting on their behalf, only people can conceive of and contribute to patentable inventions.
While business entities cannot in and of themselves create a new invention, they can, however, own patents. For example, after a patent is granted to an inventor, it can be assigned to a business entity such that the business will own the patent even though individual people are listed as inventors. Indeed, this is not an uncommon and is frequently the case in businesses oriented towards conducting research and developing new technologies where employees have an obligation to assign any invention they create within their scope of employment with the company.
Because only individuals can contribute to an invention, when a patent application is filed with the United States Patent and Trademark Office (“USPTO”), all individuals who contributed to the conception of the patented idea must be named as inventors on the patent. If the inventors are improperly named or inventors are left off the patent entirely, it can result in serious issues for enforcing the patent late against a business or individual that is infringing on the patent.
Where the inventors listed on a patent are incorrect, the patent will need to be corrected in order to properly make it enforceable. Correction of a named inventor can be done through either the USPTO or by filing a lawsuit in court requesting correction of the patent under 35 U.S.C. § 256(b). While this article is primarily aimed at discussing correction of inventorship actions under the statute, a primer on the legal definition of “inventorship” is provided first.
Who Qualifies as an Inventor
The legal definition of an “inventor” has been interpreted by the courts to be dependent on the conception of the patented idea. Thus, any individual who contributes to the conception of the patented idea should be listed as an inventor on the applicable patent. What qualifies as “conception” has been more specifically outlined by the Federal Circuit Court of Appeals:
Conception is the touchstone of inventorship, the completion of the mental part of invention. It is “the formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention, as it is hereafter to be applied in practice.” Conception is complete only when the idea is so clearly defined in the inventor’s mind that only ordinary skill would be necessary to reduce the invention to practice, without extensive research or experimentation. Because it is a mental act, courts require corroborating evidence of a contemporaneous disclosure that would enable one skilled in the art to make the invention.
Thus, the test for conception is whether the inventor had an idea that was definite and permanent enough that one skilled in the art could understand the invention; the inventor must prove his conception by corroborating evidence, preferably by showing a contemporaneous disclosure. An idea is definite and permanent when the inventor has a specific, settled idea, a particular solution to the problem at hand, not just a general goal or research plan he hopes to pursue. The conception analysis necessarily turns on the inventor’s ability to describe his invention with particularity. Until he can do so, he cannot prove possession of the complete mental picture of the invention. These rules ensure that patent rights attach only when an idea is so far developed that the inventor can point to a definite, particular invention.
See Burroughs Wellcome Co. v. Barr Laboratories, Inc., 40 F.3d 1223, 1227-28 (Fed. Cir. 1994) (internal citations omitted). See also Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., 776 F.3d 837, 845 (Fed. Cir. 2015).
Accordingly, only those who have contributed to the conception of the patented idea are considered inventors. Notably, in order to be listed as an inventor, that individual must have contributed to a claim that was ultimately patented and not simply one that was initially filed in the patent application. This is an important distinction since the claims in an original patent application are frequently amended, changed, or removed by the time the patent is granted. Thus, individuals that contributed only to claims that were removed from the patent before it was granted should not be listed as inventors on the patent.
In addition to contributing to the conception of an invention, an inventor’s contribution must also be significant when viewed in light of the full invention. In particular, where an individual supplies a component essential to an invention, that individual is considered an inventor only where the essential component and the principles of its use were not known in the prior art. See Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., 776 F.3d 837, 845 (Fed. Cir. 2015). Put in other words, if an individual contributes something that is already known in that field, then that person has not made a significant contribution and does not qualify as an inventor for purposes of the patent.
Lastly, where an individual is asserting in court – as opposed to the USPTO – that she contributed to the conception of a patented invention, she must also provide evidence corroborating her contribution to that invention. That is, individuals must provide additional evidence aside from their testimony that demonstrates they did, in fact, make a significant contribution to the patented invention. See General Electric Co. v. Wilkins, 750 F.3d 1324, 1330 (Fed. Cir. 2014); Coleman v. Dines, 754 F.2d 353, 224 USPQ 857 (Fed. Cir. 1985).
Corroborating evidence is required to safeguard against individuals mischaracterizing events to make it appear that they contributed to conception of the invention. Examples of corroborating evidence include, but are not limited to, technical drawings, laboratory notebooks, charts, graphs, communications, and invention disclosure forms. See Mahurkar v. C.R. Bard, 79 F.3d 1572 (Fed. Cir. 1996); Price v. Symsek, 988 F.2d 1187, 1195 (Fed. Cir., 1993).
Change of Inventorship under 35 U.S.C. § 256
While inventors must be disclosed during the patenting process with the USPTO, that doesn’t necessarily mean that inventors are properly disclosed and properly listed on a subsequently granted patent. If a patent is issued with improper inventors there are two primary avenues, as delineated in 35 U.S.C. § 256, through which inventorship of the patent can be corrected. Specifically, 35 U.S.C. § 256 provides:
(a)Correction.— Whenever through error a person is named in an issued patent as the inventor, or through error an inventor is not named in an issued patent, the Director may, on application of all the parties and assignees, with proof of the facts and such other requirements as may be imposed, issue a certificate correcting such error.
