The opinion of the court was delivered by: INFANTE
Counterclaim defendants Vivus, Inc., Dr. Virgil A. Place, and Leland F. Wilson move for a summary judgment on Counterclaimant Josef E. Kercso's First and Second Causes of Action. Counterclaim defendants request that summary judgment be entered on Kercso's claim that he is the sole inventor, or at least a co-inventor, of the subject matter disclosed in the '391 and '535 patents, and on the claim that the patents should be declared invalid and/or unenforceable due to Kercso's wrongful omission as a named inventor. For the reasons set forth below, the motion for summary judgment is DENIED.
II. BACKGROUND FACTS AND THE PARTIES' CONTENTIONS
The central dispute in this inventorship case involves the nature of the relationship between Dr. Place and Mr. Kercso in 1990 and 1991. Dr. Place, one of the named inventors on both U.S. Patent No. 5,242,391 (Urethral Insert for Treatment of Erectile Dysfunction) and U.S. Patent No. 5,474,535 (Dosage and Inserter for Treatment of Erectile Dysfunction)
, claims that he merely consulted Mr. Kercso for assistance in building prototypes and models of his designs of devices for delivering medication into the urethra to treat erectile dysfunction. Dr. Place contends that Mr. Kercso made no inventive contribution. Mr. Kercso, on the other hand, claims that Dr. Place invited him to be one of the founding members of Vivus and that he, not Dr. Place, came up with the breakthrough designs disclosed in the patents-in-suit.
Summary of the '391 and '535 patents
The '391 and '535 patents both relate to the delivery of medication into the urethra of impotent men to allow them to achieve an erection. There are a total of three methods (with their corresponding apparatus) disclosed in the patents. The first method is referred to by the parties as the "dipstick" method. This method, which is described in claim 1 of the '391 patent, calls for coating a thin shaft of material (such as plastic) with the medication and inserting the shaft into the urethra. The problem with the "dipstick" method is that it is difficult to control the dosage. The ability to precisely control the dosage is very important because if too little medication is applied, the patient will not be able to achieve an erection, and if too much is applied, the erection will last several hours.
The need to control the dosage of medication led to the development of the second delivery method, called the "plunger" or "plunger-injector" method. This second method, which is described in claim 6 of the '391 patent and claim 18 of the '535 patent, requires the medication to be formed into a pellet and placed at the end of a hollow shaft. As the hollow shaft is inserted into the urethra, the patient compresses a plunger which ejects the medication. Claim 7 of the '391 patent discloses a locking mechanism which prevents the accidental ejection of the pellet of medication before the shaft is inserted into the urethra.
The third method is called the "tulip" method. The "tulip" method was developed in response to the discovery of a prior art patent, the "Voss patent", on or about June 17, 1991, and is described in claim 19 of the '535 patent. The "tulip" design is comprised of a hollow shaft with a plunger and a flexible closed end where the pellet is placed. The flexible end can be inverted to contain a pellet of medication, and the plunger or injector ejects the pellet by everting the flexible end.
The development of the "dipstick" and "plunger" devices
Dr. Place began work on the development of therapeutic agents and delivery systems to treat erectile dysfunction or impotence in 1987, when he was employed by Alza Corporation in Palo Alto.
In April 1989, Dr. Place filed an Invention Disclosure Record ("IDR") with Steve Stone, Alza's in-house patent attorney, describing his technique of treating impotence through the transurethral administration of medication. Mr. Gale and Mr. Berggren, researchers at Alza, assisted with the formulation of the medication to be delivered. On April 25, 1990, the original patent application was filed naming Dr. Place, Mr. Gale and Mr. Berggren as inventors. Only the "dipstick" method was disclosed in the April 25, 1990 application. There is no dispute regarding Dr. Place's invention of the original "dipstick" method.
Dr. Place contends that he invented the "plunger" method in the months after the original patent application was filed. Vivus Exh. 10, P 3. Dr. Place's claim, though supported by some documentary evidence, is unquestionably not established.
The first supporting document is Dr. Place's August 19, 1990 handwritten facsimile to Alza's patent attorney, Steve Stone, regarding the anticipated filing of a continuation-in-part to the April 25, 1990 application. Vivus Exhs. 10, P 4 and 10A. In the August 19, 1990 facsimile, Dr. Place states, "Another [design] is to take the present obturator and make hollow center and put plunger to eject dose -- the dose can be filled in tip or inserted into tip." Vivus Exh. 10A. The second document is Dr. Place's handwritten memorandum to Steve Stone dated October 3, 1990 which contains two crude drawings of the "plunger" device. Vivus Exh. 10B. Also, Dr. Place cites to the September 30, 1990 entry in his notebook in which he states that he spoke with Nathan Roth, an Alza employee, "about cap and cylinder of drug overcoat of rod of drug in inserter with plunger." Vivus Exh. 10D.
