Future Tense In Contractual Language Found Insufficient To Convey Title, Depriving Party Of Right To License Patent

Published date04 April 2022
Subject MatterIntellectual Property, Patent
Law FirmAkin Gump Strauss Hauer & Feld LLP
AuthorMs Caitlin Olwell and Rubén H. Mu'oz

Applying recent Federal Circuit precedent requiring language evincing a present conveyance of patent rights, a district court in the Western District of Pennsylvania found that the contractual language 'shall become the property of' did not constitute a patent assignment and did not confer a third party the right to license the patent.

Plaintiff Lambeth Magnetic Structures, LLC (LMS) filed a patent infringement lawsuit against Defendants Seagate Technology (US) Holdings, Inc. and Seagate Technology LLC (collectively, 'Seagate'). Seagate filed affirmative defenses, including lack of standing and express license. LMS subsequently moved for summary judgment with respect to those defenses on the basis that U.S. Patent No. 7,128,988 (the 'ʼ988 Patent') was assigned to LMS and not Carnegie Mellon University (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 because it never owned the '988 Patent. The court disagreed and denied LMS's motion for summary judgment. The court found that the terms in an intellectual property policy and sponsorship agreement'which provided that intellectual property 'shall be owned' or 'shall become the property 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 decision regarding whether an assignee of patents had standing to sue in view of an intellectual property policy containing similar terms. 7 F.4th 1148 (Fed. Cir. 2021). The Federal Circuit in Omni MedSci concluded that the language 'shall be the property of' did not amount to a present assignment because the 'absence of an active verbal expression of present execution is a substantive indication that a present automatic assignment [is] not intended.' Id. at...

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