Jarrah then opened an establishment in Houston called “Rebels Honky Tonk” in August, 2009.

Rebels Honky Tonk Houston logo

Then Truesdell opened a “Rebels Honky Tonk” in Austin in September, 2009 and a “Rebels Honky Tonk” in Oak Ridge North, Texas in March, 2012. He also registered the REBELS HONKY TONK trademark, the same logo the Jarrah was using:

Logo from USPTO website

The parties cross-claimed on likelihood of confusion, so the only question is—who owns the mark?

These are all the facts the court needed to decide the claims on a motion for judgment on the pleadings:

Ownership of a mark is established by use in the market, not by registration. As stated in a leading treatise,

Neither application for, nor registration of, a mark at the federal level wipes out the prior nonregistered, common law rights of others. The nonregistered rights of a senior user continue and are not trumped by the later federal registration of a junior user. The “senior user” who first uses the mark in the marketplace “is entitled to enjoin other ‘junior’ users from using the mark, or one that is deceptively similar to it.”

Defendants do not dispute that Plaintiffs opened Rebels Honky Tonk Houston in August 2009. Defendants’ own pleadings state that Truesdell did not open Rebels Honky Tonk Austin until November 2009. Rebels Honky Tonk Oak Ridge was then opened in March 2012. By Defendants’ own allegations, therefore, Plaintiffs have ownership of Plaintiffs’ Marks by virtue of their priority of use in the market. Truesdell’s registration of his Mark does not establish ownership.

Truesdell’s claim that he developed the name, logo and concept while in the business relationship with Jarrah doesn’t matter, at least for a trademark infringement claim.

Reservoir, Inc. v. Truesdell, No. 4:12-2756 (S.D. Tex. April 30, 2013).

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The statutory sections involved are not similar, but nevertheless the district court should take a lesson from the Hawai’i court on the distinction between the legal ownership of an intangible asset and an interest in the income stream from it. The Hawai’i Supreme Court compared a copyright to a paycheck:

A paycheck issued by the employer in the name of the employee-spouse alone can be cashed, deposited, or otherwise negotiated only by that spouse; yet, the proceeds of the paycheck, representing earnings of one spouse in community, belong to the community.

The district court started out well enough, noting that, according to Enovsys LLC v. Nextel Communications, Inc., 614 F.3d 1333 (Fed. Cir. 2010), a federal court must give full faith and credit to a state’s division of assets in a divorce. It therefore held that:

the Patent was obtained while the Plaintiff and Ms. Taylor were married, and the Divorce Settlement confirms Ms. Taylor’s ownership interest in the Patent. Since Ms. Taylor has legal title to the Patent under Florida law, and has not been made a party to the action at hand, the Plaintiff lacks standing to sue for infringement.

But hold on a second, what exactly did the divorce decree say?

click for larger version

If you can’t read the image, it says

The Court finds that the proceeds from the production of the patents shall be split 60% to the Wife and 40% to the Husband after the fees of the Special Master are paid should her services be necessary. If the parties cannot agree on the distribution of royalties by the Court, all disputes will be brought before the Special Master for resolution. The reason for the unequal distribution of the patent income is based upon the Husband’s current inability to pay alimony and taking into consideration of the lifestyle and standard of living of the parties during the marriage.

I don’t know how the divorce court could have stated more clearly that the former Mrs. Taylor has only an income interest, not legal ownership, of the patents: “proceeds from the production of the patents,” “distribution of the royalties,” “patent income.” It was error on the part of the district court to confuse an award of income from the patent with legal ownership of it.

The good news is that the case is closed so the decision is immediately appealable.

Taylor v. Taylor Made Plastics, Inc., No. 8:12-CV-746-T-EAK-AEL (S.D. Fla. April 29, 2013).

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Clicking “Continue” confirms that craigslist is the exclusive licensee of this content, with the exclusive right to enforce copyrights against anyone copying, republishing, distributing or preparing derivative works without its consent.

A screenshot of the page is below:

(click for larger image)

Copy of exhibit filed with the court here.

