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SIM KAR LIGHTING FIXTURE CO. v. GENLYTE

November 8, 1995

SIM KAR LIGHTING FIXTURE CO., Plaintiff,
v.
GENLYTE, INC., AND RICHARD MOUSHEGIAN, Defendants.



The opinion of the court was delivered by: WALLS

 WALLS, District Judge

 This matter comes before the Court on plaintiff Sim Kar's motions for summary judgment and for dismissal of defendant Richard Moushegian's counterclaim. Also, defendant Genlyte moves to disqualify Sim Kar's trial counsel from trying the issue of inventorship.

 FACTS

 Sim Kar filed suit against Genlyte on October 7, 1991 for patent infringement, claiming that Genlyte misappropriated the socket bar design for a florescent lighting fixture which had been patented by Charles Trowbridge and assigned to Sim Kar -- U.S. patent No. 4,422,132 issued on December 20, 1983. During the course of the litigation, Richard Moushegian, an employee of Sim Kar, was deposed by Genlyte. At his deposition, in January 1993, Moushegian stated that he had invented the patented device at issue while employed by Sim Kar. On March 24, 1994, the Court entered a "Final Pretrial Stipulation and Order," previously submitted by Sim Kar and Genlyte in which Sim Kar asserted that Moushegian was a "coinventor of the '132 patent." Page 9, Para. 6, 7, & 8.

 On June 16, 1995, Sim Kar then filed a Second Amended complaint seeking a Declaratory Judgment that Moushegian is not an inventor of the patent at issue. On July 6, 1995, Moushegian filed an Answer, Affirmative Defenses and Counterclaim in which he affirmatively denied the allegation that Trowbridge, owner of Sim Kar, was the sole inventor and alleged that he was the sole inventor, or at least a coinventor of the patent at issue. Moushegian Answer, Affirmative Defenses and Counterclaims, Para. 12-15 and Counterclaim Para. 94. In his Answer, Affirmative Defenses and Counterclaim, Moushegian accuses Sim Kar and specifically its counsel, Jeffrey A. Schwab and Michael Aschen of the law firm of Ableman, Frayne & Schwab, of harassment, misrepresentation, deception, suborning perjury and other wrongdoings in connection with their dealings with Moushegian to attempt to have him accept Sim Kar's contention regarding Trowbridge's inventorship. See Para. 113-116.

 Moushegian has recently filed an Amended Answer, Affirmative Defenses and Counterclaim. Specifically, Moushegian seeks: 1) a declaratory judgment that he is the sole or a co-inventor and the sole or a co-owner of the '132 patent; 2) to judicially estop Sim Kar and its counsel from denying that Moushegian is an inventor of the '132 patent; 3) to recover damages for Sim Kar's unjust enrichment from exploiting the '132 patent invented and owned by Moushegian; 4) to recover damages for wrongful termination of his employment; 5) to recover damages against Sim Kar, Schwab, Aschen and the Schwab firm for conspiring to terminate his employment wrongfully; and 6) to recover damages for Sim Kar's wrongful termination effectuated through its officers, employees or agents.

 Sim Kar now moves to have Moushegian's counterclaim dismissed.

 Also, Genlyte seeks to have Ableman, Frayne & Schwab dismissed as counsel for Sim Kar, on the grounds that 1) Moushegian's Counterclaims allege wrongdoing on the part of Ableman, Frayne & Schwab thereby necessarily involving them in the action as witnesses, or 2) even if Moushegian's Counterclaims are dismissed, the conduct of Ableman, Frayne & Schwab with respect to Moushegian goes directly to the issue of who the actual inventor of the patent at issue is, which would also require members of the firm to testify at trial.

 DISCUSSION

 I. SIM KAR'S MOTION TO DISMISS MOUSHEGIAN'S COUNTERCLAIM STANDARDS

 A. 12(b)(6)

 Under 12(b)(6) a plaintiff's complaint must be dismissed for failure to state a claim if a defendant demonstrates "beyond a doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). All allegations set forth in the complaint must be accepted as true, see Cruz v. Beto, 405 U.S. 319, 322, 31 L. Ed. 2d 263, 92 S. Ct. 1079 (1972), and all reasonable inferences must be drawn in the plaintiff's favor. Schrob v. Catterson, 948 F.2d 1402, 1405 (3d Cir. 1991. "Courts must be cautious in assessing motions to dismiss, particularly where granting such a motion would terminate the litigation before the parties have had their day in court." Kiser v. General Electric Corp., 831 F.2d 423, 427 (3d Cir. 1987).