During the fall of 1990, Alza apparently decided not to pursue Dr. Place's erectile dysfunction therapy project. Dr. Place and Alza reached an agreement in which Alza would continue to assist Dr. Place in obtaining patent rights on his work. Alza allowed Dr. Place to use its office space and its laboratory facilities to conduct further experiments related to the project. However, Dr. Place was apparently not allowed to use Alza employees to assist in his experiments. Any patents issued to Dr. Place or his colleagues would still belong to Alza. However, Alza agreed to grant Dr. Place the option to obtain licenses under the patents. In February 1991, Dr. Place started Vivus, Inc.
Since Dr. Place could no longer use Alza employees to help in his project, he decided to consult Mr. Kercso. Dr. Place became acquainted with Mr. Kercso while both men worked for Syntex in the 1960's. Although Dr. Place left Syntex to go to Alza in the late 1960's, the two men apparently kept in touch over the years. Dr. Place knew that Mr. Kercso had set up a machine shop in his home and that he could construct models and make scale drawings.
Dr. Place went to Mr. Kercso's Palo Alto home on November 23, 1990 to discuss the erectile dysfunction therapy project. The parties do not dispute that Mr. Kercso had no involvement in the project prior to November 23, 1990. The parties disagree about the relationship established between the two men on that date. Dr. Place maintains that he merely hired Mr. Kercso as a design consultant to fabricate models and make scale drawings. Mr. Kercso contends that Dr. Place asked him to join him as a "founding member" of Vivus, Inc. The parties did not execute any written agreement on November 23, 1990.
According to Mr. Kercso, he and Dr. Place spent many hours and days together during the period after November 23, 1990 discussing improvements to the design of the "dipstick" device. Mr. Kercso states that Dr. Place never told him about the so-called "plunger" device he had apparently designed by August 19, 1990. Dr. Place does not dispute this claim. Mr. Kercso made several scale drawings of improvements to the "dipstick" which are attached as Exhibit 46 to his declaration. The drawings show five separate versions of the "dipstick" labeled TUTS-1 (Transurethral Treatment System) through TUTS-5. After reviewing the TUTS-5 design drawing, which is dated December 21, 1990, Dr. Place agreed that injection molds should be made for production-quality models. They obtained the molds and models from L&H Precision Tool & Molding Company in Hayward. A quote for same was obtained on January 3, 1991. Kercso Exh. L. The TUTS-5 models were produced by L&H by February 1991. Mr. Kercso states that he and Dr. Place tested the TUTS-5 models in February 1991 in Alza's laboratory and found serious problems obtaining a uniform coating of medication on the shaft.
Mr. Kercso states that he was quite disappointed with the test results on the TUTS-5 models and therefore decided to improve upon the "dipstick" design. Mr. Kercso relates that he was inspired by an earlier invention he made, disclosed in U.S. Patent No. 4,105,030 ("the '030 patent"), issued on August 8, 1978, entitled "Implant Apparatus." Kercso Exh. 34. The '030 patent generally describes an apparatus for subcutaneously implanting drug pellets in animals. The patent discloses a device which looks very much like a gun onto which a hollow needle containing drug pellets can be affixed. To deposit the drug pellets into the animal, the user inserts the needle into the animal and pulls the trigger device which retracts the needle. The pellets are then left in the channel made by the inserted needle. Dr. Place does not address the purported similarity between the "plunger" design and the device described in the '030 patent.
Mr. Kercso claims that he developed the "plunger" design sometime between February 10 and 20 of 1991 and made a prototype which he showed Dr. Place. He claims that he made two rough drawings for Dr. Place when he showed him the prototype at Alza's laboratory sometime between February 10 and 20 of 1991. Kercso Exhs. 49 and 50.
The drawings, however, are not dated. Mr. Kercso states that he designed the locking mechanism disclosed in claim 7 of the '391 patent at about the same time that he developed the "plunger" design.
As indicated earlier, Dr. Place states that he was working with Steve Stone on the continuation-in-part application starting in August 1990. He presented two handwritten memoranda, one dated August 19, 1990 and the other October 3, 1990, that he sent to Steve Stone to assist in the preparation of the continuation-in-part application. The next communication between Dr. Place and Mr. Stone regarding the continuation-in-part application occurred on March 4, 1991 when Dr. Place sent another handwritten memorandum to Mr. Stone. In the March 4, 1991 memorandum, Dr. Place tells Mr. Stone that:
Present inserter is model given to you last week. . . The suppository (LODE) inserted into the hollow end of the inserter with and obturator to eject has been made and looks promising. The platform I gave you has had a 1.5 mm. hole drilled to make a hollow pipe. The Lode is 1.5 mm. And made from a solid PEG and is preloaded into tip. When inserter is positioned fully into the urethra (in present manifestation that is 3 cm.) the Lode is discharged by pressing the obturator. See figure attached.
Kercso Exh. N (emphasis added). The referenced figure attached to the March 4, 1991 memorandum is a rough drawing of the "plunger" device dated February 27, 1991 disclosing a locking mechanism. Mr. Kercso correctly points out that this is the first time ...