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Misani v. Ortho Pharmaceutical Corp.

Decided: March 11, 1964.

FERNANDA MISANI, PLAINTIFF-APPELLANT,
v.
ORTHO PHARMACEUTICAL CORP., A NEW JERSEY CORPORATION, ET AL., DEFENDANTS-RESPONDENTS



Conford, Freund and Sullivan. The opinion of the court was delivered by Conford, S.j.a.d.

Conford

Plaintiff, formerly employed by defendant Ortho Pharmaceutical Corp. as a research chemist, brought this action for damages by reason of Ortho's designation of a different person as "inventor" in its application for a patent which eventually was issued to it on a pharmaceutical compound, the idea, manufacturing process and novel use of which were allegedly discovered by plaintiff. The gravamen of the suit is that defendant's action thereby deprived plaintiff of professional credit for the invention. The complaint and pretrial order also assert injury to plaintiff's alleged property rights in the invention by improper and deficient preparation and prosecution of the patent application. Joined as defendants in the action were one Oroshnik, plaintiff's direct superior at Ortho, who was designated as inventor in the patent afore-mentioned, and certain other supervisory employees of the company, as well as Ortho's parent corporation, Johnson & Johnson, and its board chairman, Robert W. Johnson, who were charged to have participated in the alleged wrongful acts through a Dr. Kell, patent attorney for Johnson & Johnson.

Defendants denied the allegations of the complaint, asserted that Oroshnik, not plaintiff, invented the compound, and contended that plaintiff had assigned her property rights in the patent to Ortho and that her asserted right of credit was valueless in any event because the patent itself was invalid.

The action was tried before a judge and jury in the Law Division. Plaintiff, not a lawyer, tried her case pro se. At the close of plaintiff's case there was a dismissal by the court for lack of proof as to the defendants other than Oroshnik, Ortho and Johnson & Johnson. There is no demonstration of error on this appeal in that action, and it is herewith affirmed. The jury returned a verdict of no cause of action as to the defendants who remained in the case. Plaintiff's appeal advances numerous claims of error in rulings on proffered evidence, determinations of law during the proceedings, errors and deficiencies in the charge to the jury, and prejudicial conduct of the judge in trial of the case.

Preliminarily, note should be taken of the fact that plaintiff was unsuccessful in a prior action against the same defendants, claiming, inter alia , wrongful discharge from her employment with Ortho. We heretofore affirmed a judgment for defendants in that case, which was tried by a Law Division judge sitting without a jury, wherein it was held that the employment contract was at will, terminable by either party with or without cause. Misani v. Ortho Pharmaceutical Corp. (unreported, App. Div. , May 18, 1962), certification denied 38 N.J. 304 (1962).

Plaintiff, who is holder of a doctorate in organic chemistry, was employed by Ortho in January 1955 after she responded to an Ortho advertisement seeking an organic chemist to perform "research in synthetic medicinal chemistry" of "basic character." The following month she executed an agreement with Ortho providing in part as follows:

"FERNANDA MISANI FIORDALISI

(hereinafter called 'Employee'), in consideration of his employment, and of wages and salary paid, hereby assigns, and agrees to assign to

ORTHO PHARMACEUTICAL CORPORATION

(hereinafter called 'Company'), or its nominee, their successors or assigns, all his rights in inventions improvements and ideas which during the period of his employment, he has made or conceived or may make or conceive, either solely or jointly with others, in the course of his employment, or in the Company's time, or with the Company's material or facilities, or relating to any subject matter

with which his work for the Company is or may be concerned, or relating to any business in which the Company or any of its subsidiary or affiliated companies is involved. * * *"

Plaintiff gave testimony at the trial of the following general import. Before joining Ortho she had had experience in the preparation and synthesizing of barbiturates, among other therapeutic compounds. Specifically, she had worked with 4-4 dissubstituted pyrazolones (the substance of the compound in dispute) and she had a number of scientific patents and publications to her credit. About July 1955 she began to use her spare time at Ortho in research on a problem which had long defied organic chemists although considerable work had been done on it -- the making of a substance which would contain the beneficial qualities of barbiturates but not their undesirable toxic and habituating characteristics. It is her contention in this case that she succeeded at Ortho in doing so, and that the patent issued to Ortho by the U.S. Patent Office on March 17, 1959 in the name of William Oroshnik as inventor (No. 2,878,263), claiming the compound, "4-methyl-4 phenyl-5-pyrazolone," resulted from her discovery of that compound and her invention of the process of making it, also disclosed in the patent but not claimed therein independently of the compound.

