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The Importance of Getting Inventorship Right: A Cautionary Tale in Two Cases

U.S. patent law elevates the importance of “the inventor” to an extent unseen in the rest of the world.  Unlike many other countries, ownership of patent applications in the United States initially vests in the inventors listed on the application.  This is true even where a contractual obligation for inventors to assign their ownership rights to others exists, such as the case in many employment or academic settings.  This post summarizes two cases where an incorrect determination of inventorship on a patent application resulted in negative consequences for patent owners and/or licensees of an issued patent.

The first case, Joany Chou v. The University of Chicago, (59 U.S.P.Q.2d 1257 (Fed. Cir. 2001)), involved Joany Chou, a graduate student and later postdoctoral fellow in the lab of Dr. Bernard Roizman at the University of Chicago.  During the course of her research, Dr. Chou developed a vaccine for the treatment of herpes virus and expressed her belief to Dr. Roizman that it should be patented. Dr. Roizman responded by stating that the discovery was not patentable and that she should drop the subject. Next, Dr. Roizman secretly filed a patent application on the vaccine which issued as a patent, with Roizman listed as the sole inventor. By virtue of Roizman’s employment contract, the patent was owned by the University, but Roizman received substantial royalty payments when the technology was licensed to a pharmaceutical company.  As a graduate student/post-doc, Dr. Chou would have been entitled to royalties as well under the University’s policies, had she been correctly listed as an inventor on the patent.

Over time, the relationship between Drs. Chou and Roizman deteriorated, ultimately resulting in her involuntary dismissal from the lab.  When Dr. Chou learned of the existence of the patent that Dr. Roizman had filed, she sued Dr. Roizman, the University of Chicago, and the licensee of the technology arguing improper exclusion from inventorship and petitioning the court to add her as an inventor.  The District Court held for the University, holding that Dr. Chou did not have standing to sue for correction of inventorship, since she would not have had an ownership interest in the patent due to a contractual obligation to assign to the University.

On appeal, the Federal Circuit reversed the decision of the District Court and held that an expectation of ownership of a patent is not a prerequisite for a putative inventor to possess standing to sue to correct inventorship. None of the parties disputed the fact that Dr. Chou never signed a contract with the University specifically obligating her to assign ownership.  However, she accepted her academic appointment subject to the administrative policies of the University which included an obligation to assign.  The Court stated that “Chou should have the right to assert her interest, both for her own benefit and in the public interest of assuring correct inventorship designations on patents.”  Chou also argued that exclusion as an inventor harmed her academic reputation and that a reputational interest alone was sufficient to satisfy standing. The court noted that this was “not implausible,” due to the prestige associated with inventorship of an important patent.  However, as Chou also alleged a financial interest (royalties owed by the University), the Court did not decide that issue, holding that standing in this case was derived from the "economic stake" Chou had in ensuring correct inventorship on the patent.

Fourteen years later in Shukh v. Seagate Technology, LLC, 803 F.3d 659 (2015), the Federal Circuit revisited the reputational injury question it had left open in Chou.  Shukh was an engineer who sued his former employer asking for a correction of inventorship as well as breach of contract and discrimination associated with his firing.  In this case and unlike in Chou, the would-be inventor had no economic interest in ensuring that inventorship was correct on the issued patent, because he was obligated to assign to his employer all rights to any inventions as a condition of employment.  Instead, Shukh asserted that reputational injury caused by being excluded from inventorship was sufficient to grant standing to sue.

Federal Circuit agreed and held that “concrete and particularized reputational injury can give rise to standing.”  Specifically, the court reasoned that “‘being considered an inventor of important subject matter is a mark of success in one’s field, comparable to being an author of an important scientific paper.’ …  ‘[p]ecuniary consequences may well flow from being designated as an inventor.’ For example, if the claimed inventor can show that being named as an inventor on a patent would affect his employment, the alleged reputational injury likely has an economic component sufficient to demonstrate Article III standing.”

For practitioners, including technology licensing managers in academic and research settings, the take away lesson from these cases is to always ensure that a legal inventorship determination has been carried out prior to the filing of a patent application.  The role of each individual involved in the research project or technology development process should be evaluated. This is even more important since, as shown in Shukh, contractually excluding inventors from financial incentives for creating patentable inventions will not shield a company or university from litigation due to incorrect determination of inventorship if the excluded inventor can merely raise the possibility of reputational harm resulting from being left off of the patent.

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Ingrid A. Beattie, PhD