Federal Circuit Ruling Underscores Importance Of Clear And Present Assignments Of Patent Right

Published date10 August 2021
Subject MatterIntellectual Property, Patent
Law FirmArnold & Porter
AuthorMs Vinita Kailasanath and Ryan Tanny Kang

On August 2, 2021, in Omni Medsci, Inc. v. Apple Inc.,1 the Federal Circuit issued an opinion highlighting the importance of clear and unambiguous language in contractual provisions, policies and bylaws relating to assignment of patent rights. In the opinion, the Federal Circuit resolved an interlocutory appeal on the issue of whether Apple's motion to dismiss for lack of standing on the part of Omni was improperly denied by the District Court for the Eastern District of Texas.2 Apple originally filed its motion to dismiss claiming that Omni lacked standing to file infringement claims against it (for patented technology allegedly used in the Apple Watch3), because the patent rights Omni claimed had been automatically assigned to the University of Michigan (UM) by virtue of the patent inventor's employment agreement with UM, and were therefore actually owned by UM rather than Omni.4 The majority of the panel, Judges Linn and Chen, affirmed the District Court's denial of Apple's motion and held that the patent inventor's employment agreement did not clearly effectuate a present assignment of patent rights to UM.5 Judge Newman dissented, arguing that the ruling was incorrect as a matter of contract interpretation and overturned long standing UM practice.6

Background

In 2011, Dr. Mohammed Islam, a tenured professor of electrical and computer engineering at UM received an additional appointment to UM's medical school, for which he executed an employment agreement.7 The agreement documented Dr. Islam's commitment to abide by UM's bylaws, including UM Bylaw 3.10 regarding assignments of property rights to faculty. Paragraph 1 of Bylaw 3.10 stated: "1) Patents and copyrights issued or acquired as a result of or in connection with administration, research, or other educational activities conducted by members of the University staff and supported directly or indirectly (e.g., through the use of University resources or facilities) by funds administered by the University regardless of the source of such funds, and all royalties or other revenues derived therefrom shall be the property of the University"8 (emphasis added).

In 2012, Dr. Islam took an unpaid leave-of-absence during which he filed multiple provisional patent applications. After returning to UM in 2013, he filed non-provisional applications claiming priority to those provisional applications. After the patents issued, Dr. Islam assigned the patent rights to Omni on December 17, 2013.9

In 2018, Omni sued...

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