Plaintiff testified that Oroshnik discouraged her efforts on the barbiturate project, but she persisted. She offered in evidence notebook entries indicating preliminary unsuccessful experiments. On January 26, 1956, at a company seminar at which Oroshnik was present, as indicated by one of her working notebooks introduced in evidence, plaintiff disclosed the idea and the process for making the compound to those in attendance. Plaintiff explained in her testimony that the novelty of the process lay in the use of an acid in the final step of the production of an intermediate. She had made a search of the literature and testified it showed no "well known" process for making the intermediate at all.

Oroshnik, also a skilled research chemist, told quite a different story on the stand. He testified that at the time of

plaintiff's employment at Ortho he was trying to create an anti-convulsant which would be an improvement over one then on the market. He stated that this field was one of his specialties. He directed plaintiff to salvage a common intermediate from an unsuccessful uracil project and combine it with hydrazine. She did this, and arrived at the yield of the pyrazolone compound which he was after -- the subject matter of the patent. Although she worked out the details of the process, this was what he would expect of any senior chemist functioning under his direction and possessing basic chemical know-how.

Oroshnik also testified that some time after the termination of plaintiff's association with Ortho some 40 or 50 compounds, including that here in question, were sent to Dr. Kell, a Johnson & Johnson patent attorney and chemist who handled patent matters for Ortho as well. Oroshnik told Kell he conceived the idea for the pyrazolone compound and had directed plaintiff to make it, but he did not tell Kell he was the inventor of the compound or process. Kell testified that Oroshnik told him these facts and that he, Kell, then concluded that Oroshnik was the inventor and arranged for the patenting of the compound.

A patent expert, McLean, testified on behalf of defendants that the patent was invalid because the formula of the compound was anticipated by a reference in Beilstein , a German chemical encyclopedia. He also undertook to refute plaintiff's position to the effect that if the patent claim on the compound was invalid, the process of manufacture was nevertheless novel and patentable independently, and that the patent claim could be validated also by amending it in the form of a claim for a method of treating convulsions by use of the compound. (We discuss the legal merits of these contentions infra.) McLean said the process of manufacture was neither novel nor patentable, citing a number of supposedly supporting German publications which defendants offered in evidence (untranslated). McLean also gave the opinion that the suggested amendment of the patent claim as

one for a proposed use for treatment of convulsions would not render it valid.

At the trial plaintiff also offered evidence of Ortho's attempt to secure a Canadian patent on the process, as an admission against its position in this case, notwithstanding Ortho later withdrew it. She complains of the refusal of the trial judge to charge on the point. She also claims error in the court's refusal to allow in evidence a United States patent examiner's communication to her on a later application of her own to secure a patent on the process for the pyrazolone compound.

A previous interference proceeding brought in the United States Patent Office by plaintiff in relation to the Ortho patent based on her alleged priority in invention as against Oroshnik was dissolved by the agency on its own motion on the ground that the compound was not patentable by reason of anticipation by the Beilstein reference and the effect of 35 U.S.C.A. § 102, which precludes a patent where the invention has been patented or described in a printed publication in any country more than one year prior to the date of the application for patent in the United States.

I.

One of plaintiff's principal appellate contentions is that the trial judge erred in ruling, early in the case, that ownership of the invention or inventions here involved, as distinguished from any right of plaintiff to professional credit for them, vested in Ortho absolutely by virtue of the assignment agreement executed by plaintiff quoted above, and that consequently the company was free to use or discard these discoveries or to patent them or scrap them, wholly or partly, at its unfettered will. We think the broad language of the contract, fairly construed, clearly requires this construction. Compare Vargas v. Esquire, Inc. , 164 F.2d 522 (7 Cir. 1947). Plaintiff contends, alternatively, that the assignment agreement is unenforceable as inequitable because

the contract of hire was for no fixed term. Where, as here, an employee is engaged for purposes of research and invention, it is generally held that an assignment agreement by the employee of the tenor of that here involved will be upheld and enforced. Patent & Licensing Corp. v. Olsen , 188 F.2d 522 (2 Cir. 1951); Paley v. DuPont Rayon Co. , 71 F.2d 856 (7 Cir. 1934); Annotation, 153 A.L.R. 983, 998 (1944). It makes no difference that the agreement of hiring is not for any fixed term. Goodyear Tire & Rubber Co. v. Miller , 22 F.2d 353 (9 Cir. 1927), reversing the lower court decision relied upon by plaintiff, reported in 14 F.2d 776 (S.D. Cal. 1926). But see Triumph Electric Co. v. Thullen , 228 F. 762 (E.D. Pa. 1916), affirmed on a narrower ground in 235 F. 74 (3 Cir. 1916).

