Huster v. J2 Cloud Services, Inc.
682 F. App'x 910
| Fed. Cir. | 2017Background
- Phyllis Huster sued Charles Bobo and corporate entities claiming she was inventor or co-inventor of systems claimed in nine patents (applications beginning in 1995; patents issued 1997–2011). She asserted a § 256 correction-of-inventorship claim and multiple state-law claims (fraudulent concealment, breach of fiduciary duty, unjust enrichment, conversion, etc.).
- Huster alleges conception and prototype work pre-December 1994, an agreement in January 1995 to be named co-inventor, that she financed early prosecution contacts, and that Bobo thereafter proceeded with filings without her being named.
- In 2012 Huster assigned her interests to Phyllis Anke Technologies, LLC; a 2014 Washington state court entered a judgment against Huster and a charging order divested her of any right, title, and interest in that LLC until the judgment was satisfied.
- The district court dismissed Huster’s correction-of-inventorship claim for lack of Article III standing and granted summary judgment for Bobo on the remaining state-law claims as time-barred by Georgia’s statute of limitations (four years), rejecting tolling/continuing-violation arguments.
- On appeal the Federal Circuit affirmed the statute-of-limitations rulings, agreed Huster lacked standing on the present record, but modified the dismissal of the inventorship claim to be without prejudice (per Eleventh Circuit law).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing to seek correction of inventorship (economic interest) | Huster contends she has economic interest (e.g., alleged Yahoo license contingent on her being inventor; value exceeds state judgment) | Huster was divested of present economic interest by her 2012 assignment and the 2014 charging order; no present cognizable economic stake | No standing to assert economic interest; dismissal affirmed (but modified to without prejudice) |
| Article III standing to seek correction of inventorship (reputational interest) | Huster asserts reputational injury from not being named inventor (meet Shukh standard) | Huster failed to plead or present facts showing concrete, particularized reputational harm | No standing for reputational injury; plaintiff did not establish requisite factual allegations |
| Tolling fraudulent-concealment statute-of-limitations | Huster argues Bobo concealed prosecution and tolling should run until March 2010 when she learned of patents | District court: Huster had actual knowledge by 1996 (deposition, contemporaneous notes) and did not diligently pursue claims; alleged omissions did not conceal existence of causes of action | No tolling; summary judgment for defendants on state-law claims affirmed |
| Continuing-violation doctrine and amendment/substitution of plaintiff | Huster raises continuing violation on appeal and sought leave to substitute Phyllis Anke Technologies as plaintiff | Defendants note arguments were not raised below; Huster never sought leave to amend in district court | Continuing-violation argument forfeited; no leave-to-amend relief considered on appeal |
Key Cases Cited
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (standing requires concrete and particularized injury)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing framework)
- Chou v. Univ. of Chicago, 254 F.3d 1347 (Fed. Cir. 2001) (§ 256 correction-of-inventorship principles)
- Shukh v. Seagate Tech., LLC, 803 F.3d 659 (2015) (reputational injury can support inventorship standing)
- Zelaya v. Secretary, Fla. Dep’t of Corrections, 798 F.3d 1360 (11th Cir. 2015) (dismissal for lack of standing must be without prejudice)
- Crotwell v. Hockman-Lewis Ltd., 734 F.2d 767 (11th Cir. 1984) (court may modify district court order to state dismissal without prejudice)
- Procaps S.A. v. Patheon, Inc., 845 F.3d 1072 (11th Cir. 2016) (appellate review of summary judgment is de novo)
- Jim Walter Corp. v. Ward, 265 S.E.2d 7 (Ga. 1980) (elements required to toll statute of limitations for fraud/concealment)
- Charter Peachford Behavioral Health Sys., Inc. v. Kohout, 504 S.E.2d 514 (Ga. Ct. App. 1998) (concealment means concealment of existence of cause of action)
- Hunter, Maclean, Exley & Dunn, P.C. v. Frame, 507 S.E.2d 411 (Ga. 1998) (confidential relationship does not indefinitely toll limitations where plaintiff knew facts but delayed)
- Panduit Corp. v. All States Plastic Mfg. Co., 744 F.2d 1564 (Fed. Cir. 1984) (federal circuit follows regional circuit law on non-unique matters)