A recent decision by the Court of Appeals for the Federal Circuit, the second highest appellate court for patent cases in the United States, demonstrates the difference between inventorship and ownership ... again. The case, titled Sionyx, LLC v. Hamamatsu, considered various issues arising from a collaboration between a Harvard University professor and a Japanese company concerning the development of a process for creating “black silicon” through the irradiation of a silicon surface with ultra-short laser pulse.
The court considered several issues relating to a breach of a nondisclosure agreement, infringement of a U.S. patent, and the ownership of U.S. patents and foreign patents. In a decision issued on Dec. 7, 2020, the court held that the district court properly awarded eight disputed U.S. patents to the company that was formed by the Harvard professor.
The court determined that the Harvard professor should have been named as a co-inventor on the disputed U.S. patents because confidential information that he provided under the terms of the nondisclosure agreement represented a contribution to the inventions that were covered by the patents. Then, the court concluded that, under the terms of that agreement, ownership of the patents should have been assigned to the Harvard professor’s company.
The Japanese company argued that its employees necessarily contributed to conception of the invention, so that the Japanese company should be a joint owner of the patents. The court rejected that argument, noting that the award was an appropriate equitable remedy, and reasoned, as follows:
“It is elementary that inventorship and ownership are separate issues,” Beech Aircraft Corp. v. EDO Corp., 990 F.2d 1237, 1248 (Fed. Cir. 1993), and while conception is the touchstone of inventorship, ownership operates based on contract or law—in this case, the NDA. Corporations are not inventors, but they derive ownership rights through contracts, usually with employees, or provisions of law. Thus, while [the Japanese company] employees may be co-inventors, and their rights transferred to their employer, [the Japanese company], [the Japanese company] is the contracting party in the NDA, and the NDA provides that ownership of patents arising from confidential information exchanged under the agreement is claimed by the disclosing party. But [the Japanese company] has not established that any of the patents arose from confidential information disclosed under the agreement and therefore has failed to show that it is entitled to joint ownership.
Id., slip op. at 19.
The court also held that the district court had the authority to assign the ownership of various disputed foreign patents to the Harvard professor’s company.