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Keywords

contractinjunctionappealpatent

contractplaintiffinjunctionappealtrialpatenttrademarkappellee

Related Cases

Filmtec Corp. v. Allied-Signal Inc., 939 F.2d 1568, 19 U.S.P.Q.2d 1508

Facts

In this patent infringement case, FilmTec Corp. sued Allied-Signal, Inc. for infringing on a patent related to a reverse osmosis membrane. The patent was originally filed by John E. Cadotte, who assigned his rights to FilmTec. However, Cadotte had previously worked for a government contractor, MRI, under a contract that granted the government rights to inventions made during his employment. This raised questions about the validity of FilmTec's title to the patent and its standing to sue for infringement.

The application which ultimately issued as the '344 patent was filed by John E. Cadotte on February 22, 1979. The patent claims a reverse osmosis membrane and a method for using the membrane to reduce the concentration of solute molecules and ions in solution. Cadotte assigned his rights in the application and any subsequently issuing patent to plaintiff-appellee FilmTec Corp. (FilmTec). This assignment was duly recorded in the United States Patent and Trademark Office.

Issue

Whether FilmTec Corp. had established a reasonable likelihood of success on the merits regarding its title to the patent and standing to bring the infringement action.

Rule

Property rights in an invention are considered personal property. An application for a patent and the patent itself can be assigned, and legal title to the patent passes to the assignee upon grant. If an assignment is made before the invention exists, it may be an assignment of an expectant interest, giving the assignee at most an equitable title. If an employee assigns rights to inventions made during employment, and the invention was created during that employment, the employee may have nothing to assign, rendering any subsequent assignment a nullity.

Analysis

The court analyzed whether FilmTec could demonstrate a reasonable likelihood of success on the merits. It noted that Cadotte's previous employment at MRI and the contract with the government raised serious doubts about the title to the patent. If the government held only an equitable title due to the contract, Cadotte's assignment to FilmTec could be valid. However, if Cadotte had no rights to assign, FilmTec would lack standing to sue. The court found that the evidence did not sufficiently clarify the title issue, leading to uncertainty about FilmTec's likelihood of success.

Because of its view of the issues, the trial court concluded it did not need to decide whether that combination resulted in the claimed invention. This was because in granting the preliminary injunction, the trial court concluded that as a matter of law even if the invention was made while Cadotte was employed at MRI, under the contract the Government could have no more than equitable title to the patent, which title cannot be raised as a defense by Allied.

Conclusion

The court vacated the preliminary injunction issued in favor of FilmTec and remanded the case for further proceedings, emphasizing the need to resolve the title issue before determining the appropriateness of the injunction.

The grant of the preliminary injunction is vacated and the case remanded to the district court to reconsider the propriety of the preliminary injunction in light of the four Chrysler factors and for further proceedings consistent with this opinion.

Who won?

Allied-Signal, Inc. prevailed in this appeal as the court vacated the preliminary injunction that had been issued against them. The court found that FilmTec had not established a reasonable likelihood of success on the merits regarding its title to the patent, which was critical for standing in the infringement action. The court's decision highlighted the importance of clarifying ownership rights before proceeding with the case.

Allied-Signal, Inc. prevailed in this appeal as the court vacated the preliminary injunction that had been issued against them.

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