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MARKETEL INTERN., INC. v. PRICELINE.COM

January 23, 2001

MARKETEL INTERNATIONAL, INC., A CALIFORNIA CORPORATION, PLAINTIFF,
v.
PRICELINE.COM, A DELAWARE CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Legge, U.S. District Judge.

AMENDMENT TO DECISION GRANTING PARTIAL SUMMARY JUDGMENT

On December 5, 2000 the court granted partial summary judgment in favor of defendants. The court's decisions were not set out in a written order, but were stated in open court on the record of the reporter's transcript.

As a part of those decisions, the court ruled in favor of defendants on the inventorship claim (Count 5) on the ground that 35 U.S.C. § 256 does not authorize correction of inventorship when the named inventor acted with "deceptive intent" in securing inventor status. The court cited General Electric Co. v. Brandon, 25 U.S.P.Q.2d 1885, 1887 (N.D.N.Y. 1992), University of Colorado Foundation v. American Cyanamid, 880 F. Supp. 1387, 1397-98 (D.Colo. 1995) and McMurray v. Harwood, 870 F. Supp. 917, 919-20 (E.D.Wis. 1994) for the proposition that there must be a lack of deceptive intention on the part of the person originally named as the inventor in order for a section 256 correction to be ordered. See also ROBERT P. MERGES, PATENT LAW AND POLICY 821-24 (2d ed. 1997); Bemis v. Chevron Research Co., 599 F.2d 910, 912 (9th Cir.), cert. denied, 444 U.S. 966, 100 S.Ct. 454, 62 L.Ed.2d 378 (1979) (analyzing section 256, prior to its amendment in 1992, and concluding that it allows correction of inventorship only for innocent errors). Since plaintiff's entire case rests on allegations that the substance of defendants' '207 patent was "misappropriated" from plaintiff, which is anything but an innocent error, the court concluded that correction under section 256 was not authorized.

After the December 5, 2000 hearing but before judgment has been entered, defendants draw the court's attention to cases from the Federal Circuit that bring the continued validity of the above-cited authorities into question. See University of Colorado Foundation, Inc. v. American Cyanamid Co., 196 F.3d 1366, 1374 (Fed. Cir. 1999); Stark v. Advanced Magnetics, Inc., 119 F.3d 1551, 1555 (Fed.Cir. 1997). Defendants request that the court supplement its December 5 ruling to address additional grounds for summary judgment on the inventorship claim.*fn1 The court did not originally address defendants' additional grounds because it regarded section 256 as an improper vehicle for inventorship correction.

The parties have fully briefed the inventorship claim. Plaintiff has been accorded the opportunity to file a sur-reply on the issues.

Good cause appearing, the court therefore amends its December 5 decision on inventorship as follows.

I.

35 U.S.C. § 256 authorizes federal courts and the PTO to resolve inventorship contests involving issued patents. See MCV, Inc. v. King-Seeley Thermos Co., 870 F.2d 1568, 1570 (Fed.Cir. 1989). Section 256 allows not only the addition of an inventor, but the complete substitution of one inventor for another, provided that the true inventor acted without deceptive intent. See Stark v. Advanced Magnetics, Inc., 119 F.3d 1551, 1556 (Fed.Cir. 1997). Because prior law required invalidation of a patent when nonjoinder or misjoinder were demonstrated, the Federal Circuit has described Section 256 as a "savings provision." Pannu v. Iolab Corp., 155 F.3d 1344, 1350 (Fed.Cir. 1998). "If a patentee demonstrates that inventorship can be corrected as provided for in section 256, a district court must order correction of the patent, thus saving it from being rendered invalid." Id.

The inventor named in an issued patent is presumed to be the true inventor. See Hess v. Advanced Cardiovascular Systems, Inc., 106 F.3d 976, 980 (Fed.Cir.), cert. denied, 520 U.S. 1277, 117 S.Ct. 2459, 138 L.Ed.2d 216 (1997). This presumption is a powerful one, because once a patent has issued there is a "strong temptation for people who consulted with the inventor and provided him with materials and advice, to reconstruct, so as to further their own position, the extent of their contribution to the conception of the invention." Id. Accordingly, "[t]he burden of showing misjoinder or nonjoinder of inventors is a heavy one and must be proved by clear and convincing evidence." Id. (quoting Garrett Corp. v. United States, 190 Ct.Cl. 858, 422 F.2d 874, 880 (1970)).

It is axiomatic that "[c]onception is the touchstone of inventorship." Burroughs Wellcome Co. v. Barr Lab., Inc., 40 F.3d 1223, 1227-28 (Fed.Cir. 1994). "Conception is the formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention, as it is hereafter to be applied in practice." Ethicon, Inc. v. United States Surgical Corp., 135 F.3d 1456, 1460 (Fed.Cir. 1998) (citations and internal quotation marks omitted). "An idea is definite and permanent when the inventor has a specific, settled idea, a particular solution to the problem at hand, not just a general goal or research plan he hopes to pursue." Burroughs Wellcome, 40 F.3d at 1228. "Thus facts relevant to inventorship are those showing the conception of the invention, for others may provide services in perfecting the invention conceived by another without becoming an `inventor' by operation of law." C.R. Bard, Inc. v. M3 Systems, Inc., 157 F.3d 1340, 1352 (Fed.Cir. 1998). The Federal Circuit has further explained that "the critical question for joint conception is who conceived . . . the subject matter of the claims at issue." Ethicon, 135 F.3d at 1460.

Correction of inventorship under section 256 is resolved by bench trial and is not submitted to a jury. See Ethicon, Inc. v. United States Surgical Corp., 921 F. Supp. 901, 904-05 (D.Conn. 1995), aff'd by 135 F.3d 1456 (Fed.Cir. 1998).

To establish priority of invention, a party must show: (1) possession of every feature recited in the disputed claim; and (2) every limitation of the claim was known to the inventor at the time of alleged invention. Kridl v. McCormick, 105 F.3d 1446, 1449-50 (Fed.Cir. 1997). To establish that the named inventor derived the invention from another, a party must show; (1) prior conception of the claimed subject matter, and (2) communication of the conception to the named inventor. Price v. Symsek, 988 F.2d 1187, 1190 (Fed.Cir. 1993). "While the ultimate question of whether a patentee derived an invention from another is one of fact, the determination of whether there was a prior conception is a question of law, which is based upon subsidiary factual findings." Id. (citations omitted).

"[A]n inventor's testimony respecting the facts surrounding a claim of derivation or priority of invention cannot, standing alone, rise to the level of clear and convincing proof." Id. at 1194. An alleged inventor must supply independent evidence to corroborate the essential aspects of his testimony. See Woodland Trust v. Flowertree Nursery, Inc., 148 F.3d 1368, 1371 (Fed.Cir. 1998). Whether the proffered evidence sufficiently corroborates the alleged inventor's testimony is evaluated under a "rule of reason" standard. Price, 988 F.2d at 1195 ("An evaluation of all pertinent evidence must be made so that a sound determination of the credibility of the [alleged] inventor's story may be reached."). Of course, "there need not be corroboration for every factual issue contested by the parties." Ethicon, 135 F.3d at 1464. Still "the [alleged] inventor's testimony requires corroboration before it can be considered," Price, 988 F.2d at 1195, and he "must provide clear and convincing evidence of supporting facts, including corroborating evidence." C.R. Bard, 157 F.3d at 1353. ...


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