Future Tense in Contractual Language Found Insufficient to Convey Title, Depriving Party of Right to License Patent | Akin Gump Strauss Hauer & Feld LLP

Applying latest Federal Circuit precedent necessitating language evincing a present conveyance of patent rights, a district courtroom in the Western District of Pennsylvania uncovered that the contractual language “shall turn out to be the assets of” did not constitute a patent assignment and did not confer a third celebration the right to license the patent.

Plaintiff Lambeth Magnetic Buildings, LLC (LMS) filed a patent infringement lawsuit from Defendants Seagate Technology (US) Holdings, Inc. and Seagate Technological innovation LLC (collectively, “Seagate”). Seagate submitted affirmative defenses, like deficiency of standing and convey license. LMS subsequently moved for summary judgment with regard to all those defenses on the basis that U.S. Patent No. 7,128,988 (the “ʼ988 Patent”) was assigned to LMS and not Carnegie Mellon College (CMU). LMS argued that it had standing to sue as the owner of the ‘988 Patent and that CMU could not have granted a license to Seagate due to the fact it never ever owned the ‘988 Patent. The court disagreed and denied LMS’s movement for summary judgment. The court docket observed that the terms in an mental property policy and sponsorship agreement—which offered that mental home “shall be owned” or “shall turn out to be the house of” the university—constituted a present assignment of the ‘988 Patent to CMU.

Subsequently, the Federal Circuit in Omni MedSci v. Apple Inc. issued a conclusion with regards to no matter if an assignee of patents had standing to sue in view of an mental residence plan made up of comparable conditions. 7 F.4th 1148 (Fed. Cir. 2021). The Federal Circuit in Omni MedSci concluded that the language “shall be the house of” did not amount of money to a existing assignment mainly because the “absence of an energetic verbal expression of current execution is a substantive indication that a current computerized assignment [is] not supposed.” Id. at 1156. And, therefore, the Federal Circuit affirmed the district court’s denial of Apple’s movement to dismiss for lack of standing.

For the reason that such contractual language in Omni MedSci did not make an automatic present assignment, LMS submitted a motion for reconsideration of the district court’s initial summary judgment ruling. In mild of this managing Federal Circuit precedent, the district court granted that movement and held that LMS was entitled to summary judgment on Seagate’s affirmative defenses. In accordance to the court, like in Omni MedSci, the contractual language with CMU lacked an lively verbal expression of present execution, and therefore did not consequence in an automated assignment therefore, the court concluded that CMU could not have certified the ‘988 Patent to Seagate.

Practice Tip: Some parties routinely rely on mental property agreements and policies when creating new solutions and technologies. If those people functions are trying to get to quickly assign possession of innovations, they must keep away from agreements using passive verbs in indefinite or upcoming tenses, these kinds of as “shall be the home of.” Relatively, they should really use current tense words and phrases of execution to point out a current assignment and a distinct grant of mental house legal rights.

Lambeth Magnetic Buildings, LLC v. Seagate Technology (US) Holdings, Inc. et al, Circumstance No. 2-16-cv-00538 (WDPA Mar. 14, 2022)