684 F.3d 1276
Fed. Cir.2012Background
- Preston and Marathon dispute ownership of the ’764 and ’385 patents arising from Preston’s baffle-system invention.
- Preston signed February 2001 offer letter and a separate April 5, 2001/2003 Employee Agreement containing an IP assignment clause.
- The April Agreement defines Intellectual Property and requires the employee to assign it to Marathon; Preston listed CH4 Resonating Manifold as a prior invention.
- Marathon developed internal patenting and Preston’s work culminated in the ’764 patent (Preston sole inventor) and the ’385 patent (co-inventors Preston and Smith).
- Marathon asserted ownership via the assignment; Preston argued lack of consideration and non-scope of the assignment, plus alleged pre-employment conception.
- The district court ruled Marathon owned both patents via the assignment and found a shop right; Preston was deemed sole inventor of the ’385 patent but in breach for not assigning, which this court partly vacated.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of the April Employee Agreement | Preston contends lack of consideration invalidates the assignment. | Continued at-will employment provides sufficient consideration per Wyoming law. | Agreement valid; continued at-will employment sufficient consideration. |
| Scope and effect of the assignment of the ’764 and ’385 patents | Inventions are not within IP defined or excluded by Paragraph 4; Preston retained ownership. | Inventions fall within IP under Paragraph 1(d) and are automatically assigned under Paragraph 3. | Preston assigned the ’764 and ’385 rights to Marathon automatically. |
| Pre-employment conception versus post-employment invention | Conception occurred before employment, excluding from assignment. | Invention developed during employment; not pre-employment conception. | Record supports post-employment development; no pre-employment invention; assignment valid. |
| If not reached, whether shop rights or misjoinder affect outcome | Shop rights could authorize Marathon’s use independent of assignment. | Shop right argument is subsumed by the explicit assignment. | Not reached on appeal. |
| Breach of contract regarding assignment execution | Preston breached by not executing an assignment. | Automatic assignment negates need for further execution. | Vacated; automatic assignment renders breach finding unnecessary. |
Key Cases Cited
- DDB Techs., L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 1284 (Fed. Cir. 2008) (automatic assignment where contract grants rights in future inventions)
- Hopper v. All Pet Animal Clinic, Inc., 861 P.2d 531 (Wyo. 1993) (at-will employment and consideration for post-employment restrictions)
- Univ. of Pittsburgh v. Hedrick, 573 F.3d 1290 (Fed. Cir. 2009) (conception standards in patent context)
- Burroughs Wellcome Co. v. Barr Labs., Inc., 40 F.3d 1223 (Fed. Cir. 1994) (definition of conception and invention in a patent assignment context)
- Euclid Chem. Co. v. Vector Corrosion Techs., Inc., 561 F.3d 1340 (Fed. Cir. 2009) (contract interpretation for patent assignments)