Four days after the statement was added, Craigslist sued various companies that were harvesting and reproducing Craigslist postings on a variety of claims, including copyright infringement. The defendants challenged whether Craigslist had a sufficient ownership interest in the copyright of the users’ posts to bring suit, namely, whether it indeed had an exclusive license to the posts submitted when this language was displayed.

A grant of exclusive rights to copyright must be in writing, but the Electronic Signatures in Global and National Commerce Act (“E-Sign”), 15 U.S.C. §§ 7001 et seq., allows for the electronic signature of documents. An e-signature will be “an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.” 15 U.S.C. § 7006(5). In light of the E-Sign Act in part, The Court of Appeals for the 11th Circuit held that it was “neither objective nor reasonable” to claim that a sequence of emails did NOT create a valid assignment of a copyright.

I’ve expressed skepticism in the past about whether an action should be considered an e-signature where the action taken has a different primary purpose (in the case linked above, the uploading of a file) and the supposed grant is not clearly stated. But as much as I disagree with the concept of granting Craigslist an exclusive license to a post, Craigslist couldn’t have been clearer that clicking “Continue” would effect the grant of an exclusive license.

Which is what the court found. So while I still highly doubt whether the person submitting the content realizes the legal significance of granting an exclusive license, Craigslist was required to do no more than it did.

But, Craigslist did not have an exclusive license to content submitted without the displayed language. The Terms of Use standing alone did not grant an exclusive license, largely because the agreement didn’t use the word “exclusive.”

Many other legal theories were covered in the decision, covered at:
EFF
Techcrunch
Forbes
Bloomberg
Ars Technica
Techdirt

Craigslist Inc. v. 3Taps Inc., No. CV 12-03816 CRB (N.D. Calif. April 29, 2013).

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Involuntary Transfer.— When an individual author’s ownership of a copyright, or of any of the exclusive rights under a copyright, has not previously been transferred voluntarily by that individual author, no action by any governmental body or other official or organization purporting to seize, expropriate, transfer, or exercise rights of ownership with respect to the copyright, or any of the exclusive rights under a copyright, shall be given effect under this title, except as provided under title 11.

It turns out, this section has also recently come up in the context of divorce. In Berry v. Berry, The divorce court awarded half ownership of the husband’s copyrights to the wife. On appeal, the Supreme Court of Hawai’i held that § 201(e) prohibited the transfer to the spouse of any of the exclusive rights granted by the Copyright Act (i.e., the rights to reproduce, adapt, distribute, perform and display). However, the spouse is entitled to a share of the economic interest in the copyrights. The court compared it to a paycheck:

A paycheck issued by the employer in the name of the employee-spouse alone can be cashed, deposited, or otherwise negotiated only by that spouse; yet, the proceeds of the paycheck, representing earnings of one spouse in community, belong to the community.

The position taken by the Supreme Court of Hawai’i is contrary to a position taken by a California appeals court. In In re Worth, the court held that while the ownership of the copyright originally vests in the author, the copyright thereafter immediately is transferred by operation of California community property law to both spouses. But In re Worth didn’t mention § 201(e) and the Hawai’i court didn’t buy the logic of Worth:

Worth’s holding can only be reconciled with the Copyright Act by concluding that the authoring spouse implicitly consented to transfer of his or her copyright to his or her spouse …. [Further], to preserve Worth’s rationale, Nimmer on Copyright suggests “[c]onstitutionally, … the courts must invoke a presumption, at least sub silentio, that the author-spouse consents to” “sharing author status.” To avoid problems raised by traditional co-ownership [e.g. the right to grant licenses], Nimmer advocates “adding to that presumption a complementary presumption” that the “nonauthor-spouse[ ] consent[s] to ceding full authority over disposition of the copyright to the author-spouse.”

The Hawai’i court chose not to follow the “legal gymnastics” underpinning Worth and instead held that the non-author spouse only has an economic interest in the copyrights, not ownership.

And the case that got me here: In re Shelton, 2013 IL App (5th) 120274 (April 22, 2013) (following Berry v. Berry).

Berry v. Berry, 127 Hawai’i 243, 277 P.3d 968 (May 11, 2012).

In re Worth, 241 Cal. Rptr. 135, 195 Cal. App. 3d 768 (App. Ct. 1987).

