990 F.2d 1237 (Fed. Cir. 1993), 92-1097, Beech Aircraft Corp. v. EDO Corp.

Docket Nº:92-1097, 92-1098, 92-1108 and 92-1109.
Citation:990 F.2d 1237
Party Name:26 U.S.P.Q.2d 1572 BEECH AIRCRAFT CORPORATION and Paul J. Jonas, Plaintiffs/Cross-Appellants, v. EDO CORPORATION, Defendant/Appellant, and Douglas B. Comer, Acting Commissioner of Patents and Trademarks, [1] Defendant.
Case Date:April 22, 1993
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit
 
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Page 1237

990 F.2d 1237 (Fed. Cir. 1993)

26 U.S.P.Q.2d 1572

BEECH AIRCRAFT CORPORATION and Paul J. Jonas,

Plaintiffs/Cross-Appellants,

v.

EDO CORPORATION, Defendant/Appellant,

and

Douglas B. Comer, Acting Commissioner of Patents and

Trademarks, 1 Defendant.

Nos. 92-1097, 92-1098, 92-1108 and 92-1109.

United States Court of Appeals, Federal Circuit

April 22, 1993

Rehearing Denied May 19, 1993.

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[Copyrighted Material Omitted]

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Marvin D. Genzer, EDO Corp., College Point, NY, argued, for defendant/appellant. With him on the brief was Richard D. Greene, Morris, Laing, Evans, Brock & Kennedy, Chtd., Wichita, KS.

Paul B. Swartz, Martin, Pringle, Oliver, Wallace & Swartz, Wichita, KS, argued, for plaintiffs/cross appellants. With him on the brief were Jeff Kennedy and Kathryn Gardner.

Before RICH, ARCHER, and LOURIE, Circuit Judges.

RICH, Circuit Judge.

EDO Corporation (EDO) appeals and Beech Aircraft Corporation (BEECH) and Paul J. Jonas cross-appeal the November 1, 1991 decision of the U.S. District Court for the District of Kansas in this consolidated suit, Beech Aircraft Corp. v. EDO Corp., 777 F.Supp. 884 (D.Kan.1991), on cross-motions for partial summary judgment. The district court issued its decision as two Judgments together with a consolidated Memorandum and Order. One Judgment is directed to a suit that BEECH/Jonas 2 originally filed in the U.S. District Court for the District of Columbia and later had transferred to Kansas (SUIT-1), and the other Judgment is directed to a suit that BEECH/Jonas filed in Kansas (SUIT-2). The Kansas court consolidated these two suits after SUIT-1 was transferred from the D.C. court.

BEECH/Jonas appeal that part of the district court's decision denying their motion that EDO be ordered by summary judgment to assign to BEECH the following: (1) U.S. Patent No. 4,782,864 (ABILDSKOV-1); (2) the pending divisional application of the application which led to the ABILDSKOV-1 patent (ABILDSKOV-2); and (3) all other property or information in EDO's possession that is the property of BEECH pursuant to the decision rendered in EDO Corp. v. Beech Aircraft Corp., 715 F.Supp. 990 (D.Kan.1988), aff'd, 911 F.2d 1447 (10th Cir.1990), a "previous litigation" between EDO and BEECH. Although EDO logically does not appeal the district court's refusal to order the requested assignment by summary judgment, EDO does appeal the district court's holding that BEECH is not precluded by res judicata, the compulsory counterclaim rule, or the applicable statute of limitations from asserting this assignment claim in the present suit.

EDO also appeals that part of the district court's decision vacating an interference decision rendered by the Board of Patent Appeals and Interferences (Board) of the U.S. Patent and Trademark Office (PTO) 3 on February 27, 1990. In that interference decision, the Board awarded priority to Abildskov for the common subject matter claimed in the ABILDSKOV-2 application, assigned to EDO, and U.S. Patent No. 4,671,470 (JONAS patent), assigned to BEECH.

Finally, EDO appeals the district court's holding that all of the remaining summary judgment motions are moot. EDO argues that the remaining motions ripened for review once the district court denied the cross-motions for partial summary judgment filed by EDO and BEECH/Jonas on the assignment claim.

In accordance with our comments below, we affirm the district court's denial of the motion for partial summary judgment filed by BEECH/Jonas on the assignment claim, on the alternative ground that BEECH is precluded by Rule 13(a) of the Federal Rules of Civil Procedure from asserting this claim in this suit. Accordingly, we also reverse the district court's denial of EDO's corresponding motion on the assignment issue and remand this case to the district court with instructions to grant EDO's motion based upon our Rule 13(a) holding. In addition, we reverse the district court's vacatur of the Board's interference decision and instruct the district

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court to consider the remaining motions for summary judgment.

I. BACKGROUND

To understand the particular issues before this court, a review of how this case has come before us is needed.

