Thursday, April 02, 2009

CAFC interprets assignment contracts: ambiguity issue

At issue in Euclid Chemical was ambiguity in the words in a patent assignment document:

the Assignment provides:

I, JACK BENNETT, whose full post office address is 10039
Hawthorne Drive, Chardon, Ohio 44024, in consideration for $25,000.00
and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged do hereby sell and assign to VECTOR
CORROSION TECHNOLOGIES LTD. whose full post office address is
474 Dovercourt Drive, Winnipeg, Manitoba Canada R3Y 1G4, all my
interest in the United States, Canada and in all other countries in and to
my US, Canadian, and European applications for patents and issued US
patent, namely:

1. Issued US Patent 6,033,553. This patent claims the specific
use of LiNO3 and LiBr to enhance the performance of metallized
zinc anodes;
2. US Application No. 08/839,292 filed on April 17, 1997,
3. US Application No. 08/731,248, filed on October 11, 1996 (now
4. EPO Application No. 99122342.1, filed November 9, 1999, and
5. Canadian Application No. 2288630, filed November 8, 1999,
any and all divisional applications, continuations, and continuations in part
together with the entire right, title and interest in and to said applications,
any and to all divisional applications, continuations, and continuations in
part thereof, the right to claim priority therefrom under the International
Convention, and any and all Letters Patent which may issue or be
reissued for said invention to the full end of the term for which each said
Letters Patent may by granted; and hereby authorize the issuance to said
assignee of any and all said Letters Patent not already issued as the
assignee of entire right, title and interest in and to the same, for the sole
use and benefit of said assignee, its successors, assigns or legal
representatives; and hereby covenant and agree to do all such lawful acts
and things and to execute without further consideration such further lawful
assignments, documents, assurances, applications, and other instruments
as may reasonably be required by said assignee, its successors, assigns
or legal representatives, to obtain any and all Letters Patent for said
invention and vest the same in said assignee, its successors, assignees or
legal representatives.
SIGNED AT: Chardon, Ohio, U.S.A.
This 20th day of December, 2001

The issue: The ’742 patent is a “[c]ontinuation-in-part of application No. 09/236,731, filed on
Jan. 25, 1999, now Pat. No. 6,033,553 . . . .” ’742 patent at [63]. However, the ’742
patent issued on April 17, 2001
—before the date of the December 20, 2001

The legal problem: Euclid argues on
appeal that the contract is, at best, ambiguous as to whether
already issued patents are
encompassed in the assignment.

State law is applied:
“Construction of patent assignment agreements is a matter of state contract law.”
Mars, Inc. v. Coin Acceptors, Inc., 527 F.3d 1359, 1370 (Fed. Cir. 2008).

The CAFC found ambiguity:

We disagree with the district court that the Assignment unambiguously
transferred ownership of the ’742 patent to Vector.


Notably, this language refers to “applications”—plural—but “issued US patent”—singular. Had the assignee intended,
through the assignment of “continuations in part” to assign other issued U.S. patents, it
would be expected that the Assignment would have said that the inventor was assigning
his “issued US patents”—plural—and even recited the patent number of the issued ’742
At bottom, we cannot give the Assignment a “definite legal meaning.” Westfield,
797 N.E.2d at 1261.

The separate opinion of Judge Newman, which includes

This principle is attributed to Sir Humphrey Davy, who in 1824 attached
chunks of iron to the hulls of copper-clad ships of the British Navy, and dramatically
reduced corrosion of the copper.

is a far-more interesting read and shows that Judge Newman is more in-touch both with
science issues and with pragmatic issues of patent law.


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