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Plaintiff Timegate Studios entered into an agreement where it would develop a video game called “Section 8″ and defendant Gamecock Media Group would distribute the game. The agreement was highly detailed about the parties’ relationship, including design and creation of the game, progress and expenditure milestones, marketing, and reporting and recordkeeping.

As to intellectual property rights, developer Timegate would be the “exclusive owner” of the intellectual property rights. Distributor Gamecock would have a “non-exclusive right and license … to use the Game Trademarks solely in connection with the packaging, sale, marketing, advertising and distribution” of the game and any add-ons or sequels. Gamecock was prohibited from preparing any derivative works or otherwise exploiting the Section 8 game outside of the terms of the agreement.

The game was produced but it failed expectations. Timegate sued Gamecock for breach of contract, including a claim that Gamecock misreported sales figures. Gamecock responded that Timegate failed to put forth its best efforts in developing the game and wrongfully unilaterally published a sequel and a version for a different platform. The parties, per the agreement, arbitrated the claim.

The arbitrator found that “Timegate had actively engaged in a litany of fraudulent misrepresentations and contractual breaches.” In addition to wrongfully pocketing Gamecock’s money and not spending its own, Timegate:

breached the Agreement by (1) self-publishing the Playstation 3 platform translation, or “port”, of Section 8 and (2) unilaterally developing a game sequel in direct violation of its licensing agreement with Gamecock. Timegate further breached the agreement by (3) failing to provide Gamecock with fully functioning versions of Section 8 downloadable content, (4) failing to provide a Russian translation of the game, and (5) failing to provide Gamecock with the necessary access codes corresponding to Gamecock’s exclusive right to distribute the game electronically via certain third-party websites.

The arbitrator awarded money damages of over $7 million. The arbitrator also reformed the contract, giving Gamecock a perpetual license to Timegate’s intellectual property, including the right to create sequels, ports and add-ons with no obligation to pay Timegate royalties. Gamecock moved the district court to affirm the award and Timegate objected on the basis that the arbitrator had exceeded his authority.

Where there is a finding of fraud an arbitrator may fashion an award which conflicts with contractual provisions, but the award still must be “rationally inferable from the parties’ central purpose in drafting the agreement.” The district court concluded that the perpetual license provision “takes what was a temporary licensing agreement, which required collaboration and coordination between the parties, and expands it into a permanent contract under which the parties are able to develop competing products.” It found this inconsistent with the fundamental purpose of the contract and vacated the award. Gamecock appealed.

An arbitrator’s award is sustained as long as the decision “draws its essence” from the contract, only subject to reversal if it “was so unfounded in reason and fact, so unconnected with the wording and purpose of the contract as to manifest an infidelity to the obligation of an arbitrator…. The remedy lies beyond the arbitrator’s jurisdiction only if there is no rational way to explain the remedy.”

So the question becomes simply whether granting Gamecock a perpetual license for the development of software, when it had no license even close to that in the original contract, was furthering the aims of the contract. The Court of Appeals for the Fifth Circuit found it was.

The appeals court held that the purpose of the original agreement was to create a mutually beneficial business relationship to jointly create, market and popularize a video game with each sharing in the financial success. The perpetual license indeed furthered this purpose:

As Timegate’s counsel conceded at oral argument, we are bound by the arbitrator’s factual findings regarding Timegate’s conduct—findings which identify Timegate’s pattern of deliberate fraud, deception, and willingness to violate its promises. Timegate had breached the Agreement in so many ways and its relationship with Gamecock had become so contentious that the collaborative relationship presupposed by the Agreement was no longer possible. The perpetual license granted to Gamecock represents an attempt by the arbitrator to restore to Timegate and Gamecock the fundamental goal of the Agreement: mutual access to financial benefits derived from their joint creation and distribution of Section 8.

An adequate remedy in the form of a monetary award was available for Timegate’s breaches to date; however, whether sequels or other iterations of Section 8 would or could be developed successfully and marketed profitably (particularly estimates of the amount of such profit) was so speculative that the arbitrator rationally could have concluded that a monetary award was not an appropriate remedy for those breaches. Under these circumstances, where the relationship of the parties could not be expected to be healed primarily because of the fraud of Timegate, the parties could no longer partner together to market their product jointly. The only way to give Gamecock the opportunity to benefit from the future development of variations of Section 8 was to cut Gamecock loose from Timegate and allow it to independently pursue game marketing efforts. To do this, the arbitrator granted the perpetual license to Gamecock, a remedy that also left Timegate free to develop and promote Section 8 variations on its own.