(b)Patent Valid if Error Corrected.— The error of omitting inventors or naming persons who are not inventors shall not invalidate the patent in which such error occurred if it can be corrected as provided in this section. The court before which such matter is called in question may order correction of the patent on notice and hearing of all parties concerned and the Director shall issue a certificate accordingly.
Accordingly, the first avenue for correction is through the USPTO which requires joint application of all inventors and assignees of the patent. The second avenue for correction is to file a lawsuit and request that the presiding court order correction of the patent.
Importantly, 35 U.S.C. § 256 provides for correction of inventorship in two different situations: (1) non-joinder of an inventor; and (2) misjoinder of an inventor. Nonjoinder of an inventor occurs when an inventor is left off the patent. In contrast, misjoinder occurs when a person who is not an inventor is mistakenly listed as one. See Red Carpet Studios v. Midwest Trading Group, Inc., 1:12cv501 (S.D. Ohio, W. Div.).
Notably, while the U.S. patent statutes used to require that an error in inventorship occur without deceptive intent by the omitted inventor, recent amendments to the patent statutes – specifically, the Leahy-Smith America Invents Act – removed all inquiries into the subjective issues of intent such that correction of inventorship actions can still be pursued even where there is deceptive intent. See Cyber Acoustics, LLC v. Belkin Int’l, Inc., 988 F.Supp.2d 1236, 1244 (D. Or.); Armitage, Understanding the America Invents Act and Its Implications for Patenting, 40 AIPLA Q.J. at 125, 130-31; Katherine E. White, “There’s a Hole in the Bucket:” the Effective Elimination of the Inequitable Conduct Doctrine, 11 J. Marshall Rev. Intell. Prop. L. 716, 732, n.162 (2012).
While deceptive intent is no longer a factor in pursuing a correction of inventorship action, waiting to pursue that action may prevent the claiming party from doing. Specifically, if an action to change inventorship is brought more than 6 years after the patent was issued then a presumption of laches arises. Under this scenario, the party seeking the change of inventorship is presumptively barred from bringing the claim because a significant amount of time has passed. Unless the party can rebut that presumption, she will be prevented from pursuing her claim. See Pei-Herng Hor v. Ching-Wu Chu, 699 F.3d 1331, 1336 (Fed. Cir. 2012) (holding that laches for a change of inventorship action under 35 U.S.C. § 256 begins to accrue from the issuance of the patent, not when the omitted inventor knew of should have known of the omitted inventorship).
Standing to Bring a 35 U.S.C. § 256 Action
In order for a 35 U.S.C. § 256 action to properly be brought in court, the party asserting the change of inventorship claim must have standing to bring that claim. In other words, the party asserting a change of inventorship must have an interest in the patent in order to request the change. While this may seem simple from a higher level, it can quickly get complicated since patent ownership rights are frequently assigned to employers and other individuals.
More specifically, parties asserting a change of inventorship claims must meet constitutional standing requirements. To satisfy these requirements, “a party must show that he has suffered an injury-in-fact, that the injury is traceable to the conduct complaint of, and that the injury is redressable by a favorable decision. See Faryniarz v. Ramirez, No. 3:13-cv-01064(CSH) (D. Conn. Nov. 9, 2015).
In the context of a change of inventorship action, the injury-in-fact requirement is the requirement that the party suing have some interest in having the inventors correctly listed on the patent. Generally, in determining whether a party has met this constitutional standing requirement, courts look to whether or not the suing party has, or would have some ownership interest in having the patent corrected. See id.
In a straightforward scenario where an individual is suing to have the patent corrected and has no obligation to assign the corrected patent, constitutional standing is relatively straightforward and easily met. In this type of scenario, if the patent is corrected to include the omitted inventor, ownership of the patent will also invest in that inventor and, accordingly, the inventor will be able to reap the financial benefits of being able to exercise the rights of the patent. Accordingly, constitutional standing will almost always be met in this scenario.
However, where an employer is suing to have a patent corrected or where an individual is suing to have a patent corrected but has an obligation to assign the patent to another person or entity, the constitutional standing analysis can be much more complicated.
In particular, “[w]here a party lacks an ownership interest in the patent, and will not receive any other direct financial rewards from being declared the inventor of the patent, that party does not have standing to sue . . . .” See id.
Accordingly, where an employer or business entity is suing for change of inventorship, that entity must have some ownership interest in the patent or some direct financial reward from having inventorship on the patent correct. Typically, a business entity can meet standing requirements where the omitted inventor had an obligation to assign the patent to the entity. Because the business would ultimately end up with an ownership interest in the patent if it were corrected, the entity will be found to have met standing requirements.
Additionally, where an entity may not have an ownership interest through an obligation to assign, it can also meet the standing requirement where it would receive a direct financial benefit from the patent. If the entity would receive royalty or licensing payments, that will likely be sufficient for it to meet the standing requirement.
