Ddb Technologies v. Mlb Advanced Media, L.P., 2007-1211.

Citation517 F.3d 1284
Decision Date13 February 2008
Docket NumberNo. 2007-1211.,2007-1211.
PartiesDDB TECHNOLOGIES, L.L.C., Plaintiff-Appellant, v. MLB ADVANCED MEDIA, L.P., Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Michael D. Gannon, McDonnell Boehnen Hulbert & Berghoff LLP, of Chicago, IL, argued for plaintiff-appellant. With him on the brief were Michael H. Baniak, and Christina L. Brown.

Sharon R. Barner, Foley & Lardner LLP, of Chicago, IL, argued for defendant-appellee. With her on the brief were Jonathan R. Spivey and Michael R. Houston. Of counsel on the brief was Anat Hakim, of Washington, DC.

Before NEWMAN, Circuit Judge, CLEVENGER, Senior Circuit Judge, and DYK, Circuit Judge.

Opinion for the court filed by Circuit Judge DYK. Opinion dissenting in part and concurring in part filed by Circuit Judge NEWMAN.

DYK, Circuit Judge.

Appellant DDB Technologies, L.L.C. ("DDB") appeals from a decision of the United States District Court for the Western District of Texas. The district court dismissed DDB's patent infringement suit against MLB Advanced Media, L.P. ("MLBAM") for lack of subject matter jurisdiction. We hold that the district court correctly held that DDB's asserted statute of limitations and equitable defenses were not available and that no jury trial was required on the issue of standing. However, we hold that the district court erred in denying DDB's request for jurisdictional discovery. Therefore we affirm in part and vacate in part the judgment of the district court, and we remand for limited jurisdictional discovery and for further consideration of the district court's jurisdiction based on that discovery.

BACKGROUND
I

Plaintiff-Appellant DDB is a company formed by Dr. David Barstow and his brother Daniel Barstow. The two Barstow brothers were the named inventors of the patents in suit. Those patents include three "Computer Simulation Patents," U.S. Patent Nos. 5,526,479 ("'479 patent"), 5,671,347 ("'347 patent"), and 6,204,862 ("'862 patent"), all relating to a method for generating a computer simulation of a live event for display on a viewer's computer, and one "Pattern-Matching Patent," U.S. Patent No. 5,189,630 ("'630 patent"), relating to a method allowing a viewer to search for certain information about a live event. In 1998, the Barstow brothers assigned these patents to DDB, which they had formed to commercialize and further develop their inventions.

The ultimate question here is whether the interest of Dr. David Barstow ("Barstow") in these patents was previously assigned to his former employer, Schlumberger Technology Corporation ("Schlumberger").1 Barstow, a computer scientist, worked for Schlumberger from 1980 until 1994. At the start of his employment, Barstow entered into an employment agreement that included the following relevant provisions:

3. Employee shall promptly furnish to Company a complete record of any and all technological ideas, inventions and improvements, whether patentable or not, which he, solely or jointly, may conceive, make or first disclose during the period of his employment with [Schlumberger].

4. Employee agrees to and does hereby grant and assign to Company or its nominee his entire right, title and interest in and to ideas, inventions and improvements coming within the scope of Paragraph 3:

a) which relate in any way to the business or activities of [Schlumberger], or

b) which are suggested by or result from any task or work of Employee for [Schlumberger], or

c) which relate in any way to the business or activities of Affiliates of [Schlumberger],

together with any and all domestic and foreign patent rights in such ideas, inventions and improvements. Employee agrees to execute specific assignments and do anything else properly requested by [Schlumberger], at any time during or after employment with [Schlumberger], to secure such rights.

J.A. at 470-71 (emphasis added).

During his employment with Schlumberger, Barstow worked on several projects related to the development of computer software used to control and record data measured by physical sensors used in logging oil wells, and on other software development projects. Barstow also worked on several personal projects during that time period, including collaborating with his brother Daniel on a method for broadcasting data about a live event, such as a baseball game, and producing a simulation of that event to be viewed on a computer. This project eventually led to the applications for the four patents in suit, two of which were filed and one of which was issued during Barstow's employment with Schlumberger.