I’m good with this decision with respect to the license in the copyright to the software, but I see the possibility of trouble with an undifferentiated name. You can easily see that there now may be two very different “Section 8″ games that will confuse consumers as they develop separately. I’m not a fan of disclaimers or uncontrolled use of trademarks by two parties, but here I would have at least required that the parties distinguish their versions of the game.

Timegate Studios, Inc. v. Southpeak Interactive, L.L.C., No. 12-20256 (5th Cir. April 9, 2013).

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Plaintiff Melodrama Publishing, LLC and defendant Danielle Santiago entered into two contracts for Santiago to write the first two novels about the character “Cartier Cartel.” The novels were to be written under the pen name “Nisa Santiago” and it doesn’t appear that either party used the name before. Santiago only partially completed the novels, the contracts were terminated, and Santiago paid back the advance. Melodrama went ahead with the books with a different ghost writer, ultimately publishing five books under the author’s name “Nisa Santiago.”

In 2011 Santiago sued Melodrama for copyright infringement but the complaint was dismissed. The day Melodrama filed its motion to dismiss, Santiago filed an application to register the trademark “Nisa Santiago.” (I’m attributing actions here to Santiago, however the acts were actually performed by her lawyer. The court couldn’t figure out who the decisionmaker was, Santiago or her lawyer.) She used the Melodrama book covers for books she did not write as the specimens proving her use of the trademark. She then threatened Melodrama with trademark infringement. Melodrama filed a declaratory judgment action against Santiago.

That Santiago didn’t have trademark rights in “Nisa Santiago” was a slam-dunk, since she admitted in her answer that she never used the mark in commerce. You be the judge whether there was fraud; as we know, lay people and non-trademark lawyers don’t understand the legal standards for things like “use in commerce.” So decide for yourselves whether the behavior crossed the line from naive to fraudulent. And feel free to discuss below.

So the court didn’t have to decide who owned the pen name “Nisa Santiago,” only the trademark. When reading the case I assumed that the publisher would own the name — certainly in the case of serial potboilers the publisher will want to use the same pen name for all authors.

But the contracts tell a different story. First, we have the introductory paragraph:

It says “… Danielle Santiago using pseudo [sic] Nisa Santiago (the “Author”) …” Thus, the contract defines “Nisa Santiago” as the pseudonym for Santiago, not the name under which the book will be published. This ownership is ratified later:

“… The Author shall not publish in his [sic] name or pseudonym … any book of the same or similar subject matter …”  The contract continues:

“Publisher shall have the right to use the name, pseudonym, portrait and picture of and biographical material concerning Author in and on the work …”

Ah, acknowledgement that Melodrama needs permission to use the pseudonym and a place for Santiago to hang her hat — the contract was terminated, thus Melodrama no longer had the right to use Santiago’s pseudonym.

So we have a theory, but it’s a contract theory, not a trademark theory. And under a contract theory, there’s no case for damages. Santiago hadn’t used the name before, so it had no value before it was used by Melodrama. De minimis non curat lex.

But more interesting to me, shouldn’t a publisher have this buttoned up better? When hiring an author to write a series of books under a pen name, isn’t it fairly foreseeable that the ghostwriter might change but the “author’s” name should remain the same? This case would have been very different if Santiago had published the first two books as originally contemplated, because then the hold-up would have worked. Santiago would have had use of the mark and a contract backing up that she, not Melodrama, was the owner. Is this how these contracts are normally written?

Melodrama Publishing, LLC v. Santiago, No. 12 Civ. 7830 (JSR) (S.D.N.Y. April 10, 2013).

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But the article tells the story of a hat, this hat:

The hat is worn in one episode of Firefly, a show that aired on the Fox network for one season in 2002. Well, not even one full season, only 11 of 14 episodes were aired in the United States when the series first ran. The hat was worn in the 14th episode, seen only later by those enthusiastic enough to buy the DVD or catch it on reruns. It’s called “Jayne’s hat” because the character wearing the hat is named Jayne.

