Monday, March 19, 2012

The fiduciary shield doctrine and patent law

Back in 2005, IPBiz posted about the Solaia patent case, which involved a non-practicing entity [NPE, here Solaia] suing others for patent infringement.

Underneath the patent case was an interesting state court case, between the inventor (Michael Femal) and an attorney (James O’Shaughnessy) for one of the defendants (Honeywell).

The company which employed Femal at the time of the patent was Schneider. Solaia later acquired the patent rights. Schneider contracted with Solaia to let Femal help Solaia enforce the patent, for which he was to get 2% of Solaia’s earnings. Schneider later investigated the deal more thoroughly (because of statements by O’Shaughnessy) and fired Femal for misuse of company assets.

Femal, in turn, sued O’Shaughnessy in Illinois, because the comments by O’Shaughnessy in Illinois had initiated the investigation of Femal's deal.

O’Shaughnessy, however, lived in Wisconsin, and moved to dismiss on the basis of lack of personal jurisdiction. If O’Shaughnessy was ordered by his employer into Illinois, he would be protected for work done for the employer under the fiduciary shield doctrine. There was an issue of whether or not O’Shaughnessy had a personal interest in the matter.


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