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Blue Gentian, LLC v. Tristar Products, Inc.

United States District Court, D. New Jersey

January 30, 2018


          THOMAS R. CURTIN GEORGE C. JONES GRAHAM CURTIN, P.A. Counsel for Plaintiffs Blue Gentian, LLC and National Express, Inc.

          EDWARD F. MCHALE BRIAN M. TAILLON KENNETH W. COHEN ANDREW D. LOCKTON MCHALE & SLAVIN, P.A. Appearing pro hac vice on behalf of Plaintiffs Blue Gentian, LLC and National Express, Inc.


          NOEL L. HILLMAN, U.S.D.J.

         This is a patent-infringement action relating to an expandable hose product. Plaintiffs allege Blue Gentian, LCC is the owner of U.S. Patent No. 8, 757, 213, which is a continuation of several other patents. Additionally, Plaintiffs allege Blue Gentian, LLC is the owner of U.S. Design Patent D722, 681, which is a continuation in part of an earlier design patent. Plaintiffs assert claims of direct infringement of these patents pursuant to 35 U.S.C. § 271(a) and indirect infringement of these patents pursuant to 35 U.S.C. § 271(b) and (c). Defendants contest these claims and assert counterclaims of noninfringement and invalidity against Plaintiffs.

         Defendants now move under Federal Rule of Civil Procedure 42(b)[2] for a Separate Hearing on Correction of Inventorship pursuant to 35 U.S.C. § 256. In particular, Defendants ask this Court to schedule a one-day evidentiary hearing on the issue of inventorship to resolve whether Gary Ragner should be named as an inventor on the patents-in-suit. Currently, only Michael Berardi is named as an inventor.

         Plaintiffs argue Defendants do not have standing to make such a motion, that the motion is too delayed and is barred by equitable estoppel, and that the claim of an error in inventorship is meritless. The Court finds Defendants do have standing, that the motion is not fatally delayed and equitable estoppel does not apply, and that any arguments relating to the merits of Ragner being added as an inventor must be reserved for an evidentiary hearing. Accordingly, the Court grants Defendants' motion and will conduct an evidentiary hearing on inventorship.

         35 U.S.C. § 256 provides:

(a) Correction. 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, the Director may, on application of all the parties and assignees, with proof of the facts and such other requirements as may be imposed, issue a certificate correcting such error.
(b) Patent valid if error corrected. The error of omitting inventors or naming persons who are not inventors shall not invalidate the patent in which such error occurred if it can be corrected as provided in this section. The court before which such matter is called in question may order correction of the patent on notice and hearing of all parties concerned and the Director shall issue a certificate accordingly.

         The Court first addresses whether Defendants have standing to bring this motion. Plaintiffs argue Defendants do not have an ownership interest and will not acquire an ownership interest, and thus cannot bring a § 256 claim for lack of standing. Plaintiffs argue there is no precedent for the proposition that a licensee has a sufficient financial interest to confer standing.[3]

         “[Section 256] provides a cause of action to interested parties to have the inventorship of a patent changed to reflect the true inventors of the subject matter claimed in the patent.” Fina Oil & Chem. Co. v. Ewen, 123 F.3d 1466, 1471 (Fed. Cir. 1997). “[A]n expectation of ownership of a patent is not a prerequisite for a putative inventor to possess standing to sue to correct inventorship under § 256.” Chou v. Univ. of Chi., 254 F.3d 1347, 1358 (Fed. Cir. 2001). “The statute imposes no requirement of potential ownership in the patent on those seeking to invoke it.” Id.

         “The validity of a patent requires that the inventors be correctly named.” Id. at 1359. “It follows that parties with an economic stake in a patent's validity are entitled to be heard on Inventorship issues . . . .” Id. Accordingly, the Federal Circuit “interpret[s] § 256 broadly, ” both for the benefit of inventors and for “the public interest of assuring correct Inventorship designations on patents.” Id. at 1358. The Court will interpret § 256 similarly.

         The question before the Court is then whether Defendants have an economic stake in the patents sufficient to confer standing. The Court finds Chou, 254 F.3d 1347 and Larson v. Correct Craft, Inc., 569 F.3d 1319 (Fed. Cir. 2009) instructive. In Chou, the Federal Circuit found the district court erred in concluding that Chou did not have standing to sue for correction of inventorship. 254 F.3d at 1353. Chou had sued for correction of inventorship under 35 U.S.C. § 256, seeking to be named as a sole inventor or co-inventor. Id. at 1354. The district court found Chou lacked standing “because she could claim no ownership of the patents, having surrendered all her rights to the University under an employment agreement.” Id. The Federal Circuit considered the issue of “whether a putative inventor who is obligated to assign her invention to another is entitled to sue for correction of Inventorship under § 256.” Id. at 1358.

         The Federal Circuit found “Chou has alleged a concrete financial interest in the patent, albeit an interest less than ownership.” Id. The University was required to provide a percentage of royalties from licensing activities, among other things. Id. The Federal Circuit found “[i]f Chou has indeed been deprived of an interest in proceeds from licensing the invention and in stock ownership by the ...

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