But Firefly has a huge fan base and one thing the fans did was adopt the hat to express their affection for the show:

(photo by statelyenglishamanor, CC BY-NC-ND 2.0)

For years the hats were handmade, with an Etsy industry around the hats. All was well and good until ten years after the show was cancelled, when Fox apparently decided there was money to be made. It licensed the manufacture of hats and threatened the fans making the hats.

Let’s look at the possible legal bases for the claim. First, there’s no copyright in the hat. It’s a “useful article,” which means that the copyright extends only to “pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.” 17 U.S.C. § 101. There are no ornamental features of this hat that are original enough for copyright protection: it’s a standard design for a knitted hat, with standard ear-flaps, a standard pom-pom and standard stripes. So, no copyright.

Second, it’s probably not about the name “Jayne’s hat.” While a character name can be a trademark, like “The Hulk,” it doesn’t look like Fox has used “Jayne” with promotional merchandise in a way that gives it trademark rights in the name, nor does Fox own any trademark registrations for “Jayne.” And even if Fox had trademark rights in the name Jayne, arguably the word “Jayne” in “Jayne’s hat” is used in reference the character, like describing something as “Mickey Mouse ears.” Using it that way would not be infringing—pick your flavor of a nominative fair use doctrine or non-infringement analysis.

But, there is one more trademark question. The hat, in fact, symbolizes the show—that’s the very reason people wear it, to express their affection for the show. And in the United States, apparel worn by fans bearing a trademark must be made under license from the trademark owner.

Normally what’s licensed is an identifier that the team or musical group itself adopted, like a logo. But that’s not the limit: from LSU v. Smack Apparel Co. we know that a school’s team colors alone will symbolize the school, meaning that the sale of apparel with just the school colors, without name or logo, can be a trademark infringement. Even more recently, The Trademark Trial and Appeal Board found that the New York Yankees have trademark rights in “the Evil Empire,” even though the team didn’t adopt the phrase for itself and hadn’t registered it—because everyone knows who we’re talking about when we say the “Evil Empire.”

So we’ve reached full circularity in trademark law: fans adopt a symbol, their adoption reinforces the link between the symbol and the product, making the symbol a trademark which gives the owner enforceable rights, and the owner then proceeds to enforce them against the population that created the rights in the first place, it’s biggest fans.

The open source world has a similar dynamic, only it’s called “a community.” The difference is in the last step—there is no attack on the very group of people who created the thing of value, the code. Instead, the community welcomes everyone, knowing that everyone benefits, grows and becomes more passionate when they share a common interest.

Fox had a community most companies would kill for. But rather than embracing and fostering this passionate community, Fox took the short view. In knee-jerk fashion it exercised legal rights of questionable merit, acting autocratically and failing to recognize that it had something infinitely more valuable, the allegiance of a passionate community.

How much damage has Fox created—absolutely needlessly—because it didn’t try to find a way to embrace its community without alienating it? Fox took this great gift, a community, and sacrificed it for a few dollars. Instead, it could have had more of both, simply by thinking of itself as part of the community, not above it.

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In accordance with these principles, we have recognized that unless there is an agreement to the contrary, an employer does not have rights in an invention “which is the original conception of the employee alone.” Dubilier Condenser Corp., 289 U. S., at 189. Such an invention “remains the property of him who conceived it.” Ibid. In most circumstances, an inventor must expressly grant his rights in an invention to his employer if the employer is to obtain those rights. See id., at 187 (“The respective rights and obligations of employer and employee, touching an invention conceived by the latter, spring from the contract of employment”).

Consistent with that principle, not too long ago I reported on Informatics Applications Group, Inc. v. Shkolnikov, No. 1:11cv726 (JCC/JFA) (Oct. 11, 2011 E.D. Va.), where the plaintiff sought to have its employee added as inventor to the defendant’s patent. The Informatics court held that, since the employer had nothing to gain if the employee was added, i.e., there was no duty on the employee’s part to thereafter assign the patent to the employer, the employer didn’t have standing for a claim for correction of inventorship.