 B. Summary Judgment

 Summary judgment may be granted only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56; Celotex Corporation v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). An issue of material fact is 'genuine' "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).

 A. Claim for Declaration of Inventorship

 Sim Kar moves for summary judgment on Moushegian's claim for a declaration, pursuant to 35 U.S.C. § 256, that he was the sole or at least the co-inventor of the '132 patent.

 25 U.S.C. § 256 provides:

 
Whenever through error a person is named in an issued patent as the inventor, or through error an inventor is not named in an issued patent and such error arose without any deceptive intention on his part, the Commissioner may, on application of the parties and assignees, with proof of the facts and such other requirements may be imposed, issue a certificate correcting such error.

 (emphasis added). Thus § 256 enables a patent to be amended when a good faith mistake as to the identity of the actual inventor was made by the party who obtained the patent when it applied for the patent; when there is no allegation of deceptive intent, or deceptive intent has not been proven, a patent can be amended and the validity of the patent will not be affected. Accordingly, Moushegian has filed an Amended Answer, Complaint and Counterclaim, in which he now contends that there was no deceptive intent on the part of Trowbridge when the patent was issued without Moushegian's name listed as an inventor.

 Sim Kar argues that Moushegian's claim for a Declaration of Inventorship should be dismissed because Moushegian can not, as a matter of law, prove that he is an inventor or the sole inventor of the '132 patent. A patent holder enjoys a presumption that the named persons were the inventors, and that presumption may be overcome only upon a showing to the contrary by clear and convincing evidence. Congoleum Industries, Inc. v. Armstrong Cork Co, 339 F. Supp. 1036, aff'd. 510 F.2d 334 (3d Cir.), cert. denied, 421 U.S. 988, 44 L. Ed. 2d 478, 95 S. Ct. 1991 (1972). In Price v. Symsek, 988 F.2d 1187, 1192-94 (Fed. Cir. 1993), the Federal Circuit addressed at length, in the context of a claim of priority of ownership, the evidentiary burden of the clear and convincing standard when an individual seeks to overcome the presumption that the named inventor is not the sole and/or actual inventor. After reciting the history of the standard and the heavy presumption that the named inventor is the inventor, the Court concluded:

 
the case law is unequivocal that an inventor's testimony respecting the facts surrounding a claim of derivation or priority of invention cannot, standing alone, rise to the level of clear and convincing proof. Throughout the history of the determination of patent rights, oral testimony by an alleged inventor asserting priority over a patentee's rights is regarded with skepticism, and as a result, such inventor testimony must be supported by some type of corroborating evidence . . . It is sufficient to note at this point that without some type of corroborating evidence, an alleged inventor's testimony cannot satisfy the "clear and convincing" standard.

 Id. at 1194 (citations omitted). While the Court did not specifically address the clear and convincing standard in the context of a declaration of inventorship under § 256, the meaning of clear and convincing elaborated is nonetheless fully applicable to this case. In Price as well as the case at bar an alleged inventor is challenging the named inventor as not being the actual inventor of a patented device. The corroboration requirement thus serves two important purposes. First, it acts as a practicable method for maintaining the distinction between the clear and convincing and the preponderance of the evidence standards; second, it ensures that evidence other than the alleged inventor's necessarily self-interested testimony will be proffered before the inventorship and ownership rights of an individual who has been issued a patent are altered or eliminated altogether.

 Moushegian has consistently maintained throughout this litigation that he is an inventor of the '132 patent. See Dep. P. Moushegian's, Jan. 28, 1993; Aff. R. Moushegian, para. 6. However, his sworn statement is insufficient by itself to survive this motion. Furthermore, he has submitted no notes, drawings or letters to bolster his oral testimony. Nevertheless, sufficient corroboration to withstand this motion exists -- namely Sim Kar's statement in the Pretrial Order that Moushegian is an inventor of the '132 patent. While, as will be discussed below, the Court will not judicially estop Sim Kar from making a contrary assertion, this statement is still evidence that the Court at this point and the trier of fact eventually may rely upon.


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