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Recent U.S. Decisions Affecting Licensing

Tuesday, August 23, 2016   (0 Comments)
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Alleged Omitted Inventor With No Patent Ownership Fails to Adequately Allege Reputational Harm to Sue for Inventorship Correction 

By John Paul, Brian Kacedon, and Rob MacKichan

The Patent Act provides a cause of action to sue for the correction of inventorship on a patent in federal district courts. As with all types of suits, Constitutional requirements of standing require that a party bringing suit demonstrate a sufficient connection to the harm sought to be redressed. When an individual sued PepsiCo, claiming he should have been listed as an inventor on a patent, the Federal Circuit found he had no standing to sue for correction of inventorship on a patent where he had assigned away any ownership interest and merely alleged that he “sustains and/or might sustain” reputational injury as a result of the alleged omission.

Dr. Kamdem-Ouaffo worked as a food scientist under a contract at a PepsiCo, Inc. research and development facility starting in July 2008. He signed an agreement assigning all of his patent rights arising from his work under the contract to PepsiCo. When his contract with PepsiCo expired in September 2009, it was not renewed. Following the expiration of his contract, Dr. Kamdem-Ouaffo sent a letter to PepsiCo claiming “authorship” on “any current or future work resulting in . . . flavor encapsulates or . . . aroma delivery systems.” PepsiCo subsequently filed five patent applications on which Dr. Kamdem-Ouaffo claims he was erroneously omitted as a named inventor. One of the applications became a patent for “Releasable Entrapment of Aroma Using Polymeric Matrix.”

Dr. Kamdem-Ouaffo sued PepsiCo for a number of claims including correction of inventorship of the patent applications under 35 U.S.C. § 116 and correction of inventorship of the patent under 35 U.S.C. § 256. Dr. Kamdem-Ouaffo also alleged that the agreement he signed, assigning all of his patent rights to PepsiCo, is unenforceable, invalid, or voidable. The district court dismissed all of Dr. Kamdem-Ouaffo’s claims and he appealed.

The Federal Circuit’s Decision
The Federal Circuit found it was appropriate for the district court to dismiss Dr. Kamdem-Ouaffo’s claims that his assignment to PepsiCo was unenforceable because there was insufficient support for Dr. Kamdem-Ouaffo’s allegations of lack of mutual assent, failure to disclose material facts, and ambiguity. 

Having established that Dr. Kamdem-Ouaffo assigned his patent rights to PepsiCo, the Federal Circuit considered whether Dr. Kamdem-Ouaffo had standing to assert his claims for correction of inventorship even though he had no ownership interest in the applications or the patent. As to the four pending applications, the Federal Circuit affirmed the district court’s determination that there is no private right of action to challenge inventorship on a pending patent application. 35 U.S.C. § 116 only allows an applicant to correct named inventorship during the pendency of prosecution of the patent. Once a patent issues, however, 35 U.S.C. § 256 provides a private right of action to correct inventorship on the issued patent.

The Federal Circuit did note that Dr. Kamdem-Ouaffo’s lack of ownership in the issued patent did not necessarily deprive him of standing to pursue correction of inventorship under § 256 if he suffered “concrete and particularized reputational injury” tied to economic consequences, such as loss of employment prospects.” However, Dr. Kamdem-Ouaffo’s bare assertion that he “sustains and/or might sustain damages in terms of the loss of the ownership, inventorship, recognition, and the honor for his” patent rights was not sufficient to provide him with standing to sue as such assertion was merely “conjectural or hypothetical” rather than concrete and particularized.  Accordingly, the Federal Circuit held that Dr. Kamdem-Ouaffo did not adequately allege facts demonstrating actual harm to his reputation by virtue of economic damage from not being listed as an inventor on the patent and lacked standing to sue for correction of inventorship claims. 

Strategy and Conclusion
Naming the correct inventors is important under United States patent law and may impact a patent’s validity.  Errors in naming inventors may be corrected so long as the error was not made with deceptive invent While typically such corrections are made by the patent owner, even inventors no longer having an ownership interest in the patent may be able to sue for correction by showing actual harm to reputation and an economic impact such as loss of employment.

Further information
The PepsiCo opinion is available here.

Editors and authors
The editors and authors are attorneys at Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P.

John Paul john.paul@finnegan.com
Brian Kacedon brian.kacedon@finnegan.com
Robert C. MacKichan robert.mackichan@finnegan.com
Robert Wells robert.wells@finnegan.com

This article is for informational purposes and does not constitute legal advice.
The views expressed do not necessarily reflect the views of LES or Finnegan.