But the District Court for the Eastern District of California has added a new wrinkle. It’s held that where the employing company is the alter ego of the inventor, the employing company has standing to sue for correction of inventorship to add the inventor’s name to the patent, with no mention of the need for an assignment or any kind of writing.

How did it get there?

The answer is LeFiell v. United States, 162 Ct. Cl. 865 (1963), a decision that the Court of Appeals for the Federal Circuit holds as precedential. See S. Corp. v. United States, 690 F.2d 1368, 1370 (Fed. Cir. 1982) (en banc) (adopting the holdings of the Court of Claims and the Court of Customs and Patent Appeals as precedential). LeFiell held

where the inventor is “more than a mere employee” and “occupie(s) such a relation to the corporation that he (is) its alter ego, in such a capacity that it is only consistent with good faith that he should recognize its ownership of the patent issued to him”, the entire right and interest in the patent—and not merely a shop right—belong to the company despite absence of a specific contract by the inventor to assign the invention. Dowse v. Federal Rubber Co., 254 Fed. 308, 310 (N.D. Ill. 1918).

Which brings us to the present case, Gerawn Farming, Inc. v. Rehrig Pacific Co. Rehrig Pacific is a manufacturer of pastic-molded containers for industrial use. A marketing representative for Rehrig was researching and marketing a container for storing and transporting grapes, the “Grape Lug.” While the container was in development, the rep spoke with Ray Gerawan of plaintiff Gerawan Farming about the containers. It doesn’t look like this particular container was the source of the main conflict between the two parties, something called the “Harvest Tote” was, but it did provide federal jurisdiction for the suit.

Gerawan Farming filed a claim for correction of inventorship, claiming that Ray Gerawan should be added as inventor for the patent to the Grape Lug. Rehrig Pacific responded that Gerawan Farming didn’t have standing to bring a claim for correction of inventorship, since it wouldn’t own the patent even if inventorship was corrected.

But the court held that under the alter ego theory of LeFiell, Gerawan Farming did have standing.

In this case, a trier of fact could reasonably conclude that Mr. Gerawan was the alter ego of Gerawan from 1993 to 1994, the time frame when the Grape Lug was allegedly invented. Critically, during this time frame Mr. Gerawan was the most senior officer at Gerawan, a company owned by his family. He was also one of its directors. There is some uncertainty as to how much actual managerial control Mr. Gerawan exercised, but there is evidence from which a trier of fact could conclude that Mr. Gerawan had primary responsibility for product development at the company, which included the designing of harvest containers. Moreover, Mr. Gerawan believed that his work, and any inventions derived therefrom, belonged to the company. In fact, the company, not Mr. Gerawan, received all the royalty payments generated from his work on the Harvest Tote.

Because a trier of fact could reasonably conclude that Mr. Gerawan was the alter ego of the company, the Court cannot rule as a matter of law that Plaintiff does not have an expected ownership interest in the ’293 Patent. Accordingly, Defendant is not entitled to summary adjudication on the basis that Plaintiff lacks standing.

Rehrig Farming cited to the far more recent Stanford v. Roche , but it didn’t carry the day. The Gerwan Farming court noted that “Defendant has not provided, nor has the Court independently found, any cases showing that LeFiell is no longer good law.” Indeed, the Court of Appeals for the Federal Circuit is the only court that can ratify, clarify or reverse LeFiell, which I expect we will ultimately see.

Gerawn Farming, Inc. v. Rehrig Pacific Co., No. 1:11-cv-01273 LJO BAM (N.D. Calif. Apr. 8, 2013).

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Defendant Deep claimed to own the copyright in the “Aimster” software of yore. He accused plaintiff XAC, LLC, a subsidiary of Xerox, of copyright infringement. Deep had three different theories for why he owned the copyright in the software, one of which was that he was the owner by assignment. BuddyUSA was the original copyright owner (at least for purposes of this particular argument), and Deep, acting as President of BuddyUSA, assigned the copyright to himself personally in an agreement signed on March 20, 2009.

