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Putative Inventor Obligated to Assign Invention to Another Has Standing to Sue for Correction of Inventorship

July 03, 2001

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Last Month at the Federal Circuit - August 2001

Judges: Lourie (author), Mayer, and Bryson

In Chou v. University of Chicago, No. 00-1317 (Fed. Cir. July 3, 2001), the Federal Circuit reversed a district court’s holding that a purported inventor of an issued patent lacked standing to sue for correction of inventorship. The district court had held that the purported inventor lacked standing because she had no expectation of ownership of the patent, but rather, was obligated to assign all inventions to her employer. The Federal Circuit also reversed improper holdings on certain other statelaw claims arising from the alleged failure to include the purported inventor on three patents.

Joany Chou, Ph.D., sued for correction of inventorship under 35 U.S.C. § 256, seeking to be named as the sole inventor or a joint inventor on three patents relating to the herpes simplex virus. Specifically, Chou sued Bernard Roizman, Ph.D., her former academic advisor; the University of Chicago (“the University”), her former employer; ARCH Development Corporation (“ARCH”), a wholly owned subsidiary of the University; and Aviron Company (“Aviron”), the exclusive licensee of the disputed patents (collectively “the Defendants”), claiming that the Defendants refused to name her as an inventor on those patents. In addition, Chou charged the Defendants with fraudulent concealment, breach of fiduciary duty, unjust enrichment, breach of contract, and academic theft and fraud arising out of that refusal to name her as an inventor.

The district court had dismissed Chou’s suit for correction of inventorship, holding that she lacked standing to bring the claim. Specifically, the district court had concluded that because she was obligated to assign all inventions to the University, Chou could not claim ownership of any of the patents and, thus, had no standing to seek relief under section 256. Although the Federal Circuit agreed that Chou was obligated to assign her inventions to the University, it concluded that Chou nevertheless had standing to seek correction of inventorship.

The Federal Circuit ruled that section 256 contains no requirement for an expectation of ownership of a patent as a prerequisite for a putative inventor to have standing to sue to correct inventorship. As to the constitutional considerations for standing, the Court ruled that Chou’s omission as an inventor on the disputed patents, if improper, would result in an injury-in-fact directly traceable to that omission, which could be remedied by correction of inventorship. Moreover, the Court held that each of the Defendants was properly named in Chou’s claim under section 256 because each one had an economic stake in the disputed patents. Accordingly, it reversed and remanded that claim to the district court.

The district court had also dismissed Chou’s state-law claims against the Defendants for failure to state a claim upon which relief could be granted. The district court had dismissed Chou’s fraudulent concealment claim against all of the Defendants, holding that none of the Defendants had a duty to inform Chou of the status of the patent applications. The Federal Circuit disagreed, holding that Roizman had failed in his duty to advise Chou of applications on which she may have been an inventor. The Court further concluded that Chou had stated a claim for fraudulent misrepresentation against the University and ARCH because Roizman was an agent for those parties, but had failed to state a claim against Aviron because Roizman was not an agent for it.

Similarly, the Court reversed the district court’s dismissal of Chou’s claim for breach of fiduciary duty. The Federal Circuit ruled that Chou had adequately pled a claim for breach of fiduciary duty against her superior, Roizman, and the University under an agency theory. The Federal Circuit affirmed with respect to Aviron, however, holding that Chou had failed to allege its liability under an agency theory.

The Federal Circuit reversed the district court’s dismissal of Chou’s claim of unjust enrichment against Roizman, holding that she had adequately alleged that Roizman had unjustly retained the benefit of Chou’s research. The Federal Circuit reversed regarding the other Defendants, however, because Chou was obligated to assign her inventions to the University and, thus, those parties would have been enriched by Chou’s inventions even if she had been a named inventor.

The Federal Circuit reversed the district court’s dismissal of Chou’s breach of contract claim against the University, finding that Chou had adequately alleged that the University, in violation of its express policies, had failed to compensate her for her invention. Furthermore, the Court reversed the district court’s dismissal of Chou’s claim against Roizman for the breach of an implied-in-law contract, holding that Chou’s adequate pleading of unjust enrichment satisfied the pleading requirements for the related breach of contract claim.

Finally, the Federal Circuit affirmed the striking of Chou’s claim of academic fraud and theft because it was immaterial and redundant to her complaint.