Even apart from the express agreement of assignment, however, the invention became the property of Ortho as a matter of law, since it is indubitable that "the inventor was engaged specifically to exercise [her] inventive faculties for the employer's benefit," and the specific idea and process here assertedly conceived by plaintiff were undeniably developed while at work for Ortho. Kinkade v. New York Shipbuilding Corp. , 21 N.J. 362, 369 (1956); International Pulverizing Corp. v. Kidwell , 7 N.J. Super. 345 (Ch. Div. 1950); Standard Parts Co. v. Peck , 264 U.S. 52, 44 S. Ct. 239, 68 L. Ed. 560 (1924).

Plaintiff also argues that enforcement of the contract against her is improper because she was wrongfully discharged. But this contention is barred by the decision of the previous case against her on that point. The issue is res judicata.

Plaintiff's further contention that such enforcement of the contract violates the federal constitutional provision on patents is frivolous.

We consequently hold the view that the trial court was right in ruling that insofar as plaintiff's claim was postulated on the theory that she owned the inventions of the compound or process, or the idea of patenting the use of the compound

as an anti-convulsant, it was groundless. She legally parted with that title anticipatorily when she took the job as a research chemist employed to make such discoveries and when she executed the assignment. Ortho owed her no duty to patent, or refrain from patenting, these inventions or any aspect of them, or, if it did apply for patents, to do so properly or adequately, or to repair any deficiency in the patent issued, by amendment or otherwise.

II.

Defendants have made no serious refutation of the proposition that if plaintiff did legally invent the compound and the process for making it, she possessed a professional right of intellectual credit therefor even though she assigned "all [her] rights" in inventions, ideas, etc., to Ortho, and that a wrongful deprivation of that credit by publishing the formula and process in a patent as the invention of another would constitute an actionable tort. In the present case the patent issued to Ortho in the name of Oroshnik as inventor, although claiming only the compound, also published the process and the idea of treating convulsions with the compound, thereby imputing all to his inventorship. But the trial court, although purporting to submit the issue of credit to the jury, expressed an opinion out of the presence of the jury that there was no such right, and we think it advisable that we lay the question to rest.

We are of the view that such an action lies, at least as respects patentable inventions or discoveries, and that plaintiff did not in any way surrender her rights in that regard.

It is of the essence of the patent law and public policy that a patent must be applied for in the name of the true inventor only, whether issued to him or to his assignee. 35 U.S.C.A. § 102(f); 69 C.J.S. Patents § 84, pp. 377, 378; Kennedy v. Hazelton , 128 U.S. 667, 672, 9 S. Ct. 202, 32 L. Ed. 576 (1888). The recognition of such a cause of action as is presently here under discussion obviously subserves the

stated policy and tends to prevent an imposition upon the public.

Moreover, vindication of the claim to credit on the part of the aggrieved true inventor is readily assimilable to the principle of an action for interference with prospective economic advantage now thoroughly established in our law. Mayflower Industries v. Thor Corp. , 15 N.J. Super. 337 (Ch. Div. 1951), affirmed o.b. 9 N.J. 605 (1952). As succinctly summarized recently by the Chief Justice, "The law protects also a man's interest in reasonable expectations of economic advantage." Harris v. Perl , 41 N.J. 455, 462 (1964).

Notwithstanding the fact that the area of direct economic exploitation of the invention itself has by the relationship of the parties and their agreement been appropriated exclusively unto Ortho, nevertheless plaintiff, if the true inventor, retained the valuable right of accretion to her reputation as a research scientist in organic chemistry of credit for the invention if any patent should be issued and published in connection therewith. All contemplated advantages to the company from the plaintiff's assignment of inventions and ideas were fully and reasonably utilizable by it without the need to misrepresent the inventor on a patent application. It would be unreasonable and against public policy to construe the contractual assignment as a consent by plaintiff to an abrogation of her right of credit by means of the false attribution of inventorship ...


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