The problem was that BuddyUSA had filed for bankruptcy in March, 2002. Plaintiff XAC pointed out that the software was part of the estate and could only be assigned by the trustee, not by Deep personally. Deep responded that the written document was simply ratification of an agreement entered into before the bankruptcy and was therefore valid. The court agreed with XAC:

Clearly, under Second Circuit precedent, an oral agreement that is subsequently memorialized in writing can cure a standing defect. However, the party purporting to transfer its rights under a written agreement cannot effect such a transfer unless it has the authority to do so. Mr. Deep has not come forward with any evidence to show that, at the time that BuddyUSA signed the Master Agreement, it had the requisite authority. Certainly, there is no evidence that either the Trustee or the Bankruptcy Court approved such a transfer and without that approval, the transfer is invalid; a point that Mr. Deep does not dispute. Without evidence that BuddyUSA validly transferred its ownership of the copyright in the Protected Software to Mr. Deep, the only reasonable conclusion that the Court can draw, based on the undisputed facts in the record, is that Mr. Deep is not the owner of the copyright in the Protected Software and, therefore, he does not have standing to bring a claim for copyright infringement.

Summary judgment granted to XAC.

XAC, LLC v . Deep, No. 1:07-CV-135 (FJS/RFT) (N.D.N.Y. Oct. 10, 2011)

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Section 256 of the Patent Act provides that a court can correct the inventorship on an issued patent. However, a person claiming inventorship only has standing to ask for correction under the rules generally applied for constitutional standing, i.e., (1) an actual or imminent, concrete injury in fact; (2) a causal relationship between the injury and the conduct complained of; and (3) that the injury is capable of being redressed by a decision of the court.

In the leading case from the Federal Circuit on correcting inventorship, Chou v. University of Chicago, 254 F.3d 1347 (Fed. Cir. 2001), the court held that the inventor didn’t necessarily have to end up owning the patent to have standing for a claim, but rather only gain some benefit. In Chou’s case, she would be entitled to royalties and other financial benefit from the university if named as an inventor, which was good enough.

Chou also suggested that, under the right circumstances, reputational interest might be enough. In Shukh, Alexander Shukh claimed that he should have been named as inventor on six patent applications that Seagate filed. Shukh was a former employee who had assigned his rights to Seagate, so even if named as an inventor he would not own the patents or have any financial benefit. Therefore, all he could argue was reputational interest, but he failed at his proof.

First,

Shukh’s own deposition testimony reflects … that his reputation as a leading scientist in his field and an extremely successful inventor was not damaged as a result of Seagate’s omission of Shukh as an inventor on six patents. Shukh stated repeatedly in his deposition that his reputation for “honesty, good organization, openness and straightforwardness and communications, good technical abilities, innovation and extreme competitiveness did not change from 2002 until [2012].”

Shukh received a performance review that he was antagonistic to his employer and coworkers regarding ownership of patents, and claimed that this was a reputational harm. The problem was that this injury wasn’t redressable. More to the point perhaps, he received the review before he discovered that he was omitted as an inventor:

Therefore, Shukh’s reputation was not damaged because he tried to vindicate his right to be named as an inventor on the six disputed patents. Shukh’s reputation for insisting on appropriate credit and accusing others of plagiarism documented in the August 2007 performance review was established prior to the dispute over the six patents, and cannot have been a product of seeking to correct inventorship on those patents or a product of the fact that he was omitted from the patents.

(Emphasis in original.)

Shukh submitted 135 applications for other jobs after he was let go from Seagate but failed to get another job. Shukh didn’t offer any evidence that this was because of the lack of inventorship on patents, though. In theory it could: “for example, Shukh has presented no evidence that any of the jobs he applied for required unique technical skills that Shukh could have demonstrated through named inventorship on the six disputed patents.” Rather, Shukh claimed that his failure to gain employment was from being blacklisted, a theory unrelated to inventorship.

Finally, Shukh claimed that a reduced number of patents on which he was inventor would affect his reputation, but again failed at the proof. In theory that might be the case, but Shukh was a named inventor on at least 35 patents and hadn’t shown that 6 more would change his reputation.

So reputational harm can support a claim for correction of inventorship, but there just wasn’t adequate evidence in this case and the claim was dismissed.

Shukh v. Seagate Technology, Inc., No. 10-404 (JRT/JJK) (D. Minn. March 24, 2013).

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