Monday, August 13, 2018

CAFC addresses inventorship issues in Pappalardo case

There was an interesting fact pattern in the PAPPALARDO case:

As alleged in the Amended Complaint, Mr. Pappalardo
met Ms. Stevins at a pharmaceutical products trade
show and disclosed to her a concept for a new product.
See J.A. 55; see also Appellant’s Br. 13 (specifying product
was related to liquid and solid cannabis delivery systems).
The Amended Complaint alleges Ms. Stevins falsely
stated that she had access to funding from a network of
investors for the product, and entered into a business
relationship with Mr. Pappalardo to commercialize the
product. See J.A. 55−56. Ms. Stevins recommended filing
the ’597 application, which named Ms. Stevins as a joint
inventor. See J.A. 56. The ’597 application remains
pending. See J.A. 56.

According to Mr. Pappalardo, Ms. Stevins “attempted
to independently . . . exploit” his technology. J.A. 59. Mr.
Pappalardo then sued Ms. Stevins, asserting claims of
fraud and negligent representation (Counts I and II), and
seeking declaratory judgment of sole inventorship (Count
III).1 See J.A. 56−61. The District Court dismissed the
declaratory judgment claim on the grounds that it lacked
jurisdiction to hear claims for correction of inventorship
for a pending patent application, Pappalardo, 2017 WL
4553919, at *2 (citing 35 U.S.C. § 256 (2012) (“Whenever
through error a person is named in an issued patent as
the inventor . . . [, a] court . . . may order correction of the
patent . . . .” (emphasis added))), and the state law claims
for fraud and negligent representation on the grounds
that, inter alia, they were also “contingent on” the U.S.
Patent and Trademark Office’s (“USPTO”) determination
on the ’597 application, id. at *3. The District Court also
held that, “[e]ven setting aside this jurisdictional defect,”
it was “hard-pressed” to find that the state law claims
were pleaded with sufficiency pursuant to Federal Rule of
Civil Procedure 12(b)(6). Id.

The CAFC noted:

However, because the “true nature” of
Mr. Pappalardo’s inventorship claim is for relief pursuant
to federal law, specifically 35 U.S.C. § 256, “we will accept
that [Mr. Pappalardo] pleaded an action for correction of
inventorship.” Larson v. Correct Craft, Inc., 569 F.3d
1319, 1325 (Fed. Cir. 2009); see HIF Bio, 600 F.3d at
1352−53 (characterizing claims pleaded as state law
declaratory judgments more properly as correction of
inventorship claims pursuant to § 256). Accordingly, the
District Court had subject matter jurisdiction over this
claim “[b]ecause inventorship is a unique question of
patent law.” HIF Bio, 600 F.3d at 1353; see Bd. of Regents,
Univ. of Tex. Sys. v. Nippon Tel. & Tel., 414 F.3d
1358, 1363 (Fed. Cir. 2005) (“[I]ssues of inventorship
. . . present sufficiently substantial questions of
federal patent law to support jurisdiction under [28
U.S.C. §] 1338(a).”).

However, we agree with the District Court’s dismissal
of the declaratory judgment claim because the claim “fails
to allege a cause of action upon which relief can be granted.”
Litecubes, LLC v. N. Light Prods., Inc., 523 F.3d
1353, 1361 (Fed. Cir. 2008); see Bell v. Hood, 327 U.S.
678, 682 (1946) (“Failure to state a proper cause of action
calls for a judgment on the merits and not for a dismissal
for want of jurisdiction.”). “A § 256 claim for correction of
inventorship does not accrue until the patent issues.” Hor
v. Chu, 699 F.3d 1331, 1335 (Fed. Cir. 2012). Moreover,
there are no other private causes of action available to a
litigant to challenge inventorship of a pending patent
application. See HIF Bio, 600 F.3d at 1353−54; see also
id. at 1353 (stating “Congress . . . has limited the avenues
by which such inventorship [of a pending patent application]
can be contested” to “the Director of the [USPTO]”).
Should a patent issue from the ’597 application, nothing
prevents Mr. Pappalardo from seeking declaratory judgment
relief on a correction of inventorship claim at that
time. See Hor, 699 F.3d at 1335−36. At this time, h


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