Tag Archives: Patents

Business, Intellectual Property, Patents

Patent Joint Ownership Issue

Joint ownership can arise from joint inventorship, such as where two or more individuals directly or indirectly collaborate as inventors. This often times happens unwittingly, as the two inventors may not have worked on the development of the invention together or at the same time. Sometimes, the primary inventor does not realize that the other inventor’s contribution raises that individual to the level of inventor. This is because the inventors do not have to make the same type or amount of contribution and the inventors do not have to contribute to every claim in the patent application.

Ethicon was the exclusive licensee of the “sole” inventor of the patent and Ethicon sued U.S. Surgical for infringement. U.S. Surgical investigated and located a “missing” (ie. unnamed) joint inventor and then proceeded to negotiate a license from him. Ethicon challenged the validity of the license. The courts upheld the validity of the license because the “missing” inventor, as a joint inventor, was a joint owner of the entire patent. Ethicon v. U.S. Surgical Corp., 135 F.3d 1456 (Fed. Cir. 1998), cert. denied, 525 U.S. 923 (1998).

The cautionary tale here is that even a one percent contributor to a patent will be a joint owner of the entire patent. An owner of a patent who believes that he has exclusive control of the patent may be sadly mistaken and find himself suddenly competing with another company.

The key for the “sole” inventor is to make sure that all others (ie. employees, etc.) who may work on any aspect of the invention have valid employement agreements or valid joint venture agreements that contain the proper assignment clauses. These agreements must be entered into prior to any work by the employee or contractor.

For the purchaser of a patent, proper due diligence will be key to understanding where the potential risks may arise. Due diligence should include review of agreements with employees or contractors working on the development of the intellectual property. Drafting strong purchase agreements and transaction documents can help protect the purchaser. Effective guarantees, warranties, indemnification and assignment clauses can lessen the financial impact, if something unpleasant occurs following the purchase of the intellectual property.

Intellectual Property, Patents

Expired Patents

Updated:  June 28, 2010. See THIS.  Federal Circuit held that Solo Cup did not have the “intent to deceive the public” required for false marking liability.  The court created a high bar for plaintiffs to overcome and the decision will put a damper on the false-marking claims.  However, some defendants may not have the same advice-of-counsel excuse that Solo Cup was able to rely upon.  The case below is still highly pertinent to businesses with patents.

Recently, hundreds of companies have been sued for false patent marking.  Federal statute creates a cause of action against a manufacturer who, with intent to deceive the public, mark unpatented products as patented. Any person may sue to collect the damages, however, half of the award goes to the Federal Government.  Damage awards may be awarded up to $500 per falsely marked article.

One of the largest of such cases is Pequignot v. Solo Cup Co. where Solo Cup Co. is being sued by a patent attorney claiming the company is misleading consumers by marking its products with expired patent numbers.  To save money on retooling and other costs, Solo Cup had continued to mark its products with patent numbers even though those patents had expired.  Pequignot sought a damage total exceeding $10 trillion based on the $500 per falsely marked article standard.

The judge ruled in Solo Cup’s favor, but the case is on appeal.  What happens on appeal will likely have great ramifications for other manufacturers.  This case is one in a series of recent cases raising false marking claims, and it highlights the potentially high stakes from falsely marking products — the maximum potential damage award against Solo was enormous. However, the court’s decision creates a high bar for plaintiffs seeking to obtain a favorable decision in such cases, at least when the defendant has acted in good faith.

This unusual case raises the question of how businesses can protect themselves from patent-marking bounty hunters.  Since federal law allows individuals to sue for false marking and reap monetary benefits, it is imperative that companies learn how to avoid false-marking liability.

First: Pay attention to the details of your patent.  When does it expire?  Stop marking the product once it does expire.

Second: Take steps to build your market base by developing a strong trademark while you have patent protection.  This will help your market dominance even after your competitors can enter your market and produce “copies” of your product.

Third: Patent your ongoing innovations.  Patent your new and improved changes to your product.  This will give you protections that will extend beyond the length of your original patent protection.

Intellectual Property

Who is an Inventor? Is it important?

Inventors on a patent should only be ones who provided inventive contribution that will be part of the material later claimed.  It can be very problematic for a company embroiled in a patent contest in court, if an inventor is listed who did not provide inventive input or an  inventor was left out who did provide inventive input.

Someone who helps build a portion of the system, but did not provide inventive input to what is described as inventive material in the patent application, is not an inventor.

Normally, the inventors will assign the patent rights to an invention to the company for which they are working for.  If someone is an inventor that is not an employee of the company then that needs to be handled properly and their assignment should be obtained.  A company should decide whether some incentive should be given to inventors, possibly stock options based on the price of the shares at the time of the invention.