Employment Agreement That Included a “Will Assign” Provision, a Trust Provision, and a Quitclaim Provision Insufficient to Transfer Ownership Interest

In Advanced Video v. HTC, the Federal Circuit affirmed that Advanced Video Technologies (“Advanced Video”) lacked standing to bring an infringement suit because the future-tense “will assign” provision in the Employment Agreement did not effect an assignment.

Advanced Video argued that a co-inventor of the asserted patent transferred her rights to the patent pursuant to three provisions of her Employment Agreement: a “will assign” provision, a trust provision, and a quitclaim provision. The Court disagreed on all three. First, the Court found the “will assign” language alone “does not create an immediate assignment.” Second, the Court found that the trust provision undermined the existence of an immediate assignment because an inventor could not immediately assign patent rights and at the same time hold them in trust. The Court also noted that even if Advanced Video were the beneficiary, under California law, a beneficiary is not the real party in interest, may not sue in the name of the trust, and has no title or ownership interest in the trust. Lastly, although the quitclaim provision waived the co-inventor’s interest in any patent rights that she assigned under the agreement, because no patent rights were ever assigned this provision was inapplicable.