Shum v. Intel Corp.
633 F.3d 1067
| Fed. Cir. | 2010Background
- Shum sued Intel, LightLogic, and Verdiell claiming inventorship and several California-law fraud claims related to Radiance’s dissolution and LightLogic’s sale.
- Shum and Verdiell were equal Radiance shareholders/officers; Radiance’s Plan of Liquidation let them pursue competing opportunities and to independently exploit Radiance IP.
- Radiance filed a patent application with Shum listed as the sole inventor; Verdiell later claimed inventorship and Radiance’s IP shifted to LightLogic after dissolution.
- LightLogic grew rapidly, raised substantial financing, and Intel acquired LightLogic in 2001 for $409 million; Intel received Radiance POL and disclosures noting equal rights to Radiance IP.
- Patents at issue included six LightLogic patents; most named Verdiell as sole inventor, with one ('427) listing multiple co-inventors; Shum was not listed on the patents.
- At trial, the jury found Shum co-inventor on five patents, deadlocked on others, and the district court later granted JMOL on several state-law claims; Shum appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of fiduciary duty and standing | Shum alleges Verdiell owed Radiance and Shum fiduciary duties due to cooperation and joint ownership. | Shum lacked standing to sue for Radiance’s duties; POL permitted competition; no fiduciary duty between Shum and Verdiell. | No fiduciary duty or standing; summary JMOL affirmed. |
| Fraudulent concealment | Verdiell concealed plans to form LightLogic and compete, violating a duty to disclose material facts. | No fiduciary duty; statements about equal rights were truthful under the POL; no exclusive concealment. | No actionable fraudulent concealment; post-trial JMOL affirmed. |
| Unjust enrichment | Verdiell’s misrepresentations about exclusive rights enriched LightLogic and Intel at Shum’s expense. | No causal link or beneficiary at Shum’s expense; Intel’s deal valued the Radiance IP, not exclusivity to Shum. | Post-verdict JMOL proper; no sufficient causation or benefits to Shum. |
| Breach of contract | POL’s provisions allowed equal exploitation; filing exclusive patents violated the agreement. | No injury shown; exclusive rights could be lawfully pursued; no damages proven. | Post-verdict JMOL proper; no proven damages to sustain breach. |
| Correction of inventorship for the '427 and '724 patents | Shum contributed to the inventive concept; should be co-inventor. | Evidence did not prove substantial, timely contribution; missed conception window. | District court’s JMOL affirmed; no clear and convincing evidence of co-inventorship for these claims. |
Key Cases Cited
- Persson v. Smart Inventions, Inc., 125 Cal.App.4th 1141 (Cal. Ct. App. 2005) (no fiduciary duty between equal shareholders absent special relationship)
- Nartron Corp. v. Schukra U.S.A. Inc., 558 F.3d 1352 (Fed. Cir. 2009) (joint inventor contributions must be significant and non-insignificant)
- Eli Lilly & Co. v. Aradigm Corp., 376 F.3d 1352 (Fed. Cir. 2004) (inventorship determination requires clear and convincing evidence)
- Ethicon Inc. v. U.S. Surgical Corp., 135 F.3d 1456 (Fed. Cir. 1998) (inventorship is a question of law reviewed de novo)
- City of Hope Nat'l Med. Ctr. v. Genentech, Inc., 43 Cal.4th 375 (Cal. 2008) (confidential relationships and fiduciary duties depend on facts and circumstances)