Federal Circuit IP
Core Optical Techs., LLC v. Nokia Corp
By: Aikaterina (Katina) Assimacopoulos
Fed. Cir. No. 23-1001 (May 21, 2024)
(Taranto, Dyke, and Mayer)
Issue: Is the phrase “entirely on [one’s] own time” unambiguous in an employment contract?
Holding: No. “Entirely on [one’s] own time” could reasonably be interpreted to refer to all ‘off-the-clock’ time, or only a portion of it, and, thus, interpretation requires inquiry into the parties’ intent.
Background: Core Optical (“Optical”) alleged Nokia infringed the ‘211 patent. Nokia moved for summary judgment, alleging Optical lacked standing to assert the patent because it had been automatically assigned to a third party, rendering any subsequent assignment to Optical, invalid.
- Upon employment at TRW, Dr. Core signed an invention “Agreement” containing an “Exception”. The Agreement “hereby assign[s]” future inventions to TRW and the Exception excludes inventions which were developed “entirely on [one’s] own time”, without TRW equipment, and which were unrelated to the business or not a product of work performed for it.
- While employed, Dr. Core entered a PhD program at UIC, qualifying him for a TRW fellowship. The fellowship granted Dr. Core a stipend, PhD tuition, and part-time employment with full benefits conditioned upon his pursuit of a job-related degree, attendance at TRW sponsor meetings, and commitment to return full-time for one year.
- While pursuing his PhD, Dr. Core conceived of the invention and filed a provisional, naming himself as assignor. Dr. Core informed two TRW employees of his invention and both employees verbally disclaimed TRW’s ownership interest. Dr. Core subsequently assigned the patent to his business, Optical, and recorded the assignment with the USPTO.
- Years later, Northrop, having acquired TRW, asserted ownership for the first time, despite having previously been put on notice of Optical’s asserted rights through unrelated litigation.
The D. Ct. granted Nokia summary judgment, finding the language of the Exception unambiguous, as a matter of law, in failing to exclude the ‘211 patent from automatic assignment.
Federal Circuit: The Fed. Cir. agreed with the D. Ct.’s finding that the determinative issue was whether the invention was “entirely on [Dr. Core’s] own time.” It declined to overrule, without en banc action, the precedent set forth in Filmtec that allows automatic assignment without post-invention action.
- The Fed. Cir. analyzed the meaning of the contract under CA state law, finding: the contract language ambiguous; the ambiguity unresolved; and the external facts pertaining to the parties’ intent, unexplored. The case was vacated and remanded for additional fact finding.
- In addition to any applicable state law principles of contract interpretation, the court found the following may be material, on remand, to resolve the issue of intent:
- TRW employees’ representation that TRW maintained no ownership interest; and
- Northrop’s delay in asserting ownership and potentially valid explanation for doing so.
J. Mayer’s Dissent: The fellowship benefits disqualify PhD research time as “entirely” Dr. Core’s own.
Takeaways: A pre-conception contract remains sufficient to create legal title in future inventions. Filmtec.
- An inventor attempting to assert ownership over a patent arguably subject to automatic assignment, may require assignment-back even if the original assignee orally disclaimed interest.
- Though adverse-possession-type concepts do not overtly apply to ownership determinations, they may be considered in assessing intent.