Wednesday, November 14, 2012

CAFC rules on 1980's 1-2-3 superconductor cases of Paul Chu in 2012

The patent applications had been filed in the 1980's, but the patents in question did not issue until 2006 and 2010. The issue of inventorship is addressed in a CAFC opinion on November 14, 2012 in the case of Hor and Meng vs. "Paul" Chu.

Physics "hero" Paul Chu loses to subordinates Hor and Meng.

The district court of SD Texas was reversed on laches, which would have barred the claim of Hor and Meng:

A § 256 claim for correction of inventorship does not accrue until the patent issues. The reason is simple: that is what the language of the provision requires. § 256 (“Whenever through an error a person is named in an issued patent as the inventor, or through error an inven- tor is not named in an issued patent . . . .”) (emphases added); see also HIF Bio, Inc. v. Yung Shin Pharms. Indus. Co., 600 F.3d 1347, 1354 (Fed. Cir. 2010) (“Once a patent issues, . . . 35 U.S.C. § 256 provides a private right of action to challenge inventorship . . . .”). Under well- established laches principles, “[a] cause of action cannot be barred by laches before it accrues; it is never extinct when it comes into existence.” Davidson v. Grady, 105 F.2d 405, 412 (5th Cir. 1939); see also Lamb v. Powder River Live Stock Co., 132 F. 434, 443 (8th Cir. 1904) (“Nothing could be more unreasonable or more certainly violative of constitutional prohibitions than to bar rights of action because of the lapse of time prior to their ac- crual, when they could not have been exercised.”).

The district court was reversed on "equitable estoppel":

In addition to determining that Hor’s and Meng’s claims were barred by laches, the district court, in the alternative, sua sponte found that Hor’s and Meng’s inventorship claims were barred by equitable estoppel. We conclude that this was error. Chu did not assert equitable estoppel as an affirmative defense in his an- swer, nor did he present this theory to the district court in his motion for summary judgment. Estoppel, however, is an affirmative defense that must be pled, Fed. R. Civ. P. 8(c)(1) (“In responding to a pleading, a party must af- firmatively state any avoidance or affirmative defense, including . . . estoppel . . . .”) (emphasis added), and the failure to plead it can result in waiver, Davis v. Huski- power Outdoor Equip. Corp., 936 F.2d 193, 198 (5th Cir. 1991) (“[A]n affirmative defense is waived unless pleaded by the defendant.”). In the Fifth Circuit, whose law we apply to this procedural issue, “an affirmative defense . . . generally should not [be] raised sua sponte.” Kiser v. Johnson, 163 F.3d 326, 328 (5th Cir. 1999) (quoting Warnock v. Pecos Cnty., Tex., 116 F.3d 776, 778 (5th Cir. 1997)) (alterations in original); see also United States v. Mitchell, 518 F.3d 740, 745 (10th Cir. 2008) (“[C]ourts generally may not raise affirmative defenses sua sponte . . . .”).

Judge REYNA issued a concurring opinion.

These are procedural matters. The substance of the case remains to be heard.

Cross reference: U.S. Patent Nos. 7,056,866 (“’866 patent”) and 7,709,418 (“’418 patent”).

UPDATE. See also Can you Wait 20-Years to Challenge Inventorship?: In this case, Yes including the text:

Sometimes I'm surprised that there are not more inventorship disputes. But, the rise in power of HR managers in most corporate settings has helped to lock-down rights through initial employment or consulting contracts. On the other hand, the loose liberalism of the university setting continues to create problems on this front. One element that adds complexity for universities is that, in most cases, universities provide a percentage of any patent-related revenue to the inventors – in this case 50%. For the most part, major US corporations do not use that approach.


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