In contrast, where an individual is suing for correction of inventorship and he or she has an obligation to assign the patent, that individual may not be able to meet standing requirements without some other connection – for example, receiving a financial reward such as royalty payments. Compare Larson v. Correct Craft, Inc., 569 F.3d 1319, 1325 (Fed. Cir. 2009) (holding an individual did not have constitutional standing to sue for correction of inventorship where his interest in the patent had been assigned to his employer and he had no other financial interest in the patent), with Chou v. University of Chicago, 254 F.3d 1347, 1357-60 (Fed. Cir. 2001) (holding an individual did have constitutional standing even though she had assigned ownership rights to her employer because she was still entitled to royalties derived from the patent).
Importantly, one developing area with respect to constitutional standing is whether reputational harm by itself can satisfy the standing requirement. That is, whether the reputational harm associated with being left off of a patent as a listed inventor is sufficient to confer standing for a change of inventorship action. Courts are currently split on this issue with some courts finding that reputational injury can be sufficient to confer constitutional standing and other courts finding the opposite. See Faryniarz v. Ramirez, No. 3:13-cv-01064(CSH) (D. Conn. Nov. 9, 2015) (comparing court decisions relating to reputational injury and whether it satifies standing requirements for change of inventorship claims)
Overall, in order for an individual or entity to have standing to bring a change of inventorship action, the individual or entity must have an ownership interest or direct financial interest in the patent. However, where an individual has no ownership or financial interest in the patent, depending on the court, he may be able to assert reputational harm in order to meet the standing requirement.
Defenses to Change of Inventorship Actions
There are two main defenses to change of inventorship actions: (1) laches; and (2) equitable estoppel. These will be talked about sequentially below.
Laches is similar to a statute of limitations defense in that the thrust of a laches defense comes from the passage of time. Specifically, laches is the idea is that the plaintiff has not diligently pursued his claim and that enough time has passed that the plaintiff should not now be allowed to pursue it. While laches is similar to a statute of limitations defense, it is different in that it is an equitable defense, not a statutory defense, and therefore much more flexible since it is up to the courts to determine when the defense should be applied.
Generally speaking, a laches defense applies where (1) the claim was brought after unreasonable and unexcused delay; and (2) the defendant is likely to suffer evidentiary or economic prejudice as a a result. See Advanced Cardiovascular Sys. Inc. v. SciMed Life Sys. Inc., 988 F.2d 1157, 1161 (Fed. Cir. 1993).
Notably, while there is no specific amount of time that must pass before a claim is barred by laches, courts have determined that for change of inventorship claims a rebuttable presumption of laches will arise once 6 years has passed from the issuance of a patent. Pei-Herng Hor v. Ching-Wu Chu, 699 F.3d 1331, 1334 (Fed. Cir. 2012).
However, even where a presumption of laches arises, courts have found delay by the plaintiff in pursuing that action excusable in various cases, including where poverty, illness, reissue of the patent, was, and other pending litigation affected the plaintiff’s ability to diligently pursue a lawsuit. See Hall v. Aqua Queen Mfg.Inc., 93 F.3d 1548, 1554 (Fed. Cir. 1996); Vaupel Textilmaschinen KG v. Meccanica Euro Italia SPA, 944 F.2d 870 (Fed. Cir. 1991).
Importantly, where a defendant to a change of inventorship claim has asserted a laches defense, the plaintiff may assert “unclean hands” in response to the laches defense. In other words, where the defendant engaged in particularly egregious conduct to prevent the plaintiff from learning about his or her omission as an inventor, the defendant’s hands are “unclean” and, thus, the defendant will not be allowed to assert laches as a defense. See Yeda Research And Development Co. Ltd. v. Imclone Systems Inc., 443 F. Supp. 2d 570, 630 (S.D.N.Y. 2006).
In contrast to laches, equitable estoppel is more focused on a plaintiff’s overt actions that have lead a defendant to believe that the plaintiff does not intend to pursue being listed as an inventor on the patent. Specifically, equitable estoppel generally requires (1) the plaintiff, through misleading conduct, led the defendant to reasonably infer that he does not intend to enforce his claims; (2) the defendant relied upon that conduct; (3) due to its reliance, the defendant will be materially prejudiced if the plaintiff is allowed to proceed with his claim. See Ferring B.V. v. Allergan, Inc., No. 12 Civ. 2650 (S.D.N.Y. Aug. 31, 2015) (holding equitable estoppel barred a plaintiff’s change of inventorship claim where the plaintiff had disclaimed inventorship interest and had been made aware of the patent application filing).
In essence, equitable estoppel in a change of inventorship action applies where the plaintiff was aware of the patent and that she could be listed as an inventor on the patent; told the defendant or otherwise led the defendant to believe she did not wish to pursue being listed as an inventor; and then later, after the patent was issued, filed a change of inventorship action so that she would, indeed, be listed as an inventor. In this scenario an equitable estoppel defense would prevent the plaintiff from pursuing her claim.
© 2016 J.D. Porter, LLC; Jordan Porter. Denver, Colorado.