U.S. Patent Nos. 7,056,866 and 7,709,418 cover specialized superconducting materials that were developed by a physics research laboratory at the University of Houston in 1986 and 1987. The physics professor in charge of the laboratory and overseeing the research on superconducting materials was Ching-Wu Chu (“Chu”). Pei-Herng Hor (“Hor”) was a graduate student and Chu’s assistant in this research. Ruling Meng (“Meng”) was an independent materials scientist who worked with Chu and Hor at the research laboratory.
The patent applications that ultimately gave rise to the ‘866 patent and the ‘418 patent were filed in 1987 and 1989 respectively, and in both applications Chu was named as the sole inventor. The ‘866 patent issued in 2006 and the ‘418 patent issued in 2010. According the findings of fact made by the District Court, both Hor and Meng knew or should have known prior to issuance of either patent that they were not named as inventors in either patent application. In 2008, Hor sued Chu under 35 U.S.C. §256 asserting a claim for correction of inventorship on both patents, and Meng later intervened to join Hor’s suit to also assert inventorship.
The District Court granted Chu’s motion for summary judgment on the grounds that the §256 correction of inventorship claims were barred by laches because Hor and Meng waited too long to assert their claims despite their actual or constructive knowledge that they were omitted from both patents. Further, and for the same reason, the District Court sua sponte found that the inventorship claims were alternatively barred by equitable estoppel.
35 U.S.C. §256 creates a cause of action for omitted inventors to obtain a court order requiring the U.S. Patent Office to correct any patent that issues without naming all inventors: “Whenever through error a person ... is not named in an issued patent and such error arose without any deceptive intention on his part, the [Patent Office] Director may ... issue a certificate correcting such error.” By the plain language of the statute, only issued patents may be corrected using this procedure, and a rebuttable presumption of laches arises if the omitted inventor fails to make a claim under §256 within six years of actual or constructive knowledge of the issuance of the patent. Advanced Cardiovascular Sys. v. SciMed Life Sys., 988 F.2d 1157, 1163 (Fed. Cir. 1993).
For pending patent applications that have not yet issued, by contrast, omitted inventors have two different options for correcting inventorship and need not resort to the judicial system. If the omission of the inventor was made in error without any deceptive intent, and if all concerned parties consent, inventorship of a pending patent application may be corrected by filing a Rule 48 request to correct inventorship with the Patent Office pursuant to 35 U.S.C. §116. If all parties do not consent to adding an omitted inventor to a pending patent application, then the aggrieved inventor must file a patent application with a claim identical to a claim in the application from which the inventor was omitted in order to provoke an interference proceeding under 35 U.S.C. §102(g). [Note: this procedure will be replaced after March 16, 2013 by derivation proceedings under 35 U.S.C. §135 created by the America Invents Act].
Federal Circuit Decision
The Federal Circuit reversed the District Court’s holding that the plaintiff’s claims were barred by both laches and equitable estoppel. Hor and Meng filed their claims under §256 less than six years after the patents issued, but the District Court nonetheless found a presumption of laches by allowing the time window for laches to open when the plaintiffs first learned of their omission while the patent applications were still pending. The Federal Circuit concluded the District Court erred in this finding because, according to the plain language of the statute, a claim under §256 cannot arise until the patent issues. It is therefore impermissible to take into consideration any amount of time the omitted inventors in fact knew of their omission while the applications were pending.
The District Court also supported its holding of laches and equitable estoppel by noting that, regardless of the §256 procedures, the omitted inventors had the opportunity to seek correction of inventorship while the applications were still pending by filing a request under Rule 48 or by provoking an interference. The District Court reasoned that the omitted inventors’ failure to avail themselves of these opportunities should have started the six year laches period. The Federal Circuit, however, found these facts to be irrelevant to the claims under §256 because nothing in the plain language of §256 requires the omitted inventors to seek correction of inventorship while the patent application is pending.
Further, the Rule 48 request is often not available to omitted inventors because it requires consent of all concerned parties. Where, as here, the named inventors do not agree that the omitted inventors should be included, the Rule 48 request is not available to the aggrieved inventors. For at least those reasons the Federal Circuit concluded that failure to seek pre-grant correction of inventorship should not prejudice an omitted inventor’s ability to seek post-grant correction of inventorship under §256.
Although the holding of this case is a straight-forward application of the plain language of §256 to the facts, Judge Reyna penned a concurring opinion calling for Congress to change law. Judge Reyna pointed out that the court’s decision and the current law incentivize omitted inventors to sit on their hands during prosecution and even after patent issuance. Rather than bear any burden of the costs of prosecution while the application is pending, or the costs of negotiating assignments or license agreements after the patent issues, the omitted inventor may instead sit back and watch from the sidelines. If the patent application issues and turns out to be a valuable patent, the omitted inventor can then file a §256 claim within six years and cash in on the work of others.
Because the Patent Office is ideally situated to address inventorship errors while the application is still pending, without requiring resort to the judicial system, Judge Reyna argued that the law should require omitted inventors to seek correction of inventorship before the patent issues (if the omitted inventor knows or should have known of the omission). Although Congress may have grown weary of crafting arcane patent laws after finally passing the America Invents Act, this case is a good example of an inappropriate loophole in current law that should be addressed.