Madey v. Duke University
| Decision Date | 03 October 2002 |
| Docket Number | No. 01-1567.,01-1567. |
| Parties | John M.J. MADEY, Plaintiff-Appellant, v. DUKE UNIVERSITY, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Federal Circuit |
Randall M. Roden, Tharrington Smith, L.L.P., of Raleigh, North Carolina, argued for plaintiff-appellant. Of counsel on the brief was James L. Lester, MacCord Mason PLLC, of Greensboro, North Carolina.
John A. Bauer, Fulbright & Jaworski LLP, of New York, New York, argued for defendant-appellee. Of counsel on the brief were John M. Simpson, John E. Lynch, and Caroline M. Mew, of Fulbright & Jaworski LLP, of Washington, DC. Also of counsel on the brief was Jeffrey L. Wilson, of Durham, North Carolina.
Before BRYSON, GAJARSA, and LINN, Circuit Judges.
Dr. John M.J. Madey ("Madey") appeals from a judgment of the United States District Court for the Middle District of North Carolina. Madey sued Duke University ("Duke"), bringing claims of patent infringement and various other federal and state law claims. Pursuant to a motion filed by Duke under Federal Rule of Civil Procedure ("FRCP") 12(b)(1), the district court dismissed-in-part certain patent infringement claims and dismissed certain other claims. Madey v. Duke Univ., No. 1:97CV1170, slip op. at 12-14, 38-40 (M.D.N.C. Dec. 1, 1999) ("Dismissal Opinion"). After discovery, the district court granted summary judgment in favor of Duke on the remaining claims. For a first set of alleged infringing acts, it held that the experimental use defense applied to Duke's use of Madey's patented laser technology. For a second set of alleged infringing acts, it held that Duke was not the infringing party because a third-party owned and controlled the allegedly infringing laser equipment. Madey v. Duke Univ., No. 1:97CV1170, slip op. at 12-15, 18, 20 (M.D.N.C. June 15, 2001) ("Summary Judgment Opinion"). The district court erred in its partial dismissal, erred in applying the experimental use defense, but, for the second set of alleged infringing acts, correctly determined that Duke did not infringe because it did not own or control the equipment. Accordingly, we reverse-in-part, affirm-in-part, and remand.
In the mid-1980s Madey was a tenured research professor at Stanford University. At Stanford, he had an innovative laser research program, which was highly regarded in the scientific community. An opportunity arose for Madey to consider leaving Stanford and take a tenured position at Duke. Duke recruited Madey, and in 1988 he left Stanford for a position in Duke's physics department. In 1989 Madey moved his free electron laser ("FEL") research lab from Stanford to Duke. The FEL lab contained substantial equipment, requiring Duke to build an addition to its physics building to house the lab. In addition, during his time at Stanford, Madey had obtained sole ownership of two patents practiced by some of the equipment in the FEL lab.
At Duke, Madey served for almost a decade as director of the FEL lab. During that time the lab continued to achieve success in both research funding and scientific breakthroughs. However, a dispute arose between Madey and Duke. Duke contends that, despite his scientific prowess, Madey ineffectively managed the lab. Madey contends that Duke sought to use the lab's equipment for research areas outside the allocated scope of certain government funding, and that when he objected, Duke sought to remove him as lab director. Duke eventually did remove Madey as director of the lab in 1997. The removal is not at issue in this appeal, however, it is the genesis of this unique patent infringement case. As a result of the removal, Madey resigned from Duke in 1998. Duke, however, continued to operate some of the equipment in the lab. Madey then sued Duke for patent infringement of his two patents, and brought a variety of other claims.
One of Madey's patents, U.S. Patent No. 4,641,103 ("the '103 patent"), covers a "Microwave Electron Gun" used in connection with free electron lasers. The other patent, U.S. Patent No. 5,130,994 ("the '994 patent"), is titled "Free-Electron Laser Oscillator For Simultaneous Narrow Spectral Resolution And Fast Time Resolution Spectroscopy." The details of these two patents are not material to the issues on appeal. Their use in the lab, however, as embodied in certain equipment, is central to this appeal.
The equipment at the Duke FEL lab that practices the subject matter disclosed and claimed in the patents is set forth in the list below, which first lists the equipment and then the patent(s) it embodies.
