Paying for Reduction to Practice of an Invention Does Not Make One a Co-Inventor of the Invention

December 28, 2011

Defendant was the sole named inventor of the patent in suit. Plaintiff brought a claim for inventorship, alleging that he was the co-inventor of the patent. The parties cross moved for summary judgment and for sanctions.

The defendant and plaintiff maintained a business relationship for approximately 15 years, with plaintiff agreeing to pay the defendant $5000 in consulting fees in connection with the plaintiff's idea for a video product to be used in automobile marketing. Defendant would act as a consultant and advise the plaintiff how to build the system. Defendant in fact designed the system, hired one or more computer programmers and had the system built.

Patent applications were filed and assigned to a company owned 90% by the plaintiff and 10% by the defendant. Two of the patent applications ultimately issued as patents and a continuation-in-part patent issued that would become the subject of the litigation. Many years later, the plaintiff contacted the defendant and asked him to assign the issued patents, including the continuation-in-part patent. The defendant refused to assign the patents and the plaintiff filed suit claiming he was a co-inventor of the patents. Plaintiff's claim to inventorship was that he had "the idea" for the invention, but defendant disputed that claiming that plaintiff's idea was only a marketing concept and that defendant came up with the entire patentable invention.

The district court agreed with the defendant. The district court concluded that there was no evidence in the record to support plaintiff's claim that he conceived of the invention. The district court rejected plaintiff's argument that he was an inventor because he financed the project, including the reduction to practice, stating that "while reduction to practice is a legal requirement of invention, there is no legal basis for [plaintiff's] assertion that financing such reduction to practice equates to invention itself."

The district court also found that plaintiff was confusing the concept of ownership with inventorship and that the assignment at issue did not include continuations-in-part. "Ownership of a parent application guaranties [sic] neither inventorship nor ownership of subsequent continuations-in-part, and an assignment that enumerates specific applications does not include continuations-in-part of those enumerated applications unless explicitly provided for in the assignment. . . . Here, there is no language in the parties' assignment that suggests that any continuations-in-parts were to be assigned. Moreover, the entire concept of patent assignment is predicated on the distinction between inventorship and ownership; if someone is the inventor of a patent, assignment is unnecessary."

Thus, the district court granted defendant's motion for summary judgment on the issue of co-inventorship. The district court also awarded sanctions in favor the defendant, finding that the plaintiff had not conducted a sufficient investigation into the merits of the inventorship claim.

TS Holdings, Inc. and Ronald Thomas v. Barry Schwab, Case No. 09-cv-13632 (E.D. Mich. Dec. 16, 2011)

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.