While employed at Schlumberger, Barstow discussed this project with Charles Huston, Schlumberger's general counsel for software matters, and Dr. Reid Smith, the director of the lab in which Barstow worked. Both Huston and Smith testified that they knew Barstow was working on a "baseball simulator" project, J.A. at 153, that they had discussed the project with Barstow and also between themselves, and that they did not believe at the time that the project belonged to Schlumberger. Huston stated, "Dave came to Re[i]d and myself and said this is what I'm doing. If there is any problem with this let me know and Re[i]d and I discussed it and we don't see how it applies to Schlumberger's business." J.A. at 154. Smith testified that Barstow's project was "general knowledge" at Schlumberger, that he had never "suggest[ed] to Dr. Barstow that the personal work he was doing belonged to Schlumberger," and that he was not "aware of anyone at Schlumberger ever stating a belief that Dr. Barstow's personal work belonged to Schlumberger." J.A. at 165-66. However, the extent of Huston and Smith's knowledge of the project is unclear from the record.

The only written communication from Barstow produced at the hearing was an email sent from Barstow to Smith requesting permission to "include a short biography of [Barstow] in the biographical section" on a product resulting from a "project of [his] brother's ... involv[ing] a scheme for recording symbolic descriptions of baseball games ... and providing software for home computers that would do things like simulation and search." J.A. at 965. Barstow also advised Smith that "some patents may issue this year, in both of our names," and promised to "let [Smith] know if it actually happens." Id. Smith forwarded the e-mail to Huston, who wrote back, "I see no problem with Dave having his biography included if he is a coauthor of the work." Id. Although Huston testified that he did not think Barstow "concealed details of his personal project," J.A. at 153, he also admitted that he did not recall any documentation about the project, other than the e-mail, being provided. Similarly, Smith stated that he did not know what other documentation about the project Barstow had provided to others at Schlumberger.

II

In 2004, DDB filed this patent infringement action against MLBAM, alleging that MLBAM provides several Internet services related to baseball that infringe the Computer Simulation Patents and the Pattern-Matching Patent. More than a year later, immediately before the close of discovery, MLBAM entered into negotiations with Schlumberger to acquire any interest that Schlumberger had in the patents in suit. Several months later, on April 7, 2006, Schlumberger and MLBAM entered into an agreement that assigned to MLBAM all of Schlumberger's rights and interest in the patents in suit and granted MLBAM a retroactive license to practice under those patents.

On May 1, 2006, MLBAM moved the district court to dismiss the action for lack of subject matter jurisdiction, based on DDB's failure to join all owners of the patents in suit (including MLBAM) and on DDB's inability to pursue an infringement claim against MLBAM by virtue of its newly acquired ownership interest in those patents. DDB subsequently filed a motion to extend the briefing schedule and to obtain limited expedited discovery and depositions on the issues raised by MLBAM's motion to dismiss. MLBAM indicated that it would agree to a thirty-day extension for "reasonable discovery," J.A. at 892, although it now disputes the extent of the discovery it was willing to provide. Nonetheless, the district court denied DDB's discovery motion, and scheduled a hearing on the motion to dismiss for June 8, 2006. The court held a telephonic conference to determine whether the parties would be allowed to present witness testimony at the hearing, and ultimately decided to allow each party thirty minutes and to use part of its thirty-minute argument time to present witness testimony. At the hearing, DDB used its time to present the testimony by Huston and Smith described above. MLBAM presented testimony by Dale Gaudier, Schlumberger's general patent counsel, about the nature of Schlumberger's business at the time Barstow worked for the company.

On September 26, 2006, the district court granted MLBAM's motion to dismiss. The court found that the patents in suit fell within the scope of Barstow's employment agreement because they were both "suggested by" and "related to" his work for Schlumberger. In determining that the patents in suit were "suggested by" Barstow's work, the district court relied particularly on their relation to two prior patents issued to Schlumberger that named Barstow as the inventor. During the prosecution of three of the four patents in suit, one of these patents was listed by the patent examiners as prior art (although not cited by the applicant as prior art). In determining that the patents in suit were "related to" Barstow's work, the court relied in part on a 1992 letter from Barstow to his brother Daniel which the district court interpreted as an admission by Barstow of such a relation. Because the language of the employment agreement provided for an automatic assignment of Barstow's rights, the court rejected DDB's statute of limitations, waiver, estoppel, and laches defenses. The court also held that the...

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