• An infrared FEL called the "Mark III FEL," embodying the '994 patent and the '103 patent (by incorporating the microwave electron gun in the infrared FEL).
• A "Storage Ring FEL," embodying the same patents as the Mark III FEL because it incorporates a Mark III FEL.
• A "Microwave Gun Test Stand," embodying the '103 patent (by incorporating the microwave electron gun).
The three alleged infringing devices are the Mark III FEL, the Storage Ring FEL, and the Microwave Gun Test Stand. Although it is not clear from the record, perhaps because Duke defended by asserting experimental use and government license defenses, Duke seems to concede that the alleged infringing devices and methods read on the claims of the patents. Although the three devices were housed in Duke's physics facilities, the Microwave Gun Test Stand was not Duke's asset, but rather belonged to North Carolina Central University ("NCCU").
Madey and Duke built the Microwave Gun Test Stand as a subcontractor to NCCU after the government awarded NCCU a contract to study microwave guns (the "AFOSR Contract"). Professor Jones of NCCU was the principal investigator under this government project. The Microwave Gun Test Stand was built and housed in the Duke FEL lab. The AFOSR Contract listed the Microwave Gun Test Stand as NCCU's asset.
Duke moved to dismiss the infringement claims under the '103 patent under both FRCP 12(b)(1) for lack of subject matter jurisdiction, and under FRCP 12(b)(6) for failure to state a claim upon which relief can be granted. Dismissal Opinion at 9 n. 2. The district court granted the first motion in part, but denied the second motion. Madey alleges on appeal that the district court erred in its FRCP 12(b)(1) partial dismissal.
Motion to Dismiss under FRCP 12(b)(1)
The district court reasoned that Duke's alleged unauthorized use of the '103 patent fell into two categories: (i) use in furtherance of an Office of Naval Research ("ONR") grant; and (ii) use that exceeds the authorized scope of the ONR grant. The district court determined that if all the unauthorized use fell in the first category jurisdiction would lie in the Court of Federal Claims. On the other hand, if all of the unauthorized use fell in the second category, jurisdiction would lie in federal district court. In all probability, however, the use spanned both categories.
To make the determination as to whether dismissal under FRCP 12(b)(1) was proper, the district court relied on 28 U.S.C. § 1498(a), set forth below.
(a) Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner's remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture....
For the purposes of this section, the use or manufacture of an invention described in and covered by a patent of the United States by a contractor, a subcontractor, or any person, firm, or corporation for the Government and with the authorization or consent of the Government, shall be construed as use or manufacture for the United States....
28 U.S.C. § 1498(a) (2000) (emphasis added).
The district court reasoned that under § 1498(a) Madey must sue in the Court of Federal Claims for any use in furtherance of the ONR grant. Dismissal Opinion at 10-11. This reasoning assumes that the ONR grant provides the "authorization or consent" of the government to be sued, and designates Duke's use as "by or for" the United States. The district court did not, however, discuss or analyze the particular statements or aspects of the ONR grant that provided the government's authorization or consent to be sued. Nor did the court discuss or characterize Duke's use or manufacture as "by or for the United States."
The district court acknowledged that the use at issue was potentially mixed between the two categories, within the scope of the ONR grant, and without. The district court applied Fourth Circuit law, under which the burden of proving subject matter jurisdiction is with the plaintiff. Id. at 11 (quoting Richmond, Fredericksburg & Potomac R.R. Co. v. United States,, 945 F.2d 765, 768 (4th Cir.1991)). Thus, even at the pleading stage, according to the district court, the nonmoving party must set forth evidence of specific "jurisdictional" facts to show that a genuine issue of material fact exists; the moving party prevails only if the material jurisdictional facts are not in dispute. Id. (citing Trentacosta v. Frontier Pac. Aircraft Indus., 813 F.2d 1553, 1558 (9th Cir.1987)).
The district court rejected Duke's contention that even if only some use is for the government, the claim should be dismissed. The court noted that the extent of Duke's "use of the '103 patent for private purposes is unclear." Id. at 13. The court acknowledged that discovery would be necessary to determine the nature and extent of Duke's private use. However, for Duke's use of the patents "under the authority of the government research grant," the district court dismissed Madey's claim without prejudice.1
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