  1. Contractual Relationship Between BEECH and EDO 4

    The present controversy stems from a series of four research and development contracts which BEECH, the "Contractor," entered into with EDO 5 beginning in September of 1982. The contracts provided that EDO would design, develop, and construct a wing structure for the Starship, a new composite aircraft. Each of the contracts contained a section entitled "Title to Intellectual Property" which stated in pertinent part:

    Any inventions, whether patentable or not, any trade secrets, and any technical information or data developed pursuant to the underlying research and/or manufacturing and tooling funded by the Contractor will be and will remain the exclusive property of the Contractor and will not be disclosed or made available at any time to any third part[y] without the written consent of the Contractor in advance.

    The parties agree, however, that any invention, trade secret, or other technical information or data which is proprietary to Subcontractor prior to the signing of this subcontract and previous subcontracts with BEECH shall remain the property of the Subcontractor. 6

    In the previous litigation between the parties, the district court interpreted this section of the contracts as providing that all "patent and inventive rights" arising from the contracts would become the property of BEECH, exempting any documented procedures, designs, processes, and concepts which were unique to EDO and which were developed prior to the contracts. The first of the four contracts also required EDO to indicate in a final report to BEECH any such exempted procedures, designs, processes, or concepts, whereas the second, third, and fourth contracts did not contain such a provision.

    In April of 1983, EDO presented BEECH with a design study report for the Starship main wing, which included a proposal that an "H" section be employed to attach spars to the wing skins. EDO did not indicate in that report that the "H" section concept was exempt from the contractual provisions bestowing upon BEECH "patent and inventive" rights to all concepts and designs developed pursuant to the contracts. BEECH accepted EDO's design for the Starship main wing, and, in late 1983, EDO geared up for production of the wing. Work proceeded until March 20, 1984, at which time BEECH notified EDO that it was terminating their contracts.

  2. Patents and Patent Application In Issue

    On December 31, 1984, Abildskov, an EDO employee, filed the ABILDSKOV-1 patent application in the PTO designating EDO as assignee. The ABILDSKOV-1 patent issued on November 8, 1988. Both claims of the ABILDSKOV-1 patent are

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    directed to a fabric joint for providing three-dimensional, structural support to intersecting structural members. The ABILDSKOV-1 patent describes these fabric joints as being useful in connecting a spar or rib to another structural component, such as the skin or covering of an aircraft wing.

    On July 15, 1985, Paul J. Jonas, a BEECH employee, filed the application which the PTO ultimately issued as the JONAS patent on January 9, 1987. Jonas designated BEECH as assignee. The JONAS patent contains six claims directed to a method of joining aircraft sandwich skin panels to longitudinally extending frame elements and four claims directed to joints between sandwich skin panels of aircraft components and elongated structural frame elements.

    On November 16, 1987, prior to issuance of the ABILDSKOV-1 patent, Abildskov filed the ABILDSKOV-2 divisional application. Abildskov filed an amendment in the ABILDSKOV-2 application on March 24, 1988, to provoke an interference with the JONAS patent. In this amendment, Abildskov added claims 23 and 24, which copied claims 7 and 10/7 7 of the JONAS patent, respectively. In response, the PTO declared an interference on March 8, 1989, in which: (1) Count 1 corresponded to claim 7 of the JONAS patent and claim 23 of the ABILDSKOV-2 application; and (2) Count 2 corresponded to claim 10/7 of the JONAS patent and claim 24 of the ABILDSKOV-2 application. 8 Jonas later moved the Board to add to the interference claims 9 and 13 of the ABILDSKOV-2 application as corresponding to Count 1, and claims 15 and 18-20 of the ABILDSKOV-2 application as corresponding to Count 2. The Board granted Jonas' motion, which went unopposed by Abildskov. 9

    On January 23, 1990, the Board issued to Jonas an order in the interference to show cause within twenty days as to why judgment should not be entered against him for failure to take testimony. Rather than filing a timely response to this show cause order, Jonas filed a petition with the PTO on February 21, 1990 requesting that the interference be stayed. Because Jonas failed to file a timely response to the show cause order, the Board decided priority of invention as to Counts 1 and 2 and rendered judgment in favor of Abildskov on February 27, 1990, pursuant to 37 C.F.R. § 1.652.

  3. "Previous Litigation"

    On April 1, 1985, EDO had filed suit in the U.S. District Court for the District of Kansas against BEECH, alleging, among other things, that BEECH had misappropriated trade secrets by BEECH's use of and procurement of a patent for the "H" section technology. EDO further requested a declaratory judgment that EDO owned the "H" section technology. Prior to the filing of its amended answer, BEECH became aware of the ABILDSKOV-1 application in taking the deposition of a former EDO employee, Mr. Graham. Nonetheless, BEECH did not file a compulsory counterclaim seeking assignment of this...

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